7 Costly Mistakes to Avoid as a Beginner Dropshipper

As a beginner dropshipper you face many challenges when starting your business.

You have to decide what kind of dropshipping store you want (general, niche, or one-product), how you’re going to price your products, what marketing plan to use, and which suppliers to work with.

In this article, we’ll explain why dropshipping can be a good choice and what the prospects are for 2023. We’ll also talk about some of the common mistakes that beginner dropshippers make, which can be costly.

Finally, we’ll show you how to avoid these mistakes and make your dropshipping business successful.

Is dropshipping still worth it?

Starting a business can be intimidating for new entrepreneurs. But over the years, dropshipping has become a popular business model for first-time ecommerce store owners. It helps you to avoid having to worry about the upfront costs of inventory or having a physical store, so you can focus on selling.

The global dropshipping market has grown rapidly and its expected to be worth almost $600 billion by 2027 (from around $200 billion currently).

Dropshipping is popular because a third-party supplier handles the shipping of products. This allows you as the store owner to sell products without the upfront cost of purchasing and storing inventory.

For example, a store owner in a traditional retail model might need to invest a significant amount of capital in inventory before they can begin selling, while a dropshipper can sell products immediately without any upfront inventory costs.

This can be a significant advantage for store owners who are just starting out or who do not have a lot of capital to invest.

So, with that said is dropshipping still a good option in 2023, and why?

YES! YES! YES!

The industry is booming. Over the last few years, there have been 3 major increasing factors which has led to the perfect storm for dropshipping operations:

1. Increase in working-from-home: 

The pandemic led to a significant change towards remote work, as many businesses have implemented work-from-home measures. 

As a result, many employees are loving the hybrid work models, where they can combine working from home with working in the office.

This shift towards remote work has opened up new opportunities for individuals looking to find alternative sources of income, including starting their own dropshipping businesses.

2. Increase in online shopping: 

Whilst people were all at home, unable to visit their local retailers (but in need of retail therapy), they realised just how refreshingly simple it is to order online. 

This has led to a shift towards prioritising at-home shoppers across various industries, meaning your dropshipping business can take advantage of this trend.

3. Increase in people seeking side hustles: 

It has become common for many people to have a side hustle or be seeking one out in order to create multiple sources of income.

If the pandemic taught us one thing about employment, it’s that it isn’t secure (for the vast majority). 

When it hit the fan, the employers by and large did not have the employee’s backs. 

This has led to a lot of people considering a side hustle – some added security to soften the blow, or indeed remove the reliance on an employer and eventually get out.

Mistakes happen

As with any new venture, you’ll make mistakes – and plenty of them. There are some mistakes however, that will no doubt cost you money, which are always best to try and avoid.

Here are 7 mistakes that new dropshippers often make which can be costly and how to avoid them:

To avoid this mistake, it’s important to develop a comprehensive marketing plan that includes a variety of tactics to reach potential customers.

This might include:

• Search engine optimization to improve your store’s visibility in search results
• Social media marketing to engage with customers and build a following
• Email marketing to stay in touch with customers and promote new products
• Paid advertising to reach a wider audience

It’s a good idea to regularly review and adjust your marketing plan to ensure that it’s effective and aligned with your business goals. This might involve tracking the performance of different marketing tactics and making changes as needed.

You should also get to know your target audience and understand their needs and interests, as this can help inform your marketing efforts and make them more effective.

2. Working with unreliable suppliers

Working with unreliable or low-quality suppliers can lead to unhappy customers and lost sales.

This can be frustrating for customers who receive faulty or low-quality products and can damage your store’s reputation.

To avoid this mistake, thoroughly research potential suppliers before partnering with them:

• Read reviews and check their website and social media presence to get a sense of their reputation and customer satisfaction.
• Reach out to them to ask any questions you may have, and consider factors such as their shipping times, product quality, and return policy.

It’s also a good idea to have backup suppliers in case of any issues with your primary supplier. This can help prevent delays or shortages in your inventory and ensure that you can continue to meet customer demand.

3. Choosing the wrong pricing strategy 

Choosing the wrong pricing strategy can lead to lost profits and customer dissatisfaction.

For example, pricing products too low can lead to low profits, while pricing them too high can drive away potential customers.

To avoid this mistake, it’s important to research and compare prices of similar products in the market, as well as consider the cost of production and shipping. It’s also a good idea to test different pricing strategies to see what works best for your business and customers.

For example, you might try offering bundle discounts or free shipping to encourage sales, or experiment with raising or lowering prices to see how it affects demand.

It’s also important to be transparent about your pricing and clearly communicate any fees or charges to customers. This can help build trust and prevent misunderstandings or dissatisfaction.

4. Not having a clear return policy 

Not having a clear return policy can lead to confusion and dissatisfaction among customers. This can lead to lost sales and a negative reputation, as customers may be hesitant to make purchases if they are unsure of the return process or any associated fees.

To avoid this mistake, it’s important to clearly communicate your return policy to customers. This should include details such as the conditions under which returns are accepted, the process for returning items, and any associated fees.

For example, you might specify that returns are only accepted for defective or damaged products, or that customers are responsible for paying for return shipping.

Having a clear and fair return policy can help build trust with customers and encourage them to make purchases from your store. It’s also a good idea to be flexible and willing to work with customers to resolve any issues that may arise.

5. Not investing in a professional website: 

First impressions count. A poorly designed or unprofessional website can turn potential customers away.

This can lead to lost sales and a negative reputation, as customers may be hesitant to make purchases from a store that doesn’t look trustworthy or professional.

To avoid this mistake, invest in a professional website design and make sure your website is easy to navigate and use.

This may involve hiring a web designer or using a user-friendly e-commerce platform like Shopify.

Your website should include clear product descriptions, high-quality photos, and easy-to-use payment and checkout systems.

It’s also important to regularly review and update your website to ensure that it’s up-to-date and accurate. This might involve adding new products, updating product descriptions, or making any necessary design changes.

6. Not having a clear market focus 

Just because there are many products you can sell doesn’t mean you should offer a lot of variety. One of the most common mistakes that first-time dropshippers make is offering too much product variety and having no specific market focus.

Not focusing on a specific market or niche can lead to a scattered and ineffective marketing strategy. This can lead to wasted marketing efforts and resources, as well as difficulty building a loyal customer base.

To avoid this mistake, research your target market and determine what products and services they are most interested in. Consider the sales velocity and profit margins of the products, as well as the competition and demand in the market. Then, focus your efforts on marketing and selling those products to that specific audience. By focusing on a specific niche or market, you’ll have a better chance of standing out and attracting loyal customers.

For example, if you’re selling outdoor gear, it might not be effective to also offer a wide variety of home decor products. Instead, focus on building a strong selection of outdoor gear and accessories, and market your store to outdoor enthusiasts.

7. Poor customer service

Providing poor customer service can lead to lost sales and a negative reputation.

This can be frustrating for customers who have questions or issues with their orders, and can lead to negative reviews and reduced trust in your store.

To avoid this mistake, it’s important to make customer service a priority and make sure to respond promptly to customer inquiries, address any issues or complaints in a timely and professional manner, and offer helpful and friendly support.

This might involve setting up a customer service email or phone line, or using live chat software on your website.

You should have an FAQs page, which is a quick way to get crucial information to customers and can pre-empt a lot of questions.

It’s also a good idea to address potential customer concerns, such as by providing clear product descriptions and shipping information on your website, or offering a satisfaction guarantee.

Conclusion

Starting a dropshipping business can be a rewarding and lucrative endeavor, but it’s important to avoid common pitfalls that can cost you time, money, and customers.

Some of the costliest mistakes that new dropshippers make include:

• Having a weak marketing plan
• Working with unreliable suppliers
• Choosing the wrong pricing strategy
• Not having a clear return policy
• Not investing in a professional website
• Not having a clear market focus, and
• Poor customer service

If you’re just starting out as a Dropshipper or are looking to improve your business, consider taking the time to review these mistakes and implement strategies to avoid them. By doing so, you’ll be well-equipped to build a successful and sustainable dropshipping venture.