99% of people fail with dropshipping because of common dropshipping mistakes, like picking an overcrowded niche or choosing the wrong product. The most common errors are an unprofessional-looking website and incorrectly priced items. Avoid these mistakes by learning the business model. Dropshipping is a low-barrier-to-entry business model, and anyone can do it, unlike starting a local lead generation business which is a learned skill set, so there's less competition.
But dropshipping isn't easy, and it's not a get-rich-quick scheme. In 2023, if you want to succeed with dropshipping, you need to test and retest a ton of products. Then be ready to fail with a bunch of them before you find the right one. Also, dropshipping is all about paid ads. But they come with a price tag. So learn to be the better marketer. And know how to grab the attention of your target market.
“A dropshipping niche means having a store catered for a type of people with the same interests” (dodropshipping)
1. Choosing The Wrong Niche
Your niche is the foundation of your dropshipping business. You need to research and determine if there's an actual market. You want medium to high sales volume. Because if there isn't a demand, you have no business.
You also need to understand customer psychology. Including the perceived value of the products you sell. The higher the perceived value, the more you can charge for your product.
People shop with their emotions. So target niches that invoke impulse buys and sell products that add value or solve a problem. Or a niche that presents an opportunity to add more items as you scale your business. We have a list of common dropshipping niches to avoid. To find a profitable dropshipping niche. Use the top three research tools, which include:
You can also use sites like TikTok Made Me Buy it or eBay's WatchCount to see what products are trending. Check out popular selling items on platforms like AliExpress and Alibaba. Go to Amazon and look up the latest reviews and ratings or check out the best sellers list.
One of the most common dropshipping mistakes is not taking enough time for market research and picking products that invoke zero emotions like a vacuum. You're looking for a niche with a passionate community. One with multiple options for vertical products. Items that you can add to your store as you scale your business. A good niche should have:
- Products with a lot of styles and variations (scalability).
- Items that are hard to find (scarcity).
- Trigger an emotional or logical reaction in your target audience (impulse purchase).
Check out the competitions' dropshipping store of your ideal customer and target market. What are they doing well? How can you do better?
2. Insufficient Product Research
Dropshipping is competitive because of its low barrier to entry. But it does require thorough research. Especially when it comes to deciding what products to sell.
You want products that can be priced with a 10X markup. Inventory with high conversions and items with a high-perceived value. (Don't make the mistake of settling for cheap products that sell for $10-$15). Find potential products using software like Ecomhunt, DropshipSpy, and CommerceInspector.
You need to become the expert. Understand how the product works and what makes it valuable. Learn about customer psychology and how to collect data. (To identify and target your audience more effectively).
Your items should be current. You want products that will go viral with high conversion potential. Look for gaps in the market, and focus on inventory that solves a problem or has a WOW factor. Consider other things like:
What To Look For When Researching Dropshipping Products:
Pro Tips: Buy test products cheap from sites like Alibaba or AliExpress. When you find products you want to sell. Connect with local wholesalers to get faster shipping times.
3. Depending Too Much On Suppliers
A lot of beginner dropshippers start with AliExpress. This isn't wrong, and it's not a mistake. It's just not the most sustainable option long term. Products from this website are typically being shipped from China. So you often face lengthy wait times and delays.
But you can use AliExpress to check shipping times. In the dropdown box, find the locations you plan to target. See how long it takes to ship products to each country you want to sell. More than two weeks? You need to find a different supplier. So you need to speak with every supplier who sells that item.
You're looking for wholesalers with:
Here's when you need to establish a good network. Get to know them. Build a relationship. Because poor relationships with your suppliers are a fast way to fail. You'll never get the best price or be able to leverage their services for deals. The key is to network. Build trusting relationships, and get a better arrangement than your competition. Here's a good place to start, best US dropshipping suppliers.
Other Tips For Finding Great Dropshipping Suppliers:
87% of dropshippers say finding a good supplier is the hardest part of getting started with dropshipping. So you need to consider aligning with several suppliers to give yourself options. Use Google search to look at images or the generic term for items you want to sell.
Determine who the product's wholesaler is and if they offer to dropship. Another suggestion is to use sites like Walmart to find suppliers. (It integrates with tools like Ecomdash for inventory automation). Or contact brands directly and offer a value proposition. But be sure to vet each supplier carefully. You're looking at things like:
Ratings & Reviews
Sufficient Orders & Low-Cost Shipping
Adequate Quantities Of Inventory
Another option is to take advantage of integration software and directories like:
Over 230 drop ship suppliers you can access for free.
Paid option called FlexPoint for $399/month where you can add your own suppliers.
$249/month and is optimized for using your own supplier(s).
An enterprise-level software where you can connect with different suppliers through multiple channels.
Can build custom integrations for updating inventory, uploading inventory, order management, tracking information, etc.
Integrates with over 100 different marketplaces, including Walmart, eBay, Shopify, and Bonanza.
4. Limited Branding & Website Optimization
Time Magazine advises that the average user spends 15 seconds on a website. But a common dropshipping mistake is setting up your store too quickly. Websites without thought to style or user experience, don't just look like a fake e-commerce store, they send off a weird vibe for potential customers. So people won't be hanging around to buy your product. No matter how low you price it, and you end up failing before you even start. Instead, you need to plan what style of the dropshipping store you want to build. You have three types to choose from:
When you know how to create the perception of a great product by maxing out on your logo, video ad and web design skills. You will create demand even while other people claim that dropshipping is saturated.
They're expansive and list a ton of hot-ticket items. Quick sales based on trends. But this makes it challenging to create a trusted brand. Because there are products from many niches and no specific target audience. The plus is that you're able to test multiple products at once.
Concentrate on an identified target market. You're selling products that interest a specific audience. This increases your chances of becoming an authority in your niche.
One Product Stores:
By listing one product, you have a definitive target market. Making you better positioned to advertise to a specific customer.
But no matter what dropshipping store you choose. To succeed, you need to establish a clear brand. Then, to develop credibility and trust, you need to engage with your target audience. Both on your website and social media platforms.
59% of Millennials will go to Amazon first when online shopping. Why? Because people trust Amazon.
Optimize your website to secure an online presence. Look at your competitors' dropshipping stores. What keywords are others in your target niche ranking for? How can you do better and make your dropshipping business unique?
Use Techniques Like:
5. Subpar Customer Service
One of the most common dropshipping mistakes is not focusing enough on the customer. Consumers are your lifeline and how you treat them is pivotal to your success.
96% of customers base their brand loyalty on customer service. So if you aren't providing the best shopping experience. Or providing superior customer service for your target market, they will go elsewhere.
If you aren't committed to high levels of customer service, refunds and chargebacks will be the least of your worries. (20% of people will seek revenge by posting a negative review based on sub-par customer service). Too many negative reviews are one of the fastest ways to get your store shut down. Not to mention the risk of Facebook bans you ad account for quality issues. So what can you do to provide your customer with stellar service? What strategies can you use to set your dropshipping store apart from your competition? A few things like:
Tips For Improving Your Customer Service:
Be transparent around shipping times. For example, offer a 'track your order' option with software like Aftership or Tracktor. To avoid buyer confusion, you also need detailed product descriptions.
Include images of your product from several angles. Sell quality inventory and secure reliable suppliers. (Wholesalers that can commit to providing fast shipping times). These techniques will help mitigate requests for refunds and returns.
When shipping products from China from suppliers you found on AliExpress the shipping times can take 4 weeks or more.
Remember many customers do not know a dropshipping store ships their product from China. They're expecting 3-5 day shipping times that they're used to from Amazon.
Unless you properly communicate this, as the shipping times exceed 2 weeks or more, customers will begin requesting chargebacks from their banks thinking that they were scammed.
As the chargebacks pile up, your payment processor can get shut down which can cause a lot of hassles.
"87.4% of consumers say real-time order tracking makes their buying experience more enjoyable." OptimoRoute
If a customer insists on a return. Determine if it's cheaper to replace and just let them keep the existing item or issue a return. But remember that you are out of pocket for the sale for every turn. (Plus any fees for shipping and restocking imposed by your wholesale provider).
Returns and refunds are part of the game with dropshipping. So make a potentially unpleasant situation a positive encounter for your customer. You not only go the extra mile. But you may have secured a life-long buyer.
To avoid unnecessary head-aches, quickly vet out suppliers that have bad ratings. If you notice a number of defective product complaints, think about replacing your supplier quickly.
6. Not Knowing Your Numbers
A common dropshipping mistake is thinking you can start without money. But what business do you know that requires zero investment? It's unrealistic. If you only have $100-$200 to spend, you won't get far.
To be successful with dropshipping, you need to plan on a minimum budget of $3000-$5000. You will spend most of this on Facebook advertising dollars to test different ads. You also need to know every price and how much it will cost to make a profit. Understand the difference between revenue and profit. (Dropshipping stores can bring in millions and revenue and not make a profit. So your revenue needs to cover the cost of all your expenses).
Answer These Questions:
The average drop shipper earns between $1000-$5000+/month. But some make over $100,000/year. Profit margins typically fall between 20%-30%. But it depends on the product you sell. Your suppliers and how well you build your brand.
No matter how much you're making you should be tracking your profits daily. You need to know your real sales numbers. Use a dropshipping profit-tracking app like Lifetimely and BeProfit. Tools that integrate ad costs, fees, product, and shipping costs.
Tracking your dropshipping profits is critical if you want to identify your growth. So you know when it's time to scale.
7. Neglecting Organic Growth Opportunities
Organic growth takes time. So if you want to get your trending product in front of your audience faster. You're going to need to use paid advertising. Target your ideal customer and start making money. Facebook ads are the most common form of online advertising for drop shippers. But you need to pay attention to a couple of things like:
Facebook Ads Spend:
Pro Tips: If your goal is sales, don't use a Facebook ads funnel. They're a waste of time and are filled with low-quality customers (window shoppers). So, you'll get a ton of engagement but not many sales.
Be willing to test other platforms, not just Facebook. Get on Tik Tok or Instagram. Invest the time to research what works best for your dropshipping business.
"33% of clicks from organic search results go to the first listing on Google." ImpactPlus
An even more cost-effective way to grow your online presence is with organic traffic. This method takes effort and strategy. But, if you're willing to invest the time. You can drive people armed with buyer intent using a few techniques like:
Leverage Social Media Platforms:
Post content relevant to the product that offers value for your target audience. Build engagement and create credibility with live streams, product videos, contests, or giveaways. Be active on platforms that are the most popular and frequented by your ideal customers. Check out your competitors' page for ideas and inspiration.
Utilize Email & SMS Marketing:
Create an email list and share value with your customers. (Like discounts or limited-time offers). Platforms like Drip are an excellent way to launch email marketing campaigns. Communication that will give you valuable information about what your customer wants. They can also increase engagement, meet objections head-on, and secure sales from abandoned carts.
Use SEO Techniques:
Include keywords in your product descriptions, add a blog, etc. (make sure your store is user-friendly and optimized for SEO). Tools like Google Analytics or SEMrush to analyze performance. Or outsource your ranking strategy to a professional.
Organic traffic is a budget-friendly alternative to paid advertising. One that allows you to connect with your customers and scale your business.
8. Lack Of Demand Planning
Demand planning is part of your research and can be the difference between a smooth fulfillment process and supply chain disruptions. Check out seasonal trends. Or high-demand times for your product with tools like Google Trends or SpyFu.
You need to understand your inventory usage and when to plan inventory purchases. Be sure to analyze situations that affect demand (seasonality, campaigns, sales, etc.) so you can advise your fulfillment service. This will help avoid shipping delays or insufficient stock.
Demand planning offers additional benefits like:
Pro Tips: Demand planning can increase your profitability and customer satisfaction.
Don't wait to take advantage of upsurges in product demand, or you could miss out on potential sales.
9. Poor Pricing
Your pricing is crucial to the success of your dropshipping business. 81% of consumers conduct online research before making a purchase. This includes product descriptions, reviews, and price comparisons. The goal is to maximize your profit margins and cover all your expenses.
So, you need to price your products correctly. Too high and people will go to the competition. But price too low and people will think your item is of poor quality. To decide how best to price your inventory, research things like:
How To Determine Pricing For Dropshipping Products:
Use tools like DSM Tool or ShipRocket to determine competitor pricing. But don't focus too much on undercutting their price. The worst dropshipping mistake is competing on price. This is a quick race to the bottom and a fast way to fail. You want to offer fair market prices. But you can modify your offer to make it more compelling by including things like:
- Free shipping
- Discounts or limited time offers
- Quantity breaks
Tap into customer psychology with your pricing strategy. (For example: $1.99 instead of $2). Be willing to test different methods.
Pro Tips: Even $1 makes a massive difference in your overall profit margins when you scale.
10. Unreasonable Expectations
Don't expect to make a ton of cash when first starting out. Success isn't going to happen overnight. This is when you need to focus on learning and understanding the fundamentals of dropshipping which involve learning a lot of marketing tactics & psychology. You should plan on investing at least 1-2 months to learn the business model and research/test multiple products.
Dedicate a budget of $1000-$3000 to testing products. Find one that meets your criteria. Practice your skills and study the fundamentals of drophipping, perhaps invest one of the best dropshipping course.
Test and apply what you're learning with things like:
You've seen the YouTube videos. Successful drop shippers sharing how they made $5K in a week or even a day. But what many beginners fail to consider is:
- How much time did they invest in building their store?
- How long did they spend on niche and product research?
- What was the number of products they tested before finding a winner?
- How much money did they spend on paid ads?
Dropshipping takes dedication, commitment, and product validation. Don't cut corners or skip out on the little things like creating a great logo and a beautifully designed Shopify store. You need to be all in and willing to hustle. A few other common drop shipping mistakes beginners make include:
You need to take action. Put the time and energy into your business from the beginning, and it will pay you dividends in the future.
Be willing to test multiple products. It's about taking the first step and getting out of your comfort zone. You can't level up or grow your business if you're not prepared to take some risks.
Position yourself for success and avoid these common dropshipping mistakes. Be prepared to invest the time, energy, and capital. Learn the model and be willing to take risks, and you can build a profitable drop shipping business.
But if you want to own an online business that gets 85%-90% profit margins as opposed to the 10%-30% with dropshipping. Then you should consider local lead gen. Not only is there less competition. But once you understand the process, you can scale fast to create passive income.
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