What are the biggest challenges in dropshipping?
In this article we’ll go through some of the most common challenges in dropshipping, so keep on reading to find out everything you need to know before you launch your online business.
The advent of the internet has provided multiple opportunities for doing business. Among them, the drop shipping is considered to be one of the most interesting ones. This business technique is adapted by a large number of eCommerce owners and creates an industry worth around $162.44 billions (2019 statistics). The astonishing number of sales of dropshipping stores are often directly associated with the growing number of online shoppers. Nonetheless, every business is not a piece of cake.
If you are already a retailers or an online seller, then you have a lot to gain from drop-shipping. The market is increasing at a rate of 25% annually.
In order to maintain an inventory stock, eCommerce platforms have to invest a hefty amount in managing a warehouse space. On the other hand, if you choose the dropshipping model, you won’t have any of the costs related to inventory management, storage costs, and other additional overhead costs.
The best thing is that won’t even have to buy your products beforehand, as in dropshipping model, you only purchase the items after you make a sale. You might be wondering then, what are the downsides of this type of business?
Challenges in Dropshipping
Like any other business model, there are challenges in dropshipping that you need to overcome, and some mistakes that you need to avoid.
In the following paragraphs, we made a list of some of the most common challenges that most dropshippers face at some point.
1. Building Your Own Brand While Selling Third-Party Products
Many dropshippers are fine with launching one-product stores or limited-time stores, which they happily close down as soon as the trend is over. However, nowadays Social Media advertising is becoming every day more expensive, and this is why one can no longer afford to lose clients and start from scratch every single time. One of the secret of building a successful dropshipping business is investing in the creation of your very private label, in other words: your very own brand.
But how can you create your brand when you never come into contact with the products you sell?
This is exactly why this is one of the challenges in dropshipping. First at all, because the creation of custom made products can be extremely costly and difficult, especially if you relate to Chinese suppliers and you have limited resources to invest. The solution can be, at least in the beginning of your dropshipping career, to customise your products packaging.
This type of private labelling is not expensive and can be arranged with even very small MOQs, and once you are ready you can even think to move on to apply your very own logo on your products. However in order to get this arranged, you need to face the next dropshipping challenge.
2. Finding A Reliable Supplier
Another challenge that you will find in the drop-shipping business is finding a reliable supplier. One could say that finding a good one is like searching for a needle in a haystack.
Most beginner dropshippers tend to look at AliExpress, when trying to find their products. AliExpress is not an optimal long-term choice, as it is a B2C platform with several resellers who often do not offer after-sale assistance or fast shipping.
Nowadays, thanks to the increasing awareness and lucrative business performance of dropshipping, we have seen a consistent rise of private dropshipping suppliers. But again, not all of them will match your quality standard or finances.
The whole process is based on only three entities which are customers, store and suppliers.
As dropshipper, you and your chosen supplier are responsible for delivering the product to the customer. But what if your collaboration with the supplier is not adequate?
Your business will directly suffer. Therefore, it is sufficient to found the complying supplier.
If you want a supplier who can source high-quality products at B2B prices and offer affordable fast shipping, your answer is Yakkyofy.
Yakkyofy can source for you over 12 million different products and fast ship them in many countries around the world. This supplier also offers a software that can help you automate the entire order fulfillment process, which means that your orders will be fulfilled as soon as you receive them!
Yakkyofy also offer a series of additional services, such as:
- Shopify, WooCommerce and eBay integration;
- Free multi-store management dashboard;
- Private labelling of products and packaging;
- Dedicated customer assistance service;
- Free Warehouse space;
- Bulk Shipping to custom locations, or to Amazon FBA.
Some take the choice of a supplier as a secondary matter, but don’t be tricked, as choosing the right partner is extremely important, you need someone who will be able to assist your business, especially when your order numbers increase as you start to scale your market.
3. Build Customer Trust with High-Quality Products
Have you ever heard the saying: sell the right thing in the right place to the right audience?
If you nailed the previous challenge in dropshipping, then this one should be a piece of cake. As long as you have high-quality products, then you can rest assured your clients will be happy, and most likely are going to come back buying more products from your store!
Bonus tip: display your ads and product in an engaging manner, make sure you add high quality images and videos that show your goodies in the best light possible!
4. Handling Shipping And Processing Time
Unless you shipped your products in bulk to Amazon FBA, you probably won’t be able to get them delivered the next day. Here’s one of the biggest challenges in dropshipping.
Handing shipping and processing times well!
The secret here is to be honest with your customers, do not lie on your shipping times and make sure you write in the shipping section the real times of your parcels. Your clients will appreciate your honesty and your complaints and returns will be kept to a minimum.
Bonus tip: provide excellent customer service and keep updating your customers on the shipment status. This will help you build their trust in your business.
5. Dealing With Customer Returns
When a third-party is involved, it can make things a little bit complicated.
Dropshipping returns policies depend greatly on the suppliers, and the majority of them do not offer return services. This is especially true for AliExpress resellers, first at all because many of them disappear as soon as they close the sale, and second because shipping back a parcel to China can be quite expensive.
Make sure you get in touch with your chosen supplier to understand exactly how they operate the service.
Also make sure you include a policy on returns on your dropshipping store, so that you will be able to keep your customers complaints to a minimum, because if you get too many complaints or bad reviews, you could get your ad account banned and payments frozen.
6. Coping with ban on Facebook, Shopify, and PayPal
If you decide to launch your dropshipping store, Facebook, Shopify and PayPal are probably going to be your best friends. As a consistent number of dropshipping entrepreneurs choose these tools for their business.
The bad news is that if you do not follow their regulations and if you don’t keep your clients happy, you could get a ban on your accounts.
So what can you do if you get banned? Well, to be fair, prevention is better than cure.
- So make sure you follow the guidelines provided strictly. This will help reduce the probability of getting blocked.
- Provide real information on your products and do not mislead your clients.
- Make sure you don’t over promote your products, because some times too many promotions could result in a ban.
7. Going Out Of Stock
This is one of the challenges in dropshipping that you can experience in particular busy periods of the year, especially during Christmas and Chinese New Year. Often there are also the periods when you sell the most, that’s why ideally you’d want to prepare yourself beforehand and get a stock of your best selling items. You don’t have to buy thousands of them, but you want to have enough so that you can still get your orders fulfilled without a glitch.
Unfortunately however, not all suppliers however provide this kind of service, and those who agree to keep your products in their warehouse might charge a handling fee.
Don’t worry, because once again, Yakkyofy has got your back! We will not only provide your products at B2B prices but also keep them for free in our warehouse, ready to be shipped as soon as orders arrive from your store!
Challenges in Dropshipping: The Bottom Line
Running a dropshipping store can be very profitable. In this article we mentioned some of its challenges but, again, there is no business in the world without challenges! So keep up your positive attitude, because just as every lock has a key, every challenge has a solution. All you need is the right partner to assist you and to be dedicated to your success.
We hope you learnt a lesson from these challenges in dropshipping, so that you can kick them out of your way in achieving your dreams.
So are you ready to start your business now? Great, then the first thing you need to do is:
Biofraphy of the Author
Liza Brooke is a Senior Research Analyst & Tech Blogger at Dissertation Assistance. A platform from where you can avail, coursework writing service UK. She is fond of reading articles and keeps herself updated with the latest technological trends.