Yes, you read that right. Over 90% of dropshipping businesses fail during the first 30 days. There are many reasons why that happens, and most have to do with the idea that dropshipping will make people millionaires overnight. This is not true, dropshipping is not that type of business.
Another reason most dropshippers fail is that they don’t have any experience with ecommerce and most think dropshipping is about buying cheap products from China and selling them in the USA at a very expensive price. Well, that’s old news, and dropshipping is not about that anymore.
Now, if you want to learn from other people’s mistakes and avoid doing the same ones, here are 6 of the important reasons why most dropshippers fail.
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6 Reasons why dropshippers fail
If you’re thinking of starting dropshipping, then we recommend first reading about dropshipping and understanding how this business works, including why other people failed and what can you do to avoid making the same mistakes.
The following are 6 of the most important reasons dropshippers fail and why most people say dropshipping is dead or is a scam. Besides explaining why they fail, below we will try to give you some solutions on how you can do better.
1. They don’t do enough research
Research is the first thing you need to do any time you think of starting a new business. Now, most people don’t take this step too seriously, which means they set themself up for failure right from the start. If you don’t know how dropshipping works and what the process looks like, or what are the right steps when starting such a business, then you don’t actually understand if this business is for you.
As you will see once you do your research, dropshipping takes time and patience, and if you don’t have these qualities, then you do need to think about starting another type of business.
Now, when we say research we don’t refer only to the first step of starting any dropshipping store. In dropshipping, you need to do research at every step, from the start to the end. You have to do research on what type of products you can sell, where you can sell them, who is your target audience, where to find the best suppliers and so on.
So, to sum up, you need to research the following if you want to start dropshipping:
- How dropshipping works
- What are the steps to follow to start dropshipping
- What type of products work in your region
- What are the trends in your area
- All about your target audience
- What type of ecommerce platform to choose for your store
- If you should go for an independent supplier or choose a dropshipping platform
2. They choose the wrong niche
Definitely, this is one of those mistakes that can make or break your online dropshipping store. Choosing the wrong niche for your region is the most common mistake a beginner makes when starting. Why? Because they don’t take their time to study the market, what is trending in their region, what they can bring new to the area, and what is the demand, among others.
So, how can you be sure that you can choose the right niche and not make the same mistake? Well, research, research and then some more research. We know, this can be boring and take a lot of your time, but it will also give you the best chances to succeed.
For example, check what’s trending in your region (use Google Trends, Google Search, Keyword Planner, etc.), and what other online stores lack or have as bestsellers, and once you make your decision based on solid facts, then you need to test it out.
Now, it can happen that your test fails and you won’t have any orders, but that’s normal, that’s why this process is called testing. Don’t give up and test another niche or product category. We recommend when you do your research to pick more than one niche to test.
3. They choose the wrong suppliers or dropshipping platform
This is another huge mistake. Choosing the wrong suppliers or dropshipping platform is actually one of the biggest mistakes you can make. It all starts and ends with your suppliers and their products. So, if your suppliers have low-quality products, are unreliable, and have a long shipping time, then you don’t stand a chance in the ecommerce business. According to Shift4Shop, 84 percent of eCommerce retailers say their biggest obstacle is finding a good supplier.
That’s why is essential to choose a supplier (or a dropshipping platform) that will offer high-quality, premium products, ship fast and can provide a tracking number for their product so that your customers can track their order at any time. It will also be very helpful if you can reach out to them at any time.
Now, one way you can avoid making this mistake is to choose a dropshipping platform like AppScenic. On AppScenic you will work only with top-tier reliable suppliers that follow high-quality standards and can deliver products super fast. And what’s even more amazing, is that you can choose more than one supplier to partner with. So, in case your first supplier runs out of stock you always have a backup option.
4. They implement the wrong marketing strategy
In other words, their marketing and advertising strategy is not working. Or worse, they think advertising is not at all important for their business. This is a big mistake. Now, let’s say you’ve found the right products and the best suppliers, it’s all for nothing if you can’t get them in front of the right people. This is only possible if you’ve done your market research and know how to reach out to your prospects or future customers.
So, before actually building up your store and starting any dropshipping business, you absolutely need to do market research and study your audience. This will tell you how you can sell your products to them, where you can find them, and what are their interests. What works for them, what will make them click and land on your online store? There is so much competition out there, so you need to find ways to stand out. Your products and suppliers can’t do all the work, unfortunately, you need to go the extra mile, like having a user-friendly website, with lots of amazing product images, from various angles, videos that showcase that product, etc.
More than that you need to be where you’re audience is, and that’s Google (through SEO and Google Ads), Facebook, Instagram, YouTube, Pinterest, and TikTok – for all of this you need to create a Business Account and also run weekly ADs). Of course, in the beginning, if you don’t have enough resources, you should just pick two of these channels and invest in them.
Now, if you are new to advertising on Google and Facebook, you can take these free courses:
5. They don’t have enough budget and resources
In case you read that you can start a dropshipping store for free and you don’t need any budget in the beginning, well that’s not true. Of course, if you compare dropshipping with other businesses, this one doesn’t require a lot of money and resources. But you do need a minimum budget. That’s why this is another reason on our list, one that we want to make sure you keep in mind when starting a dropshipping business.
So what’s a realistic budget to start such a business? Well, if you want to set up a great online store with everything included, all the features and the tools included, and also choose a dropshipping platform and keep some budget for advertising, you would need around $1500-2500 to start with.
It may happen that you need less, as it depends on so many factors, from the type of store, niche, niche size, products, audience, and competition, among other things. But if you have this budget when you start then you can be prepared for a lot of scenarios and can also test at least 15 products, improving your chances of success.
6. They choose products with long shipping times
As we said when talking about suppliers in the first part of this article, shipping times will make a difference when starting to dropship or having an online store.
In the USA especially, with the launch of Amazon’s prime delivery system, people just don’t want to wait a long time for their orders to arrive. Why would they, when Amazon ships their items in just a single day?
According to this consumer study, 42% of customers expect a 2-day shipping option every time they order online. This changes everything, right?
Of course, dropshippers fail if they ship their products from China, as items can take 20 days or more to get to the USA.
It’s highly important to find a supplier that is close to your region and can ship as fast as possible. This can mean that customers, especially if they are in the USA, will choose you and not your competition even if you both sell the same product. Fast shipping times can actually be a selling point for your online store.
What do you think? Do you have what it takes to dropship?
Now that you read all this, we hope you understand better why there are so many people failing at dropshipping. We know, it can be overwhelming to read about so many failures, but you need to know that even though there is such a big percentage of dropshipping businesses that fail, it doesn’t mean yours won’t succeed. It just means that starting a dropshipping business is not easy and you should not rush into doing anything before doing your homework and reading all about it.
So, as long as you take your time, do the work and some more, be persistent, and don’t give up easily, then dropshipping will be worth it.
Ready to start dropshipping? Then here’s a step-by-step guide on how to start a dropshipping business.
Feeling lost trying to navigate the dropshipping world? Check out our complete dropshipping course. It’s perfect for newbies who need help setting up a shop or experienced sellers who are struggling to make sales.