3 Biggest Problems Starting a Dropshipping Business and How to Avoid Them

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There are problems to pretty much everything in life, and dropshipping is no exception. While it can be a real  blessing for anyone wanting to start an online boutique with no money, drop shipping does indeed come with its own problems.

So in today’s article, we are going to talk about some of the biggest potential problems you may encounter when using dropshipping for your online boutique or store, and most importantly how to avoid them as much as possible.

1. Low Profit Margins

One of the problems with drop shipping is the low profit margins. Because most dropshippers sell directly to the public, some of these dropshippers are usually not true wholesalers. Instead, they typically buy from wholesalers and resell at prices that are slightly above wholesale and even close to retail prices in some circumstances. As such this could affect your profit margins to an extent. For example a dropshipper could be selling a product a dress at near retail price of $15 per product, whereas if you bought that product wholesale, it probably would only cost  around $8 per product. This means you have to sell the product at an even higher price to make a profit. Because of this, you may not see very good profit margins.

To avoid this drop shipping problem, it’s important to research the products you plan to sell carefully, and make sure they are in high demand and not being sold by every retailer out there. Otherwise you will end up running a business that is constantly competing with others on price. I mean during my years of coaching, I’ve worked with so many boutiques selling similar products and competing against one another on price. Don’t try to be like every boutique, try to be unique, and bring something new to the market. In doing so, you can charge an even higher prices regardless of whether you are dropshipping or buying wholesale.So make sure you’re using the company with the lowest prices and best quality, however don’t worry so much about price that you overlook other important features.




2. Inventory Problems

Another problem with drop shipping is inventory problems.Unless your dropshipper is one of the few that offer true integration with your shopping cart software, there will  probably be times when a customer orders a product that the dropshipper no longer has in stock. In this case, you’ll either have to recommend an alternative product to the customer or refund the cost of the item back to the customer. This will probably upset the customer, and they won’t be likely to order from you again.

This is one problem with dropshipping that can be hard to eliminate. However if you can find a dropshipper that has an inventory control system or software that can integrate with your website shopping cart, then this could avoid most inventory issues. Problem however is, most drop shipping suppliers simply do not have this function to accommodate every website or ecommerce platform. For example; platforms such as Oberlo (a dropshipping supplier directory) integrates nicely with the ecommerce platform Shopify but will not work with other ecommerce platforms such a Woocommerce, and others.

Another way to avoid these inventory problems is to find a few alternative suppliers who sell similar products. That way if a product is sold out with one vendor, you can simply buy from the other vendor.

 

3. Shipping Problems

Another problem with drop shipping is shipping problems. Because you’ll be counting on the dropshipper to handle shipping, there will probably be times when mistakes are made. Perhaps an item won’t arrive by the time it was promised, or it might be the wrong item, the wrong color, the wrong size, or it might arrive damaged. In any event, your customer will probably be upset, and you’ll practically be at the dropshipper’s mercy with regards to the return process.

The best way to combat this drop shipping problem is to select a dropshipper with a fair return policy, and make sure all customer returns will be handled promptly. Always find out about the dropshippers return policy in advance before you even begin doing business with them. Also, be sure to have your own policy in place to avoid upset customers, and be clear on your shipping times upfront.

For example with my only store Fashvie, I have a functionality set up for all my dropshipping items. When customers go to place the order, it tells them immediately that it is a Pre-order item and how long this will take.  

In doing so customers know before prior to even adding items to their cart that it will take that length of time for them to receive their products.

And better still to avoid shipping problems, order some samples from these dropshipping vendors for yourself to test their processes, see how long shipping takes, test the quality of the products, that way you are more confident of their shipping and return process. 

At the end of the day your drop shipping business success is down to using dropshipping the right way for your business.

Want to learn more about Dropshippping the right Way? THEN CLICK HERE TO LEARN MORE

Looking for an All in One Dropshipping Platform? Why not visit Dropship Finds for a great way to get started.

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