Dropshipping is one of the most popular e-commerce businesses out there. However, the success rate of dropshipping as a business is not that high as other online businesses.
According to experts, 90% of dropshippers fail during the first month because business owners get frustrated about not making not enough money.
Often dropshippers rush into the business when they see someone else making money online, and they think they should too. Many dropshippers rush into creating a store of their own without testing the feasibility of the business.
When they see that they aren’t making the money they want, they become disheartened and leave. The dropshipping success rate is low because of impulsive decisions, but there isn’t any factual data about the number of failed dropshipping businesses.
One thing we do know is that drop shipping as an e-commerce business is considered as a medium-risk business. Dropshippers usually spend a vast amount of money on paid advertisements, and they rely on these to sell their products.
So why do dropshipping businesses fail? Well, here we will list the reasons why they fail, and hopefully, if you are interested in dropshipping, you will be able to take away lessons from these reasons and know what not to do.
Armed with the knowledge of how dropshippers failed, you should be able to create a successful dropshipping business. So let’s get into discussing the reasons:
Reasons Why Dropshipping Businesses Fail
DropshipUSA has years of experience in building drop shipping websites. Because of our years of dealings with dropshippers, we have seen many businesses fail and succeed.
That puts us in a unique position to have observed why they failed. Because we have seen the highs and lows of businesses we know what works and what doesn’t and that’s how we were able to create this comprehensive list of reasons why dropshipping fails. So let’s check out what they are.
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. For example, you may want to find a clothing niche and focus on US traffic when building your business.
However, that may not be the right niche to focus on if you want immediate success. If it’s not the right niche, then you will never see an order come in.
However, the product you chose might just be the right order for a city in Australia. When you move your focus to that, you will see orders coming in regularly.
So as you can see, the wrong niche is often the reason behind dropshipping businesses failing. Now, to find the right niche, you need to do extensive market research, and with that, you need to keep testing your model to find the right fit.
Impatience & Lack Of Persistence
If you want fast return or results then dropshipping isn’t for you. It takes patience and persistent effort to build a successful dropshipping business.
If you cannot be patient in your efforts and put in the work with minimal returns at first then you better work on something like Forex where you will see fast results whether you earn money or lose it.
Dropshipping needs more effort at the start to get the business rolling, and then the money will come once you’ve built up some momentum. So remember impatience and lack of persistent effort can quickly kill your dropshipping dreams.
One of the major mistakes that most dropshippers make is that they think once they set up the dropshipping website they are done. That sales will pour through because they have a fantastic site and offers excellent value. Wish that were the case.
You need to invest in your business once you are done setting it up. If you are just starting, you need to ensure you have a digital marketing strategy and budget.
You need to keep at least 300 to 400 dollars at the minimum for ads alone. Now, if you can’t do that, then don’t start the business. Save up some and then start setting up your business.
Remember that lack of investments and deficiencies in resources is a significant reason why dropshipping businesses fail, so make sure you have it when starting.
Utilizing The Wrong Platform
Say you’ve done everything right, and you have a marketing budget for your dropshipping business. However, you are still not seeing the results you want to.
We know plenty of dropshippers who suffer from the same problem. Do you know why these dropshipping businesses are failing to bring in customers? Well, it’s because these dropshippers aren’t using the right platform.
If you see other dropshippers selling products in high volume, they are marketing the products right, and you aren’t. So do your research and find the platforms that bring in businesses.
Working on the wrong platform will never yield the results you want. From what we’ve seen over the years, the best platforms that breed success are Facebook Ads, Google Adwords, and Bing Ads.
Make sure you invest your time and money on the right platform, and soon you will see orders coming through.
One of the outstanding traits of online shopping is comparison shopping. Online consumers have a plethora of options when looking for a product online.
So what they do is they compare different dropshippers and see who is charging what. Your customers are smart if they see you overcharging for a product and they see that they can find a better deal somewhere else then they won’t come to your store, will they?
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 will see that the campaign success rate for your dropshipping business increasing steadily.
Lackluster Customer Support
In this day and age, people don’t just look for excellent quality products they also look for companies that value the customers.
We know plenty of dropshippers who failed because they didn’t have good business managers who appropriately cared for customer needs.
Dropshipping isn’t only about shipping the products; it’s a whole lot more. You need to answer their queries and stay connected with your audience.
You need to ensure that you are engaging your audience in every aspect and following up on whether or not they are satisfied with the product.
Engaging with your customers and audience will show them that you care and bolster your customer support. You are not only selling your product, but you are selling an experience. Other dropshippers are selling the same products, so your service is what will set you apart from the others.
People are used to fast deliveries. If you are getting orders from suppliers who take 20 or more days, you will see less traffic than most dropshippers.
One of the reasons we here at DropshipUSA provide FBE solutions is because of the fast delivery time. Another reason why dropshipping fails is that businesses don’t integrate ePackets and they don’t get tracking numbers.
Your customers will look for tracking information and order status when ordering from your business. Adding this feature will work towards gaining the trust of the customers and ensure the success of your business.
Most dropshippers think that starting the business is the only thing you need to do to be successful. But as you can guess, that’s not the case at all. You need to be managing the business and have the right process to ensure sustainable growth.
According to Forbes, every 8/10 businesses fail in less than a year, and the main reason is management inconsistency. So make sure you instill a proper management process for maximizing the success rate for your dropshipping business.
Unimpressive Site Design
Now we can tell you how an unimpressive website design can hamper your business, but you already understand why it is. User Interface is of the utmost importance when it comes to building a successful dropshipping site.
When you can make sure that customers are getting the best user experience when coming to your website, you can rest assured that they will return.
When you make a good impression with your website, you are making sure you stay on people’s minds, and that makes for repeat visits. And you already know what we will say next, repeat visits mean your dropshipping business is on the right track for success.
So these are the reasons why dropshipping fails. Make sure you don’t make those same mistakes. Whatever you see here, make sure you do the exact opposite, and you will be well on your way to success.
What Can You Do Ensure Success Rate For Your Dropshipping Business?
We talked about why dropshipping fails and why the success rate for dropshipping is low. So now let’s talk about how you can ensure success:
- 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.
- Work with more than one supplier to ensure your business isn’t halted.
- 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 copies and contents.
- Focus on digital marketing campaigns to ensure sustainable growth.
Building A Dropshipping Business That Earns
So there you go, these are all the things we wanted to share about why dropshipping fails. 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.
We understand that the success rate for dropshipping businesses is low, but we gave you an insider list of how you can make sure your business is a hit. So follow what we say and work towards building the perfect dropshipping business.
Well, that’s about it for now. If you have any queries about dropshipping, contact us, and our developers will be more than happy to help you out.
So that brings us to the end of our discussion for now. We will come back soon with some more information on the world of dropshipping. Until then, see ya!
Originally posted in: https://dropshipusa.io/blogs/news/why-dropshipping-business-fail