Recently, I watched at least 10 videos on YouTube, The topic is about telling you how he/she makes $xxxx dollars in 7 days or 30 days. It’s really exciting, huh?
The business model discussed in the video is dropshipping. It’s easy to understand and also seems actionable for everyone, but there are many mistakes you should avoid.
If you know some products that are trending and if you also have suppliers who can provide and deliver these goods to your customers at a lower cost, then you can open a store on Shopify, creating some attractive Facebook ad angles. Your paid advertisements will make some users buy products from your Shopify Store.
If you are lucky and win a jackpot, you might also have your own story of making a thousand dollars within 3 days, etc.
Is this real, unbelievable? I have no interest and no time to research the dark side of the story. What’s the purpose of these overnight-rich stories? Is it clickbait, or just a lure enticing you to pay for their training courses?
If you decide to do a drop-shipping business, I believe you must already know its advantages: no substantial investment, no inventory management, and no need for a physical storefront or warehouse, etc. to name a few.
Too perfect! But do you know its disadvantages? If you don’t know it clearly, here are some: lower profit compared to self-fulfillment; Quality is out of hand; Competition is higher, and logistics are more complex.
In the post, I want to talk about the mistakes or hidden risks you should avoid before diving into dropshipping business.
Business Mindset
What was your mindset when you decided to start a drop-shipping business? Making quick money, getting rich overnight, or taking it as a serious business.
I have a friend told me his story months ago. He said, “I already quit from Shopify. , I paid $500 for a Shopify training course.” They told me you can make money on Shopify if you read and learn the courses. But the reality is a sad story. I did not make any money, and I tested many products. My money went from my pocket to Facebook ads, which converted poorly. I lost $2000 already. These course trainers are liars. They just want you to buy their courses. Wtf!”
The courses can’t guarantee that you will make money; it’s your plan and strategies that decide.
Plan and Schedule
What’s your plan and strategies to do a drop-shipping business? No matter what things you do, you should have a plan, have concrete strategies if things are big, and have a deadline for each small task.
Production Selection
Picking the right products for your online store is not an easy thing. You still do not know which products to promote. You may even read long lists of trending products posted here and there. No one knows which products are trending now and also have huge profits.
I sold products on eBay several years ago. When I don’t know the winning products, I sell them as auction-type items, starting at $1 or at my cost price. At the end of the auction, if there are bidders over 3 to 5 , it means this product has potential and good profit margin.
There are many factors impacting the behaviors of purchasers. As a consumer, I will check the price, features, quality, shipping time, customer service, etc. What will you check when buying something as a consumer?
When it comes to product selection, two principles should be followed.
Simplicity. You can’t handle customers’ questions if the products you are selling have complex features you are not familiar with and you have no knowledge of them.
Standard. Standard means industrialized products. Don’t try to sell items that have no standard, like customized ones, handmade products or crafts.
Supplier Relationship
If the suppliers of your products are not reliable, your business will fall apart. Many of us doing dropshipping businesses find niche ideas or trending products on Aliexpress. There is a big chance the store owner of Aliexpress is not the true supplier of the goods.
If you did not take it carefully. Many problems can happen at any time. You received an order, you asked the store supplier to deliver, and the supplier either delivered the wrong or broken product, or the supplier shipped your order with some cheap carriers to the wrong address. There is also a scenario that the supplier says, “Sorry, we are out of stock, we don’t produce it any more.” What should you do then?
These are the lessons you should learn. Having good suppliers is absolutely important for any dropshipping business.
Advertising
What are your strategies to promote the products in your store? How much budget do you have to invest in paid ads? If you have many products in your online store, it will cost more for you to do an a/b test if you choose paid ads.
If you are a newbie, the recommendation is do not sell too many products in different categories, keep your store delicate and professional.
If you are low on budget, SEO is also a feasible option. It costs nothing but your time and patience.
Success is for those who planned and acted. If you are prepared, there is no guarantee you will make money in a short time. Before making it, you may experience frustration, hesitation, doubt, and being on the edge of giving up, finally quitting. But once you jump over that hurdle, you will reach a new height and have a new view of business.