Why Dropshipping is a Bad Business Model
Dropshipping is a bad business model. It may seem like a great idea on the surface – you don’t have to carry any inventory, and you don’t have a large amount of cash to outlay in the beginning. However, there are a lot of problems that can arise when dropshipping, which can end up costing you time and money. In this blog post, we will discuss some of the biggest problems with the dropshipping business, and why it is not a good business model for most entrepreneurs.
Dropshipping is Competitive
The first problem with the dropshipping business is that it is very competitive. There are a lot of dropshippers out there, and many of them are selling the same products. This means that you have to work hard to differentiate yourself from the competition, and this can be difficult and costly to do. In addition, because there are so many dropshippers, it can be difficult to find reliable suppliers. This can lead to quality issues with your products, and it can also lead to long shipping times.
Dropshipping Has Low Margins
Another problem with dropshipping is that it is a very low margin business. This means that you will not make much money on each sale that you make. In fact, most dropshippers only make a few dollars per sale. This can be very frustrating, especially if you are working hard to drive traffic to your store. The “pros” won’t tell you this, but you’ll probably spend the bulk of your income driving traffic to your site, leaving very little for yourself at the end of the month.
Dropshipping is Risky
Finally, dropshipping is a risky business model. Because you are not carrying any inventory, you are completely reliant on your suppliers. If they have any problems with their products or shipping times, it can reflect badly on your business. In addition, because you are not dealing directly with customers, it can be difficult to build a relationship with them. This can make it difficult to retain customers and grow your business over time.
Shipping Times Are Out of Your Control
One of the most frustrating things about dropshipping is that shipping times are out of your control. Because you are not shipping the products yourself, you have to rely on your suppliers to get the products to your customers in a timely manner. However, many dropshippers have found that their suppliers often take longer than promised to ship products. This can lead to angry customers and a lot of negative reviews for your business, which will impact future sales.
Customer Service Issues Are Your Responsibility
Another problem with dropshipping is that customer service issues are your responsibility. Because you are not dealing directly with customers, it can be difficult to resolve their issues. In addition, because you are not carrying any inventory, it can be difficult to replace defective products or issue refunds. This can lead to a lot of frustrated customers, and it can damage your reputation.
All in all, dropshipping is a bad business model. It is very competitive, and it has low margins. In addition, it is risky and shipping times are out of your control. If you are thinking about starting a dropshipping business, you should think twice before doing so. There are much better business models out there that will allow you to make more money and have more control over your business.
Check out my blog on how to start an online boutique on a budget here: https://carinahatton.com/2022/06/27/how-to-start-an-online-boutique-on-a-budget-tips-and-tricks/
Want to open an online store that will actually make you money? Check out ECom Academy here: https://onlineboutiquecoaching.com/ecom.