How to Avoid Dropshipping Business Pitfalls

Adopting the dropshipping business model has a lot of benefits to it, very significant one of which is the potential of online stores to expand their catalogue without taking on a lot of inventory risk.

As with all businesses, dropshipping also comes with its own setbacks and could also take time to get the hang of and so mistakes are sure to happen along the way. While some of these mistakes are less risky and could be easily overlooked, others, however, could degrade a store’s reputation for good.

Below are a few common, yet important-to-note pitfalls which often happen and how to avoid them;

#1 Dropshipping Trademark/Copyrighted Items

This mistake should be a no-brainer for retailers; however, this still happens to be a temptation most would fall for. Dropshipping is not a get-rich-quick scheme so selling items with a registered trademark or registered copyrights of another company without a license to sell is definitely the start of an epic fail.

The best practice for dropshipping is to always sell white-label items to avoid the legal hassles that come with having trademarked/copyrighted items up for sale on a store. Another way to go would be to get a license to sell these trademarked goods, and this could cost from a few hundred dollars to tens of hundreds of dollars depending on their owners.

#2 Out of Stock Items/Order Changes and Cancellation

What could be worse than having an item listed as ‘in stock’ while in reality, the supplier has actually run out? It gets even trickier when customers click the wrong button and order an item by mistake or change their minds later. For a case of an order change or cancellation, an excellent customer service letting them know their request for the change or cancellation that would be made always comes in handy. However, since the dropshipping model puts so much dependency on suppliers, it is important to be up-to-date on how much is left in their inventory.

With automated inventory management software like the EMERGE App which is designed primarily for dropshippers to automate customer management, purchase orders amongst other features.

#3 Overrated Shipping Times and Differing Shipping Fees

Shipping times are a pain, especially when dealing with suppliers from China. Suppliers too are never accurate with dates and so would instead give a long estimate which could always be influenced by things such as holidays and also the method of shipment. One of the most popular methods of shipping items from China is ePacket, majorly due to its economic value. Other methods include China Air Mail or FedEx.

Irrespective of whatever means of shipment is being offered on a store, it is important to clearly indicate when customers should expect their packages to be delivered without setting too optimistic shipping timelines to impress. Another means of getting around this would be to offer free shipping by adjusting the prices of items to factor in shipping costs.

#4 Return Complications.

Things can get out of hand very quickly when complications arise in the process of making returns. While shipping and return policies are an integral part of a store’s website, it could get boring having to research and come up with one which suits a store. So, most store owners fall for the temptation of publishing vague and generic policies which may not be legally sound and are not applicable to various cases concerning a store.

To avoid this, store owners and suppliers should be able to come to an agreement about how returns are made; a well-researched policy should be made available on the store’s website and having an organised, automated system for this will save both customer and store owner a lot of confusion and irritation.

#5 Expecting to Get Rich Quick.

Unlike the myths that come with the ideology of dropshipping, dropshipping requires a lot of investments in the form of time, effort, money and plenty of learning to make sustainable profit.

Dropshipping provides a level of convenience and can be profitable. However; many dropshippers set themselves up for failure by starting out with very unrealistic expectations.

Avoiding this mistake seems to be tricky in itself and depends a lot on having a balanced, holistic approach to the dropshipping model. Setting unrealistic expectations, no doubt, is not the way to go, also having expectations too down below comes with its own setbacks, one of which is a lack of zeal to reach more potential, another being caught off-guard when success comes knocking. In the end, one can only hope for the best but prepare for the worst.

Dropshipping comes with its own set of pitfalls, a few of which have been mentioned above, needless to say, this list is in no way extensive. However, it is important to be cautious of these few as they might hinder customer experience which is one of the most critical factors of a successful dropshipping business. A piece of advice would be to automate as much as possible with trusted software while focusing mainly on customer acquisition.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.