You have probably heard of the high failure rate of dropshipping business despite the low barrier of entry for this business model, and now you want to know why dropshippers fail before you start by yourself.
I have started my journey with dropshipping back in 2018, and I found out that there are many reasons that cause people to fail in dropshipping, which I will be mentioning here, along with the solution to each one so that you increase your chances of succeeding.
20 Reasons Why Dropshippers Fail
1 – They Come with an Employee Background
The biggest reason of failure for all kinds of online businesses, not only dropshipping, is that most of those who start with it come with the mindset of an employee, not a business owner.
And worse, they don’t want to put in the hours to the work like they do as employees, and they expect to get the rewards of a business owner.
That doesn’t make sense.
An online business like dropshipping is a real business, and the dropshippers should act as business owners in order to succeed.
This means wearing many hats at the same time, managing the cash flow, measure and adapt, and working consistently without expecting profit at the beginning.
This is not a get-rich-overnight thing.
And now you might ask, then what’s the point from starting in the first place?
The reward for this venture is that if you continue properly until you succeed, you could reach a point where you get the rewards as a business owner, and enjoy a better income and lifestyle than the ones of an employee.
The biggest advantage though is that you can start a dropshipping business for a small investment of $1,000, and you can start working on it on daily bases even when you have a 9-5 job, until you succeed and make a sustainable income that would substitute for your day job’s salary.
While if you want to start an offline business, then you need several thousands of dollars in order to start, and you can’t start it while working a normal job.
The solution to this problem is to treat dropshipping as a real business and go in it for the long run and put in the consistent effort until you succeed.
2 – No Added Value
Another mistake the dropshippers do and it causes them to fail is that they don’t have a USP (Unique Selling Point).
They add some random products to their dropshipping stores, or products that were best-sellers in the past few months, and try to sell them.
Why would anyone buy from your dropshipping store, if the product is easy to find on the shelf at Walmart, or through a simple search on Amazon?
The solution for this point is to add value to your potential customer by giving something unique.
This could be:
- A product that solves a problem that other similar products don’t solve.
- A product of a higher quality and/or grade.
- Cannot be easily found on other marketplaces or brick and mortar stores.
- Better shipping terms.
- Guarantees.
- A better user experience on your dropshipping store.
- A complete package.
- …etc.
There must be a reason on why someone should buy from your dropshipping store, other than the fact that you just want them to buy.
The reason could even be by educating them on how to use it for a certain purpose or marketing it through a different angle from the one that other sellers are using.
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3 – They Don’t Create Trust
Many dropshipping stores are created without taking the trust factor into consideration.
Missing elements on the store’s homepage, low quality images, lots of spelling and grammatical mistakes, unclear product descriptions, no way to contact them, no guarantees, no shipping details, and the list goes on.
The solution to this issue is very easy.
Before ask someone who doesn’t personally know you to buy a product from your store, ask yourself: if I visit this store and I don’t know who owns it, do I trust buying from it?
That’s the easiest way for knowing whether others should trust your store and buy from it or not, and do what is necessary to make it trustworthy.
4 – They Don’t Give People What They Need
Many dropshippers come to dropshipping as a way of getting rich without thinking of why they should get paid.
They create the store, add products, and tell people to buy!
People didn’t find their money in the streets, and won’t buy from you if you don’t give them a reason on why they should buy what you sell.
Of course, you are in it for making money, but no one successful business makes money without giving the customers something they would benefit from.
It’s a value exchange.
The solution here is to offer them a product that helps them solve a problem, makes their life easier, or make them proud.
Tell them what is in it for them, not what is in it for you.
5 – They Are Copycats
Another failure point in dropshipping is when a dropshipper tries to copy someone else, such as the “guru” that taught him how to do dropshipping, another successful store, Amazon, …etc.
They take the same products and try to sell them to the same audience using the same advertising platform, same targeting, same ad copy, same images or videos, ….etc.
And then they ask, why did my dropshipping store fail?
It is because you are doing exactly what hundreds of others have already done.
Some products have saturated the market, and you either need to find other products to sell, or find a different angle, platform, or audience, in order to advertise them and make sales.
And some stuff that is Amazon or other well-known online stores do work with them because they already have their own customers.
Of course, you need to learn from others’ experiences, but you need to add your unique touch or added value in order to make people who don’t know you buy from your store.
Remember the previous reason, what’s your unique selling point?
6 – Choosing The Wrong Platform
Dropshipping is a business model that is not constrained by using one single platform in order to make money with it.
There are many online platforms to do dropshipping online, and even offline!
You could for example, run an ad in the magazine for a product that you don’t have in stock, provide your phone number, and when someone calls you and makes an order, you get a delivery company to take the product from the supplier and pay them, and ship it directly to the customer, get the price, give it to you.
But of course, it is more scalable and easier to manage when done online.
And there are many platforms to do dropshipping online, some you own, and some you don’t, and each one has its own advantages and disadvantages.
For example, you could do dropshipping on a marketplace like Amazon or eBay, and that way, you don’t need to use paid traffic by yourself as these platforms have their own users that search for products on them.
But the issue is that there’s a lot of competition there, and it is difficult to sell with high margins.
Add to that, you don’t own the customer, but the platform does, which means that you can’t market to them to buy other products later.
And while building a store that you own on a domain name of yours can cost a little bit of money for the platform and for advertising, but it can be more profitable and scalable on the long run.
And this is the solution to this issue if you want to succeed with dropshipping on the long run.
You need to own your store and your customers.
And there are many platforms that make it easy to start a dropshipping store online, but the best one among them is Shopify for many reasons.
The second best choice would be WrodPress, but Shopify is still better as I explained in my Shopify vs. WordPress dropshipping comparison.
Shopify is so easy to use and popular among dropshippers to the extent that some people ask if Shopify was only for dropshipping.
7 – Low-Converting Stores
Beside the mistakes that lower the trust in your dropshipping store, there are some issues that make it difficult to convert visitors into buyers, and thus, spending money on advertising without a good return and profit.
These could be low loading speed for the store and product pages, unclear images, low-conversion copy on the product page, lack of relevance to your niche, …etc.
The solution is to create a clean store and clean product pages that are easy to browse, optimize images in order to reduce their size and make the store load faster, show the benefits of the products before the feature, …etc.
And there are some add-ons that you can use in order to create a high converting store, such as using a currency converter that shows the price in the local currency of the visitor in order to increase trust and relevance.
I would consider using a high-conversion theme for your store that is optimized for conversions.
For Shopify stores, Debutify is one of the best themes as it offers lots of features that are designed to increase conversions, and it comes with a free plan.
8 – Listening to The Wrong Advice
Most dropshippers, like myself years ago, start dropshipping by learning from people who are not actually successful at dropshipping themselves.
Many of the “gurus” you see on YouTube and in Facebook ads who claim that they can teach you how to make millions with dropshipping are not actually making money with dropshipping themselves.
They are actually making their money from selling you their expensive courses that cost $997, $1,997, $3,497. and even more!
That’s insane.
Most of these fake gurus have actually started with dropshipping and didn’t succeed, and then they decided that the only way for them to make money is by scamming people with their expensive courses by selling them on the dreams of making money fast.
And the screenshots they show you with lots of sales and money in their dashboards are either fake, stolen from someone else, or at best, probably real screenshots from their own stores, but are not an evidence of any success because they don’t show you the expenses that had to pay for products, shipping, and advertising.
This leads beginners who join these courses to learn how to do things the wrong way, lose a lot of money without making any results, and then giving up.
The solution to this issue, if you want to learn dropshipping the right way and succeed at it, is by finding one legit mentor, learning from him, and applying on what you learn, adapt and optimize, until you succeed.
The best dropshipping mentor that I found who teaches dropshipping the right way is Franklin Hatchett, who sells his Ecom Elites course for a really low cost, and teaches what others don’t teach in their $1,997+ courses.
9 – They Don’t Give it Enough Time & Consistency
As I explained earlier, most dropshippers fail because they don’t have the mindset or the experience of a business owner, and they listen to the wrong people who promise fast riches.
This makes then quit too soon when they don’t make big results after few days or weeks of starting.
And worse, they are not consistent in putting the effort.
Today they work two hours, tomorrow they are tired from the 9-5 job, so they don’t do anything, the next day the “work” for an hour, and then they ask why they don’t get any results and give up.
This is a real business, and you need to put in the effort on consistent bases before you expect results.
The solution to this is to give your dropshipping business a specific time slot of 2-3 hours per day, regardless of how tire from your day job or how busy in your social life you are.
And you need to learn, apply, measure, adapt, optimize, and apply again on consistent bases for 3-6 months at least before you consider quitting.
10 – Starting with a Very Low Investment
Although the low barrier of entry to dropshipping, thanks to platforms like Shopify, but it is still a business, and needs some investment in order to run it before you start making profit and the business starts spending on itself.
In addition to the cost of the platform that you will use in order to build and host your dropshipping store, which is very low compared to the cost of starting a brick and mortar store, and assuming that you won’t be using any tools at the beginning, you still need to pay for the advertising.
And the amount of the investment needed depends on the traffic method you want to use, your niche, your products, and on how well your store is optimized.
Facebook ads seems to be the most popular method for driving traffic to dropshipping stores thanks to the big user base and the vast ability to scale.
But it requires an investment of at least $1,000 to start with, assuming that you already know how to run Facebook ads effectively.
You need this money because you need to test different products and different audiences until you find one that sells well.
However, this is not the only way to market your products, and sometimes, it is not the best way.
Some products in some niches are better promoted through influencers, search ads, seo, and many other method.
And sometimes, Facebook ads are good, but you don’t have the necessary investment to start and continue with them until you become profitable.
And then you stop advertising and quit because you don’t have the money to continue.
This is a major reason why most dropshippers fail.
The solution to this is to decide on the promotional method that you want to use, and make sure you have enough money to use it.
And if you want other methods that cause less than what FB ads cost, then you can check my list of free traffic methods for Shopify stores.
11 – They Ignore The Cash Flow
As I explained in the first reason in this list, dropshippers come with the employee mindset, and think that they don’t need to worry about the financial side.
Just add some products, run ads, and you will make profit.
But that’s not the cause.
Almost no dropshipper succeeds from selling the first products through the first advertising campaign.
And sometimes, the first product might get you some sales, but that doesn’t mean that you are profitable.
Many beginners in dropshipping ignore looking to the numbers, which makes spend lots of money and time before realizing that they are not making in increase in their income and give up.
The solution to this is that you need to see how much it costs you to make a sale, how much to buy and ship the product, any taxes paid, and subtract that sum from the price your customer pays you in order to see if you make any profit or not.
And usually, you need to make some optimization before becoming profitable.
For example, you might need to stop the ads that don’t bring sales, optimize your ad copy and the sales page for better conversion rates, offer products as upsells and cross-sells, retarget those who didn’t purchase on the first visit with ads, and so on.
You need to do the necessary changes and keep tracking the progress and the cash flow until it goes to the positive side, and see how you can increase it further in that direction.
You are the business owner, and you need to take care of the cash flow, unlike it is with the normal day job.
12 – Low Quality Products
Another fatal mistake that makes dropshippers fail is that because they want to make lots of sales, they go after the cheapest products from dropshipping suppliers on marketplaces like AliExpress.
Sometimes, it looks like if the same product is sold from many suppliers at different prices, and then choose the cheapest one.
But in many cases, the cheapest supplier sells a low quality copy of someone else’s product, but uses the same photos.
Selling these products will get you lots of refund requests, charge backs, negative reviews, and will make you lose on the opportunity of repeat customers.
The solution is to see a product that has lots of positive reviews from many different customers and from a supplier who has been there for years and has a successful record.
And it is always recommended that before you sell any product, you actually buy it, for yourself, maybe from more than one seller, and see if it was worth the price or not.
13 – Low Pricing & Free Plus Shipping Offers
Many dropshippers, when they don’t make sales right away, they think that they should reduce the price in order to increase sales volume, or maybe they have seen some guru recommending that they offer some products with the free+shipping method and focus on volume.
These tactics rarely work, maybe with low priced consumable items that customers would buy in big quantities, or with products where you are sure that you can offer other relevant products as an upsell, or cross-sell.
But in general, going low in price or offering freebies doesn’t bring enough rewards, if any.
It will just bring you low-profit, high-maintenance customers.
You would need to fulfill many orders in order to make big total profit, respond to many customers’ emails asking about the delivery date, refunds, …etc.
The solution here is to find useful or unique products that are not easy to find elsewhere, show your customers that value in getting them, and offering them at a good margin that gives you some space in order to market your products.
14 – Unreliable Suppliers
Another issue, is that on marketplaces where you find dropshipping suppliers, like AliExpress for example, there are lots of suppliers of different expertise levels, financial stability, and workforce size.
And usually, for the same product, you will find many sellers to choose from.
Choosing the wrong supplier to dropship products to your customers can cause many issues such as high refund rates due to low quality or long shipping times.
And sometimes, some dropshippers will stop shipping because they ran out of stock, and they won’t notify you, and you will start getting angry emails from customers and refund requests.
Take the time to find one or two suppliers with a good record and lots of sales and legit positive reviews of the product you want to sell.
And as explained earlier, you better make a test purchase from them to see the quality of their product, their shipping terms, and try to contact them and see if they respond fast and professionally (typically within 24 hours).
There are some services and tools, like SaleHoo Dropship Shopify app, that allow you to research from a set of vetted dropshipping suppliers that have a good record and offer fast shipping from countries like US where the vast majority of your customers is expected to be located.
15 – Shipping Delays
In the age of the 48-hours delivery of Amazon, it is hard to convince people to wait for two weeks or more in order to get their item.
If they didn’t know in advance that it would take their order this long in order to arrive, they would usually think that you are trying to scam them, and they would either contact you continuously asking about where their package is, or worse, request a refund from you through email, or file a charge back through their credit card provider.
The solutions to this is to be honest about the expected delivery times on your product pages and on the “Delivery Guarantee” page.
16 – Using The Wrong Marketing Channel
There are many marketing channels that you can use in order to drive targeted visitors to your dropshipping stores, and each method might be good for some products, niches, and countries, and it could be not as good for promoting other products, to other audiences or countries.
Most of dropshippers use Facebook ads regardless of the products they want to sell, which makes them lose money without getting enough sales or profit.
If your product is something that people actively look for on the search engines, then you may consider using search ads on Google and Bing.
And if you sell apparel with quotes or about a certain passion, then you may consider building a following on Instagram using relevant hashtags, and advertise your products there.
17 – Not Retargetting
Many customers don’t buy on the first visit to your store.
They add a product to the cart, go to the checkout page, and then leave without buying.
They tell themselves that they will come back later in order to make a purchase, and then they forget.
Or maybe they have found that the price is a bit high.
And not retargetting them with your ads means that you are leaving money on the table.
Use the retargetting ads on Facebook and Google Ads in order to remarket your products to people who didn’t buy on the first visit, and use a slightly different creative or copy.
And maybe, you use scarcity or offer a small discount in order to encourage them to make an order.
18 – They Ignore The AOV & LTV
It is said to be seven times easier to sell to an existing, but happy, customer, than to sell to someone who has never purchased from you before.
Dropshipping beginners seem to stress too much on getting new expensive customers and forget about the existing ones, and never advance in their business.
And they keep spending lots of money trying to find them.
And if you have existing customers, you can remarket to them to buy other products from your store, and they could convert at a lower cost than the cost of their first purchase.
And you could use email marketing in order to reach out to them on continuous bases and offer deals and new products.
This way, you can increase the customer lifetime value (LVT).
But even before you do all of this, you can tray to increase the average order value (AOV) by offering products at bundles, upsells, or cross-sells.
This way, you can increase the order value for the same cost of advertising.
19 – Not Customer Oriented
Let’s be honest.
There are many scammers out there.
Some of them think that they are smarter than their customers, they try to make lots of sales with very cheap, low quality products at a very high markup, and when someone asks for a refund, they just ignore the request.
These will eventually fail because customers will mostly file a charge back, leave a bad review, and most important, never comeback to buy from the same dropshipper.
And that’s why these dropshippers fail.
It is always better, for ethical and business reasons, to make your priority to keep your customers happy so that they keep coming back and recommend your store to others.
20 – Lack of Scaling Capabilities
Another point where dropshipping beginners fail is that they might find a selling product, but they don’t know how to capitalize on it and make the best out of it.
There are many ways to scale with a product by advertising it to a larger audience using the same marketing channel, or by expanding to other marketing medium.
They keep moving slowly until other dropshippers find out about the product and start selling it until the market is saturated with it, and then you have to look for another product to sell.
Try to learn the different scaling methods and once a product sells well, and you the customers are happy with what they received, try to start scaling your advertising while keeping some money for fulfillment and marketing in order to make the most out of it.
The course I mentioned earlier, Ecom Elites, teaches the different methods of scaling with Facebook ads, and teaches you how to use different marketing channels to expand your store’s reach.
Conclusion – Can You Avoid Failing at Dropshipping?
Sure.
I gave you here the main twenty reasons why dropshippers fail with their stores, and I gave you the recommended solution to each one.
Most important is to treat it as a business and work on it consistently, take care of your customers, try to learn, apply, measure, optimize, and follow up, and you will increase your chances of succeeding despite the low overall success rate of dropshipping stores owned by others.
If you found this list helpful, please, share it with someone who might benefit from it.
And if you still have any question, then please, tell me in the comments’ section below, and I will do my best to help you out 🙂