By Nermeen Nabil Khear 
Dropshipping is an increasingly popular way to do e-commerce. Like any business strategy, it has its pros and cons.
In this article, we’ll focus mainly on the cons — the pitfalls you risk falling into when starting or growing your dropshipping store. We’ll tell you everything you need to know about why dropshipping fails and what you can do to avoid it.
What Is Dropshipping
If you’re reading this, you might be dipping your toes into the wonderful sales method of e-commerce.
So what exactly is e-commerce, and what does “dropshipping” mean?
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E-commerce businesses operate online stores where customers browse products through an app or webpage and have their orders delivered straight to their door. E-commerce business owners can operate their own online stores and/or sell through online marketplaces like Amazon, eBay, Etsy, etc.
Dropshipping is a fulfillment method for e-commerce businesses. Instead of buying inventory, storing it, fulfilling orders, and managing deliveries themselves, dropshipping businesses can fill customer orders through a supplier. The supplier will handle product procurement, packaging, shipping, and delivery.
Dropshipping lets e-commerce business owners save money on stock, storage, and fulfillment. It involves less risk, as business owners aren’t left with unsold inventory or huge shipping overheads.
Now, you might be asking yourself why dropshipping fails. It sounds risk-free! Well, not quite.
Key Pitfalls and How to Overcome Them
Let’s look at some common dropshipping pitfalls and how you can avert them.
Choosing the wrong supplier
It’s tempting to look for the cheapest supplier when you’re setting up your dropshipping business. After all, it seems logical — profit margins will be higher. What else do you need?
This is great in theory, but in practice, choosing a supplier should be a much more involved process.
A supplier might offer competitive prices, but that can come at the cost of quality and reliability.
How to overcome this dropshipping pitfall? Here are a few tips to help you choose a good supplier:
- Get personal recommendations: ask other e-commerce business owners which suppliers they recommend.
- Do a web search: lots of dropshipping experts have written helpful articles recommending the best suppliers.
- Listen to trusted experts in your industry: look for reviews and testimonials from successful online business owners in your niche.
- Read online reviews: if you’ve found a few potential dropshipping suppliers, read reviews for each of them to help narrow them down.
- Look locally first: local suppliers will have shorter shipping times and might be easier to communicate with than overseas ones.
- Look for low or no minimum order quantity: low or no MOQ is vital for those slow initial sales if you’re just starting out.
- Look for suppliers whose businesses align with your own: software integrations or professional enterprise architecture services can indicate a quality supplier.
- Reach out: once you’ve narrowed down your shortlist, contact the suppliers. This is a good way to get a feel for them and ask them questions.
- Make sure they have your essentials: look for suppliers with good return policies, excellent customer service, reasonable prices, reliable tracking management, and any other essential features you require.
- Order samples: ask your supplier for samples of your intended dropshipping products so you can assess the quality yourself.
Picking the wrong niche
The modern e-commerce market is saturated. Implementing the right eCommerce pricing strategies isn’t enough to succeed. Finding a profitable niche that works for you and appeals to customers is also vital to dropshipping success.
A niche is your specialty. You don’t sell “art supplies”; you sell “durable nylon brushes” and “cotton watercolor paper”. Art supplies might get you lost in a sea of other e-commerce stores. A niche will help you stand out to the people who want what you sell.
A niche is important for reaching your target audience, building a customer base, developing customer loyalty, and creating targeted and personalized marketing.
So, how to overcome? There are a few ways to find your dropshipping business niche:
Research successful e-commerce businesses
Find out who’s selling well, what they’re selling, who they’re selling to, and how you might do better.
Research market trends
You can follow market trends by:
- Looking at what’s trending in web search engines: For example, Google Trends will tell you the top searches by location and within a specific timeframe.
- Looking at social media trends: most social media platforms have their own trending feature for popular tags and searches.
- Looking at online marketplaces: sites like Amazon and eBay will highlight their best-selling and most searched-for products.
- Look for gaps in the market: understanding market trends can help you identify gaps in the market that your store could fill.
- Think about your passions: knowledge is power, and expertise is experience. Focus on what you know and how you might offer dropshipping products you’re excited about. This can help you become an authority in your niche, as well as develop marketing that connects with audiences on a deeper level.
- Conduct product profitability analysis: make sure your niche can turn a profit.
Not understanding your audience
Many intrepid new business owners are passionate about their products, creative in their ideas, and eager to start selling.
In all the excitement of starting a dropshipping business, it can be easy to forget the main part of the e-commerce equation: your customers. To be more precise, you should find your target audience and give them what they want.
Not understanding your audience can lead to out-of-touch pricing models, products marketed to the wrong audience, products that nobody wants, marketing that doesn’t appeal to even your potential customers, and brand messaging that causes negative sentiment.
You’ll be made fun of on the internet at best. At worst, you risk e-commerce failure. So, how to overcome this dropshipping pitfall?
Audience research is essential to developing a successful dropshipping business. Here’s how to do it:
Research your existing customers if you have them
If you’re already up and running, your existing customers offer plenty of demographic and behavioral data.
Research social media audiences
Look at your competitors’ social media channels and find out who they’re interacting with to find your potential customer base.
Research your competitors
Aside from social media, you can also look up your competitors on review websites like Trustpilot or Yelp. Find out what they’re doing that customers love and identify areas you can do better.
Customer surveys
For your existing customers, send out emails asking them to fill out surveys. If you don’t have customers yet, ask for respondents on social media or web forums where your audience hangs out.
Focus groups
Advertise focus groups on social media or web forums. You can even host a focus group with people you know personally or people from your local community.
Not investing in marketing
You might have built the sleekest dropshipping website on the market, but that’s no good if nobody knows about it. How to do?
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There are marketing options for every kind of dropshipping business, from small startups to larger enterprises.
- Social media: social media has a low barrier to entry and can be successful on any budget.
- Email: email marketing is versatile and reaches customers who have already signed up for communication. You can send informational newsletters, new product releases, personalized discounts, or upcoming sales.
- Blog posts: you can create your own blog to post about your brand or be a guest poster on someone else’s blog.
- Paid ads: there are plenty of paid ad options, from cost-effective pay-per-click ads to display ads on websites and marketplaces.
Consistently selling low-quality products
There are two reasons why dropshipping store owners fall afoul of low-quality products. The first is that they’re tempted to go with the cheapest products and suppliers, and the second is that they simply have bad luck. You might get a few bad apples or end up with a whole bushel of shoddy merchandise.
Consistently selling low-quality products will have a lasting negative impact on customer satisfaction scores (What is CSAT?) and your reputation.
To solve this problem, you should keep a lookout for:
- High volumes of returns on certain products
- Negative reviews on certain products or your store in general
- High volumes of customer support tickets about certain products
These issues can help you narrow down which products are the problem or discover if it’s a wider issue with your supplier. You can either cut the problem products or switch suppliers.
Bad delivery management
As a dropshipping company, you have less control over shipping and delivery. This can be a positive thing as you don’t need to deal with logistics. But it can also cause problems since delivery is out of your hands.
Modern customers have high delivery expectations. Research by global shipping company DHL backed this up. In their 2024 Online Shopper Trends report, almost half of all respondents wanted quicker delivery for their online orders.
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It isn’t just about being fast, either — it’s about giving customers all the information, including tracking information, delivery slot choices, better estimates, and the assurance that they’ll be compensated should things go wrong. This gives customers more control over their online shopping.
So how to overcome this pitfall? Your supplier controls delivery, so you can avoid this pitfall by:
- Working with a reliable supplier
- Communicating with your supplier
- Always getting up-to-date tracking information and ensuring it’s passed on to your customers
- Focusing on what you can control: the customer-facing part. Be open and honest with your customers. Don’t mislead them about delivery times you quite literally cannot deliver on. And if there’s a delay, inform them and own up to any mistakes. Most customers appreciate that kind of honesty.
- Dropping suppliers that consistently fail to provide tracking information and accurate shipping estimates
- Looking for suppliers that integrate well with your own systems with tools like inventory management and AI for logistics.
Not offering a consistent customer experience
E-commerce stores are under more pressure than ever to provide a consistent experience across all of their customer-facing channels.
Consistency increases customer satisfaction and trust. You can probably vouch for this yourself. If you recognize a brand, trust its reputation, and have a positive experience to back that up, why would you switch to an untested competitor?
A lack of consistency can hurt your dropshipping store’s reputation and customer retention. How to overcome this dropshipping pitfall
You can take an omnichannel approach to the customer experience. This means providing a seamless customer experience across your store, social media, and customer support on all apps, web browsers, and devices.
This involves:
- Plotting your customer journey
- Identifying all the touchpoints where customers interact with your brand — marketing channels, brand messaging, social media, email, contact centers, browsing your store, checking out, etc.
- Assessing how you interact with customers at these touchpoints
- Looking for touchpoints where interaction is lacking or disjointed and filling those gaps
If you’re a smaller dropshipping store or you’re just starting out, this might sound overwhelming. But don’t worry! You don’t need to expend tons of resources to provide some level of seamless experience.
- Ensure your e-commerce store looks good and functions well on all browsers, apps, and devices.
- Keep your brand messaging, tone, and aesthetic consistent across all channels for maximum familiarity.
- Monitor your customer experience by measuring customer satisfaction data.
- Personalize your customer support across the channels you offer it. This can be as simple as remembering your customer’s name and issues when switching from direct messages to email support.
- Look into reasonably priced omnichannel software that caters to small businesses.
- If your store uses online marketplaces, utilize their optimization and communications services.
Final Thought
Ultimately, many dropshipping business owners underestimate how difficult dropshipping actually is. Success depends on:
- Proper planning
- Market research
- Audience research
- Finding a good supplier
- Good delivery management
- Appealing marketing
- Providing a positive customer experience
Dropshipping can be a lucrative business for those willing to check all the boxes. Understanding why dropshipping fails and taking steps to mitigate the issues will set you up for dropshipping success.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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