Dropshipping has quickly become one of the most popular e-commerce business models available. The potential for success is huge, but, any time you start a business, it's important to do your research. It's especially important to study what makes dropshipping businesses succeed and what makes them fail.
Interested in how to build a dropshipping site or how to get a dropship site built for you in less than 3 days? Be sure to check out our completely FREE webinar on how to build a successful dropship business! (Spoiler alert: In the webinar, we walk you through our secret dropship model that destroys AliExpress dropshipping in 2020!)
Drop shipping as an e-commerce business is considered a low-risk business because it requires very little investment to start. Dropshippers usually spend more money on advertising once the system is all set up.
So why do dropshipping businesses fail? Let's get into it so, at the end of this article, you'll know how to create a successful dropshipping business!
Reasons Why Dropshipping Businesses Fail
DropshipUSA has years of experience building drop shipping websites so we've watched a lot of dropshippers get their start. That puts us in a unique position to observe successes and failures. We've watched dropshippers implement different strategies and have been able to collect a lot of data about what works and what doesn't. So, let's get into our list of of reasons why dropshipping fails.
Choosing The Wrong Niche
Finding the right niche is often overlooked when setting up a dropshipping business. Focusing on a niche you think is right and focusing on the right niche are entirely different things. If you're feeling confused about what makes a good or bad niche, you can get a FREE niche guide when you attend our free dropshipping webinar! It walks you through what kinds of things to consider when choosing your niche.
Choosing a bad niche can definitely affect your business success. With the dropship business model we use at DropshipUSA, we set up your business so you can easily add or remove products at any time. This way, you're able to experiment with different niches!
Impatience & Lack Of Persistence
If you want fast returns then dropshipping isn’t for you. This isn't an instant gratification business. It takes a little patience and persistence to build a successful dropshipping business.
Dropshipping becomes successful gradually as your marketing strategy is implemented. Then, the money comes once you’ve built up some momentum.
Lack Of Investment In Advertising
One mistake dropshippers make is that they think once they get their dropshipping website, they're done. They think sales will pour ing because they have a fantastic site. Having a great site is critical, but the other critical element is advertising.
You need to plan for an advertising budget so you can implement a marketing strategy. We recommend that you keep at least $300-$400 available for ads. If you can't do that, you'll have to be even more patient when waiting for results.
Not investing in advertising is one reason why dropshipping businesses fail, so keep that in mind when starting yours.
Utilizing The Wrong Platform
Let's say you’ve done everything right so far, but you're still not seeing the results you were hoping for. You're wondering why your dropshipping businesses is failing to bring in customers? Well, you might be using the wrong platform.
If you see other dropshippers selling products in high volume, they probably did their research before choosing an ad platform. From what we’ve seen over the years, the platforms that encourage success are Facebook Ads, Google Adwords, and Bing Ads.
Make sure you invest your time and money on the right platform so you can drive traffic to your dropship site!
But, customers do know when they're being really overcharged. Some dropshippers are tempted to bump up their prices in order to make more on each sale, but your customers are smart. They'll recognize if they aren't getting good value.
So, make sure you do your research and find the market value for your product. Ensure that you aren’t overcharging your customers and you'll see the campaign success rate for your dropshipping business increase.
Bad Customer Support
Some dropshippers fail because they didn’t have automated returns. They had to deal with each customer return and they inevitably dropped the ball. It's not surprising. Returns can be a hassle! That's why DropshipUSA developed our dropship business model to have a built-in automated returns system so you never have to worry about that customer interaction. Check it out here.
People are pretty spoiled these days when it comes to fast deliveries. If you're getting orders from suppliers who take 20+ days, people aren't going to buy from you.
Consumers are very impatient about receiving purchases and, with the way the e-commerce industry is now, they actually don't trust long shipping times.
One of the best ways to increase sales on your dropship website is to offer fast shipping times! If you're wondering how to build a dropship model that has fast shipping times, watch our FREE webinar. We explain it all.
Unimpressive Or Confusing Site Design
User interface is so important when it comes to having a successful dropship website. The customer experience should be smooth, sensible and easy to navigate.
There's a lot more to website design than most people realize. It isn't just a great logo and color scheme, although appearance is important. The actual site itself should be set up in a way that moves the customer along toward checkout without them realizing it. There needs to be a planned flow, with prompts that get them from your homepage to their cart. This is the part of setting up a dropshipping website that most people don't know how to do (or don't know even exists.)
What Can You Do Ensure Success Rate For Your Dropshipping Business?
Now that you know some of the no-no's of dropshipping, let's talk about a few ways to model for success.
Here are a few things you should be doing to help your dropshipping website succeed:
- Focus on high search volume keywords and low competition.
- Do your research and find the right niche.
- Utilize free tools like Google’s Keyword Planner to find what you should target.
- Find the right supplier.
- Make sure your suppliers can meet your shipping demands.
- Be clear on what you can do for your customers and how long it may take to deliver the products.
- Offer more value for your customers than your competition.
- Ensure you offer top-notch customer service.
- Study more than one business model to find the right approach.
- Work on creating compelling content.
- Focus on digital marketing campaigns to ensure sustainable growth.
Building A Dropshipping Business That Earns
It's always important to be well-informed on the possible pitfalls when starting a business. We hope this article has cleared answered your questions about why dropshipping businesses fail and we hope you've learned a lot about how to make your dropship site succeed. We believe that there are lessons to be had in failure, and if you see the reasons we listed, you will understand what we mean.
If you want to get into dropshipping but don't know where to start, check out our completely FREE webinar on how to build a successful dropship business! We'll walk you through the process step-by-step. Or, you can have our expert team at DropshipUSA build a fully automated USA based dropship website for you in less than three days!