Avoid These 7 Dropshipping Mistakes
Updated: Oct 4, 2019
Everyone knows dropshipping is a lucrative and is considered one of the lowest entry barrier to start your own business. Just simply open up a Shopify store, source for some products in AliExpress, list them onto your product page, launch a few Facebook Ads and hoping one of them is a winning product (do read my post here to identify 5 key elements of a winning product).
When it comes to dropshipping, many new, and even experienced dropshippers make this SEVEN big dropshipping mistake. They are by far, the most fatal mistakes that I have ever come across.
And with dropshipping, you can only go so far by ignoring it — before you find yourself falling into a pit of inferno (as well as your bank account).
Luckily, these 7 mistakes can be easily reversed or avoided when you are aware of them.
That is why I have decided to take some time off my schedule and write this article to share with all of you. After reading this article, you will know how to avoid these mistakes and grow your dropshipping store to heights that you can ever imagine.
Mistake #1: Selling Trademarked Goods
When starting a Shopify Dropshipping store, the first thing you are looking for is what kind of service or value that you are intending to offer to your potential buyers (90% of the time it will eventually lead to a niche store). And what is better than a fan base of our ever favorite Marvel Heroes?
Honestly, that was the first thing that lead into many people's head. A popular TV show or a movie with a massive following. Trust me, I am also guilty of that (haha).
Let's take the ever-popular Ironman from Marvel as an example.
Well, it is true that selling Ironman products to Ironman's fans would make a marketer's life so easy. Think about it, it is easy to target them when it comes to marketing and they are already irrationally passionate.
This is a very, very costly mistake.
On the surface, it might seem very lucrative and a no-brainer to do this. However, you have to understand that there are trademarks and copyrights that do not allow you to do it.
The worst thing is that some people do this without realizing that they are infringing on trademarks or copyrights.
There are people who just close their stores if they get caught and no one pursues them, these are the lucky ones. But there are also people that get sued for millions of dollars.
And especially when you are dealing with companies such as World Triathlon Corporation(the company who owns Ironman−related trademarks) who has deep-pockets, it is especially unwise to get involved with them in a lawsuit.
So before you create your shopify dropshipping store and put products in it, make sure that you are not infringing on any trademarks or copyrights.
And it is also the reason why this is listed as the number 1 hot seat.
Mistake #2: Not Building a Brand
This is the number 1 priority every dropshippers must have if you want to build long-term success with your shopify dropshipping store.
End of the day, like any other business, a dropshipping store is still a business. You got to treat your dropshipping store like a real business. Your brand is what ultimately turns a new customer into a repeat customer; one that is willing to return back to your store, simply because of the amazing value that you provide.
Building a brand earns your customer’s trust; the biggest deciding factor of whether or not they end up clicking “Buy.”
Remember this: "Provide Value First, Before You Earn Your Customer's Money."
Ignoring your brand will limit your ability to market new products to your customers since they won’t have any trust built in you in the first place. They only bought your item based on their initial emotion, not because they LOVE your brand.
In other words, your dropshipping store is a ‘one-off’ business. Your store only relies on new customers to survive, as you do not care enough to nurture your existing ones.
Look at some of the existing successful business that you know of. If they did not focus on their brand in the first place, how would you even knew of their existence?
In the upcoming weeks, I will be writing an article about brand building and how you should effectively build a strong brand around your dropshipping store.
Mistake #3: Bad Customer Support
This applies to every other business, not only dropshipping business. Ignoring or just doing a lousy work when it comes to customer support is one of the fastest ways to kill your own business.
Well the thing is, no one likes to deal with customer support. Talking with frustrated customers is probably one of the sucky things you could ever encounter in your business career.
Well, customer service is actually one of the most important things if you want to succeed with your shopify dropshipping store.
Successful shopify dropshipping stores strive on returning customers via email marketing. Returning customers is an absolute goldmine.
If you do not take care of your customer support, you will lose out on clients and their recurring sales.
Alright I get it, there is no deny that you hate to do customer service support. Well believe me, I do hate as well. So one simple solution is to hire a Virtual Assistant to do it for you.
I personally recommend onlinejobs.ph. They offer really cheap rates as low as couple of dollars per hour. And trust me, it will definitely pay off with the extra sales you will get.
Mistake #4: Forgetting About Your Previous Customers
This applies more for the newbies. As mentioned previously in mistake #2 and #3, most newbies assume getting new customers is what they should be focusing on to make money in their store.
The truth is, the real money that comes from your dropshipping store is actually from your email list.
Ask yourself: Would it be easier to make a sale from a new customer, or a customer who has already purchased from your store before?
Well, the obvious answer is the latter. Why? You’ve already earned their trust! After all, they purchased from you before — what’s to say they won’t purchase from you again? (unless they had a bad experience in your store) (see mistake #3)
And what’s even crazier is, these customers are free! Yes, remarketing does not cost you anything, as compared to acquiring a new customer which requires a lot of advertising. All you need to do is to simply send an email blast and that's it!
Repeat customers are your actual goldmine in the long-term, and it is a must if you are running a dropshipping store. Remember, they are in your email list where you can promote other items to them from your store.
Don’t make the mistake of prioritizing trying to get new customers. Instead, focus on leveraging on your existing customers you already have in your email list by promoting other products they might have interest in purchasing.
It may sounds funny but many newbies generate sales from their new customers via Facebook or Google Ads and they just give up completely when they realised that after a month they are still in the red or at best, breaking even.
Mistake #5: Failure To Research On Your Suppliers
This is one of those shopify dropshipping mistakes that many people do not pay a lot of attention to, even for seasoned dropshippers.
You find a product in AliExpress that fits well with your shopify store and perhaps even already has a lot of sales potential and you just jump on it.
Well, the problem is a lot of people just do that without checking if the supplier who is providing that product is reliable.
Classic multiple horror stories of people all the time, making hundred and even thousands of sales and realizing a few weeks later that none of their items were actually shipped out.
So what happens then, you are stuck with thousands of complains and refund requests that can get you bankrupt overnight.
Even if your suppliers do send out the items, some of them send out the items really late or some just sell really poor quality items.
This is a huge Shopify Dropshipping mistake, as you will lose out on the trust of your customers with low-quality products and will need to fulfill a bunch of refund requests.
A simple way to avoid this problem this is to simply check on the ratings and the reviews of the supplier that you are sourcing.
Note: If you are using AliExpress, they had changed their approach of assessing the quality of their sellers since the start of 2018. Therefore the rating of diamonds, crowns etc. has been taken away and been replaced with a little emblem against the sellers store name, identifying the store as 'Top Brand'.
Another good way is to simply check on whether how long they had operated in AliExpress. Do not forget about the "Detailed seller ratings" and "Feedback History". These are good indicators to check for red flags whether is the seller reliable or not.
Mistake #6: Not Offering Upsells & Cross-sells To Your Customers
Upsells and Cross-sells are so important that not utilising them will have a major impact on your store’s ability to scale to five to six figures. Why? Because in dropshipping, front-end items usually only tend to break-even; one sale would only be enough to cover both the cost of ads and the product itself.
Allow me to explain. Say you launch a Facebook Ad with a budget of $5 per day. Well, you manage to generate a sale from your Cat Necklace product at a retail price of $9.97. Below are the illustration for example:
Cat Necklace: $10.00
Cat Necklace Initial Cost: -$5.00
Facebook Ad: -$5.00
Note that I just made the figures up, but I will just provide you a realistic figure. At least you will understand what is going on. So after factoring in your Facebook Ad cost and your Cat Necklace initial cost:
$10.00 - $5.00 - $5.00 = $0
As you can see, you are just breaking even. So one simple solution to further increase your profit margin is to offer upsell or cross-sell. So let's say if you cross-sell a Cat Bracelet at a retail price of $10. That will be:
Cat Necklace: $10.00
Cat Bracelet: $10.00
Cat Necklace Initial Cost: -$5.00
Cat Bracelet Initial Cost: -$3.00
Facebook Ad: -$5.00
Hence, it will be: $10.00 + $10.00 - $5.00 - $3.00 - $5.00 = $7.00
As you can see, if you didn’t cross-sell a customer to additional items, you are just simply breaking even, or your profit would be end up being very tiny at best.
But imagine adding a $10.00 cross-sell to the equation. Can you suddenly see how your profit margins shoot right up?
The best part is, upsells and cross-sells are essentially "free" — you don’t have to spend any money on ads to promote them! And with the profit you earn from this sale, you can use it to scale your store at the much faster rate.
Think about some of the related additional products that you can re-market to your previous customers to get them to buy more. This is what separates 5-figure stores from 6-figure and even 7-figure stores.
Mistake #7: Misleading Shipping Times
Allow me to warn you ahead of time — this tiny little mistake many dropshippers tend to overlook or ignore can get your shopify dropshipping store completely closed.
First of all, a lot of people do not put any shipping times at all as they are afraid that it will discourage customers from purchasing.
I understand, dealing with shipping times can be quite complicated in nature. From your suppliers reliability to shipping logistics uncertainties etc.
Well, the truth is — having the shipping time will somewhat influence your conversion rates as much as you may not be aware of.
Put yourself in the customer's shoes. Would you buy a product from a store that you had completely no idea when it will arrive in the first place?
Many dropshippers wanted to get around this by putting misleading shipping times. Just to making them shorter.
This is probably even worse than not having them at all.
On the other hand, if you do not have shipping times as stated — not only it will affect your conversion rates, but those who purchased from you will start emailing you that they have not received their products yet.
In the worst case scenario, if you receive a high amount of refund requests, some payment gateways can ban your account and your shopify dropshipping business can get completely ruined.
Well, all hope is not lost as I had a solution to this issue to get around the shipping times to make your life a lot more easier. I will reveal it out in a few weeks time. Do stay tuned to my updates closer to the week.
I hope you found these 7 Shopify Dropshipping mistakes useful. There are many more out there, but above listed are the more common ones, so let me know if you would like me to cover more of them.
That being said do not be afraid to make mistakes. I can upfront be honest with you that you are going to make a tons of mistakes along the way, but just make sure to learn from them. I hope that my article would be of a great help to reduce the potential mistakes that you are going to face head-on.