Dropshipping has a limitless advantages and I mentioned the majority of them in my blog articles. But the time comes to take about the disadvantages of dropshipping as well. Then I will give you some to overcome these advantages and change it to awesome advantages.
Hope you enjoy reading this!
1. Almost No Control:
In the dropshipping process, you control just both your product price and which kind of this product you won’t sell in your dropshipping store.
Regarding things that you can’t control over are:
Time of shipping: people who dropship from china suffer from this. They can manage their shipping method (like epacket)
Design of Package: most dropshipping suppliers won’t give you permission to control or modify their package design. Just, They take care of everything.
These shipping ways done enable you even to provide an extra thing to your customers. To make it personal, some webshop owners want to put a little thank you note into the package or maybe a special discount code for next time. This also means that if your customer has a complaint about something in your supply chain (order processing, refunds, delivery speed, and so on), that you can’t easily address it and fix it, because it’s not your supply chain!
Way To Overcome This Disadvantages of Dropshipping:
If you are from ones who are dropshipping with Aliexpress, unfortunately, you can change nothing when you are sparing effort and don’t make any profits. You can choose a better experience for your customers with more than one alternative to Aliexpress!
However, If you’re making some profits with a product, then you could look at ordering the product in bulk and taking care of the rest yourself or you could do it via a fulfillment center (like Amazon FBA).
For example, you can change your package design or add a new extra value with your product to your customers and you will have a faster shipping time more than if you are dropshipping with Aliexpress.
Another happy advantage that your customers freely will have the chance of both ordering or needing to send multiple products and packages. (below you can find more)
Here is a great video regarding ordering in bulk:
Private Label Bulk Order STEP BY STEP! (Alibaba product sourcing 101)
2. Sometimes You Can’t Combine Products For an Order:
This would mostly happen in two cases. First, if you are dropshipping with Aliexpress. Second, when you are in the contact with more than one supplier with different platforms. The result will be that you cant combine all customer’s product orders or packages into one.
This segmentation of customers packages and not reaching at the same time that will be a source of complaining and not only that, but you will also pay shipping fees multiple times.
The Solution of Dropshipping Disadvantage?
The core of the solution is in dealing with less Aliexpress, so your customers can get their desired orders in one package. Which means that they will receive them sometime. Another thing which is an available thing to do is to add a question regarding this to your FAQ page.
Then keep sure that your customers will get a great customer experience.
3. Potential Quality Control Issues:
The point lies in that dropshipping definitely, that you never have a look at the product that reaches your customers. Therefore, you can’t manage the quality of the product. The worst of that is you will be informed about the quality of these products from your customers in hindsight. Maybe one day you will wake up and see a ton of emails of customers complaining about their product.
What The Way to Solve This Disadvantages of Dropshipping?
Getting samples of products from your dropshipping supplier can get you calmer about the product that is purchased from your customers. You can play the role of a customer. you ordering the product yourself and sending it to your own house to check the delivery time, the package, and the quality of the product. This way you can check all the processes yourself.
4. Stock Shortages:
As you read above, you don’t have control over a lot of things when you’re dropshipping.
The same goes for the stock of your dropshipping supplier.t could happen that your product is suddenly selling well and that your dropshipping supplier can’t keep up. Luckily this one is easy to solve!
How You can manage these Dropshipping Downs?’
Good and continuous contact with your supplier can fix most of any coming problems. Get informed about how much stock they got and how fast they can have a new inventory.
If that done and your supplier runs out of stock, then you can easily contact another dropshipping supplier to provide the same products. You can easily find a dropshipping seller that offers the same product on Aliexpress. You could even take care of this before your dropshipping supplier runs out (see it as a backup plan). You can do it simply by massaging.
Here also, don’t forget to have samples for these products from the supplier. So it’s easy to offer you, customers, with their orders and product even if your suppliers are running out of inventory.
5. Less Profit:
The hidden “cost” of dropshipping is the lack of bulk pricing. You will likely pay more for each item you sell as compared to paying less for a large inventory of items, leading to less profit.
Unlike a regular wholesaler that would sell you their merchandise in bulk, a dropshipping supplier sells you a single unit every time you place an order.
Because they sell a single unit each time, they are responsible for storing the products, ensuring the products, and other associated costs like paying staff to retrieve, package, and process single items.
Wholesalers already operate on very low-profit margins and rely heavily upon large volume purchases to make a decent profit, so when these additional costs are added, the wholesaler has no option but to increase the price of individual items.
That means your profit margins will be lower because you pay more to your dropshipping supplier.
You Can Solve This Disadvantages of Dropshipping in One Way:
You can solve this dropshipping con in one way: which is to try hard to sell more and more products. Take this obvious example, selling 20 products for $20 profit = $200 profit, but if you sell 200 products for the same price, then you’re looking at $2000 profit. Downside then is that you will have more work to do and more chance that order doesn’t go as expected.
That illustrates the reason behind being people choose high dropshipping products price more than low-priced products. If you are interested to learn more about this topic, then I suggest reading this article by Modalyst.
Keep in your mind that you may sometimes have to pay more than the supplier but you still haven’t to pay for the storing and shipping process to your customers. Your supplier is the one who will be responsible for this. But if you’re getting consistent sales from a product or more products, then it might be wise to import them in bulk from, for example, Alibaba.
Just keep in mind that even though your cost per product is cheaper because you buy in bulk and the supplier doesn’t take care of sending it to your customer, you will still have extra costs to add later one. Like shipping it to your customers, warehouse costs, and, if needed, import costs.
Important to know even though it is more work to import it in bulk and send it yourself to your customers (or you let a fulfillment service take care of that). It will be worth it. Just imagine how many extra efforts you can put into the whole package and delivery:
You can make sure your delivery time is 1-3 business days instead of 1-3 weeks. You could add a business card of your company (your store) inside the package with a discount code for a second purchase! You can brand your packaging with, for example, Packhelp.
6. Refunds Can Be Complicated:
Refunds issues can be fixed in general if you choose a suitable dropshipping supplier. A good supplier makes fewer refund problems.
If you deal with Aliexpress and dropshipping from China, the time of shipping with being around 2-3 weeks to reach your customers. Besides, being your products out of your control. That definitely will affect increase the chances of refunds.
How to Solve This Disadvantages of Dropshipping?
You can allow the refunds and returns of your product just in one way if letting the customers keep the product and have a new one is cheaper according to you. If not, allow the customer to send back the product to your supplier. You only have to decide if you pay for the return costs or not.
Once you are interested in learning more about return or refund policy. then I suggest reading my other article Dropshipping Returns & Refunds:
7. Difficult Customer Service:
As I mentioned before that you have no control over some steps of the process like the supply chain. To illustrate, if there are complaints from your customers, then you won’t be able to fix them. If your customer got a question and you can’t answer it, then you need to discuss that with your dropshipping supplier first, this might take some time.
There is A solution to These Disadvantages of Dropshipping:
There is a solution to these dropshipping disadvantages. Shortly, the key is good customer services. More loyal customers plus fewer refund requests can be achieved by providing your customers with great customer services. Always try to be as polite and understanding as possible when you reply to a customer with questions or demands. You can also predict your customer’s problems by creating a FAQ page.
8. High Competition:
A very common reason why people fail their dropshipping store is a lack of uniqueness.
Most people learn things about dropshipping then go and start their dropshipping store.
For example, type in Google Trends “Dropshipping”.
Click here to go to Google Trends
You can easily notice how popular dropshipping is?
A lot of people are so interested to have a business in it because so many of these “gurus” advertised it as an easy way to earn money online. (Source).
The worst in the process is that most Dropshipper set up their dropshipping store without sparing any efforts and time. All that they do is limited to having a store, importing products, and start advertising without even give any effort in changing or testing.
You know! This means that a lot of people that are dropshipping are selling the same products with the same information they got from maybe even the same dropshipping suppliers. Of course, having the same product is not a bad thing yet, but to also have the same images, descriptions, and so on will not help you!
How You Can Solve This Disadvantage of Having a lot of Competition?
Simply, you have to be more unique, try to be better than them, and provide more customer services. Spare an effort, spend more time and work hard. Don’t forget that your dropshipping store is as well as any real business.
If you want to learn more about how to be unique and beat your dropshipping competition, then I suggest reading the two articles I linked to below:
This article is for you if you’re thinking now that there are only negative things to the dropshipping business model!
Because that’s not true, dropshipping has its advantages as will as disadvantages of dropshipping. For example, you can quickly test products without being stuck with a lot of inventory, you can sell to the whole world, and you don’t have that much startup costs.
So, you are informed about most of the disadvantages of dropshippping , besides the way how to solve them. I hope this will give you some newfound motivation to start or continue with your dropshipping store! If not, then I wish you the best with anything else that you’re going to do with your life!