Ecommerce has been breaking down the barriers of traditional commerce for entrepreneurs. With the dropshipping business model of ecommerce, the opportunities and possibilities come in at a low startup cost as compared to the brick-and-mortar model, giving pretty much anyone with an idea and the drive to realize their goals the chance to build a professional business online, with a lot less hassle.
A dropshipping business allows people to sell products online without inventory. With dropshipping, all you need is your computer and an ecommerce website. As a seller, you will be marketing and selling products on your online store that come from a third party supplier or manufacturer of goods. You’ll never have to see or handle the products that you sell and your customers will never have to know that you are dropshipping.
The cool thing about ecommerce and dropshipping comes down to a few significant points that trump traditional commerce. A few factors that make dropshipping awesome is the worldwide reach, having a business that runs 24/7, and not having to invest in the purchase of goods for inventory.
Ecommerce and dropshipping have been giving people access to greater business opportunities around the world. However, it can take some time to get things right, especially if you are new to the dropshipping business where you are sure to make a few mistakes along the way.
Maybe you are already thinking of starting your own dropshipping business or perhaps you are already running one. If you are, then this article is for you. Here you will find a list of common dropshipping newbie mistakes that you need to avoid. Keep reading to find out if you are committing any of these dropshipping errors.
Expecting Easy Money
This is the first mistake that you should avoid, the idea that you will be running a shop that will generate a five-figure income overnight. Dropshipping is not a get rich quickly and easily scheme, no matter what you have heard from all the dropshipping gurus out there. It takes work, and the first mistake most entrepreneurs make when they are first getting into it is believing that it’s as easy as building a store on Shopify in 2 hours and launching a shop that’s all set and ready to make thousands of bucks per week.
Dropshipping does provide easy access and convenience to starting a business, but running it takes dedication and perseverance because there are many online stores out there that you need to compete with. This means that to run your store well, you need to do your research and to develop an approach that will get you ahead of the competition.
No Marketing Scheme
Now that we have removed the idea that running a successful dropshipping business is as simple as taking your store live, we need to discuss the kind of work you have to put into making your store successful, which will come down to your marketing scheme.
You will need to work on your store persistently before your store can start working for you. You are going to have to market your tail off. If you’re not marketing your online dropshipping business, how on earth do you think people are going to find out about your store?
Many people mistakenly believe that marketing is simply all about advertising. While advertising is indeed a part of marketing, marketing encompasses many aspects of your business. Marketing includes all aspects of your dropshipping business, including product development, distribution, sales, and advertising.
The best way for your dropshipping store to become profitable is to have a great marketing plan in place already. You need to do all the things mentioned below and more because dropshipping is competitive and your competition is also working to market their brand.
There are free channels for you to market your online store that you can use to your benefit. Let’s discuss three:1. Social Media
No matter what type of niche or category your dropshipping business is in, building an online following on social media should be one of your long term business goals. Having an organic social media following is one of the ways for you to get the word out about your business and lead traffic towards your website!
Try to post daily or at least consistently several times a week on the most popular forms of social media, or wherever your target audience likes to hang out and share content. So build a few social media pages, get on Instagram, Pinterest, build a Facebook business page, get on Reddit, and wherever else your business needs to be.2. Content Marketing
Work on content Marketing. Content marketing not only helps you create more engagement with your consumers, but it’s also a great way for you to establish yourself as an authority and as an expert source on the topics that matter the most to your consumers. Because of this, blogging is highly suggested in promoting your ecommerce website.
Try to provide value to the people who are interested in your niche, by providing them with helpful and information-rich content. For instance, if you are running a dropshipping website selling athleisure clothing that is inspired by contemporary hip-hop artists and rappers, you could also run blog posts dedicated to this music culture scene, so that the people who are interested in this topic can also benefit from your content. You could even share content from other sources that you think your target consumers might enjoy.
3. Email Marketing
Another method related to content marketing that is being touted for upping the chances of success through customer acquisition and retention is the email marketing campaign. Ideally, your online store should have a method in place for capturing your customers’ emails. Sending your clients newsletters two to three times per week that offer them valuable content, like your latest blog post, special offers, news, and the like, is a method for you to interact with your consumer and get them to come back to your site.
The trick to marketing through social media, your blog, and through your email marketing scheme is to be consistent and to always provide value to your consumers. Remember that what your consumers care about is the value that you can provide them with.
It is also very important to interact with your consumers. When you are up and running on all the relevant social media platforms and posting on your blog, make sure to reply to all comments and answer all questions. This will help you get sales by addressing your potential costumers’ concerns as well as making them feel special through your responsive customer service.
Lack of Quality Control
Because you will be outsourcing products directly from the manufacturer or supplier, the products you are marketing go directly from them to your customer without it ever having to go through your hands. Many dropshipping gurus and blogs will tell you that this is a part of the many upsides to dropshipping, and it is! However, it does pose a major problem.
The great convenience of not having to handle inventory means that you might be sacrificing the quality of your products by not inspecting what you are selling first. This is bad because if you are unwittingly shelling out low-quality merchandise, you will get negative reviews and lose customers.
When you get into dropshipping, you have to select a dropshipping supplier who can provide you with high-quality products at a cheap price. Ideally, the dropshipping suppliers you choose should already have a long-running track record of providing excellent service, and one that has amassed great feedback.
Test orders are also extremely important for dropshippers to be able to control the quality of the products they’ll be selling. After all, in your marketing scheme, you will probably be describing your products as being high-quality. To fulfill the promises you make in your marketing messages, you need to verify this yourself.
To do this, you need to order the products and have them shipped to yourself. This is a great opportunity for you to observe how your supplier operates, how long it takes them to process the order and to experience the shipping time duration.
Once you have had the first-hand experience of ordering items that you are making available on your store directly from your suppliers, you will have a good idea of what kind of service your customers are receiving, from the delivery process to the actual performance of the products.
Low Profit Margin
While dropshipping is known and praised by many as being a highly lucrative business model, many entrepreneurs might find themselves struggling with low-profit margins. Here is why:
Because your supplier is responsible for a number of logistics and many of the operations, from storing the products, packaging, and shipping, they do charge a fee. Most wholesalers add $2 to $5 per item plus any other additional dropshipping fee.
For many online sellers, this burns a hole through their ideal profit margin, and they could find themselves with less than 20% net income after they subtract fees and other expenses.
What you need to do here is to pay attention to the numbers when it comes to running your business.
One of the more obvious solutions here is to mark-up your prices so that you can enjoy a higher profit. You don’t want to increase your prices too much because you still want to keep things competitive.
Another solution is to focus on selling your items at the same price, but aiming for a higher volume of sales. Think about it, if you are selling an item at $20 with a profit of $13 per sale, it’s not worth running a store if you are only getting a few dozen orders a month.
You can also attempt to talk your supplier into coming up with a better deal. A good deal would mean getting a small percentage off of their fees, which will help you make a difference in your profit margin. Before you talk to your suppliers, you should have already, at least ideally, worked with them for a bit of time and given them a good amount of profitable business.
Not Paying Mind to the Competition
You’ve heard it said before: Dropshipping is easy. Because it’s easy, anyone can do it, and because anyone can do it, there is a ton of competition out there. So beware. Chances are, someone is already out there with the same store concept, selling the same products at competitive prices.
In order not to find yourself barely making a splash in the turbulent waters of the competition, you have to focus some of your efforts in researching the competition.
You have to know your competitors, who they are, what they do on social media, what products they sell, what kind of blogs they posts, what they do differently, what they do better than you, etc. To be better than your competition, you have to watch them.
This way, you will be able to compile some research based on the strategies that your competitors employ to analyze their strengths and weaknesses. It is important for you to judge your competitors objectively as if you were considering your own products and business.
Becoming familiar with the strategies of your competitors will help you build a strategy that can hold itself up against theirs. So visit their websites, their social media pages, read their blogs, and read their product reviews. Observe what they do right, and when it comes to the things that they are doing wrong, well, you’ll just have to do it better than they can.
Back to You
So, there you have it. We’ve given you five of the major dropshipping mistakes to avoid when you are first starting out on your dropshipping business. What do you think are the most common mistakes you’ve seen or experienced in dropshipping?
At Ecommerce Pro, we love hearing about your ideas and sharing practical solutions to common dropshipping problems. If you need a hand in building your ecommerce business with the best ecommerce practices, Ecommerce Pro can help. Feel free to start a conversation with us today.