Anyone who ever wanted to be an entrepreneur or looked into how people make money online. Must have come across a term Dropshipping.

But, a very few understand how it works.

If you are new to this term or have some basic idea or if you want to make money online with drop shipping this is the perfect in-depth guide for you which will explain:

How dropshipping works, why 90% of dropshipping store fails and what makes a dropshipping store successful, how crucial is it to find the right product, supplier, and how to differentiate your store from millions of other dropshipping stores out there.

We will dive In but first:

Who am I ?

You might be wondering who is this guy, why should I even trust him and what qualifies him to speak on such a big topic?

Hi, My name is Kartik, and I am a 6-figure drop shipper from India.

I am in this dropshipping space for almost three years now and build multiple successful 6 figure stores already.

So, I do this for a living and know ins and out of this industry.

So be sure by reading this you will be more qualified than 90% of the people in dropshipping space; thus, saving you from tons of upcoming headache and guarantee your chances of success in this space.

So let’s dive in

What is Drop shipping, How drop shipping works ?

What Is Dropshipping

It’s a secret to quick money in minimum amount of time working from your home on your terms.

Right? *Naa . . . Not Exactly*

( that’s what most so-called guru’s in this space will tell you )

As Wikipedia explains it

Dropshipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers the customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the products directly to the customer.

B a a h . . .

What I think of it is, You find products from AliExpress (kind of like amazon), you list it on your drop shipping store (in-depth on how to make a store later) when someone buys it from you then, you order it from AliExpress and mention the customer address there.

Bam. . ! you bought the product for $4 from AliExpress sold for $12, and after promotion, you made a good profit.

Multiply that by 100, 500 or even 1000, and that’s how you make money with drop shipping.

Every business in the existence of this humankind have a pro’s and a con’s

Same goes with the dropshipping business model there are many pro’s and con’s to it

Pro’s of drop shipping

Low barrier to entry a.k.a easy to start

Unlike any other e-commerce business, you don’t need tons of people working countless hours a day every day.

You only need a laptop an internet connection and a desire

Which will help you setting up your business

If you are new to ecommerce, this will be the easiest to understand and implement.

Less capital required

You don’t need to spend tens of thousands of dollars upfront in inventory and overheads.

As I mentioned earlier, you only need an internet connection and a laptop

With drop shipping, You don’t have to purchase any product upfront. You buy the product only after you get paid by the customer.

Work on your terms

 Dropshipping provides a lot of flexibility. . .

It requires no office, no inventory, no overhead, no warehouse you could be sitting on a beach relaxing and still make a big profit.

Lot of variety

 With drop shipping, you are not stuck with a massive inventory of the trend which worked a year ago

As the trend changes, you can change the product as well.

More resources as well as Time to scale

In retail, if you want more profit you will need more employs, more working hours, and more inventory as well

But . . . With drop shipping, all your orders are fulfilled by the supplier you don’t have to do anything after the sale is made.

The time consuming activity is eliminated for all.

If I have to explain to you all the advantages it would take me a few more articles to write to them, the above mentioned are the most important and are only the tip of an iceberg.

Disadvantages of Dropshipping

As any other business dropshipping also have its own disadvantages

And Here . . . . . Comes the dark side . . . . The side which so-called gurus hide from you . . . The side which makes you think

Is it even worth starting drop shipping? 

As it would be fair for me to tell you some of the dark sides I have experienced in this space.

Low barrier to entry 

Huh… You might be wondering this was the same thing mentioned in the pros

Yes, you are correct, but because of the low barrier to entry, there are millions of people in this space. Thus, leading to red ocean a.k.a a very intense competition.

More competition = Expensive Ads = Low Profit

 So, to survive in this oversaturated market, you will have to know things which other 90% don’t. ( I will tell you all of this later in the upcoming blog)

Remember, no matter how hard the competition is the fittest always survives. There are still people making millions with drop shipping.

Slightly Lower Margins

Business is a game of margins, and if you want to survive you must have to outcompete your competitor

But . . .

In the case of dropshipping, you and 100d’s of others are buying from the same source i.e., AiExpress. After all your business expenses, you are left with a minimal profit margin.

 I have a proven secret method which I used myself to outcompete my competition every time. ( stay tuned )

Managing Inventory Can be Tricky

You might be like Kartik, are you crazy? You just told that we don’t have to manage inventory

Yes, I understand we don’t have to manage inventory, but someone has to right? The supplier here is the one who maintains inventory.

Because it’s a 3rd party, there is little to no chances for you to know how much inventory the supplier currently have.

This can also be eliminated by having a good relationship with the supplier which 90% of the other drop shippers don’t bother to do this extra step.

Branding and Complexities

Customer satisfaction is always often related to packaging, freebies, notes, etc.

Small things do count

Unfortunately with drop shipping because you are sourcing the product from a supplier they most of the time have little to no branding on the boxes.

On top of that, if your customer ordered multiple products from your store, they are more likely to receive different packages as you source the product from various suppliers on AliExpress.

So, it’s not good for your long term brand.

Top 7 reasons why 90% of the dropshipping store fail

Why-dropshipping-store-fail

Because they are inexperienced. Yes, I said it.

They see someone else making money with this business, and they dive in without understanding the market.

( As you are reading this you are not one of these, you tried to research first hats off to you )

After knowing the most common mistakes made by a drop shipper, you will be more careful and can avoid them as a whole.

Because learning from someone else, mistakes are always better.

Let me tell you what 90% do in this business which you should never do.

No Niche or Product research

What most people do is they go on AliExpress find some random product and start advertising without any research.

There are few renowned blogs which will tell you in-depth on what niche you should pick and why it is open to everyone and it’s Free. But still, most drop shippers don’t make this extra effort.

Thus, leading their way to failure.

Lack of Patience and persistence

Because most gurus in this space make it look like a get rich quick scheme, the people who step into this niche are highly impatient.

And expect results from day1. Which is very unlikely to occur

Patience and persistence are not only required in dropshipping but for any business. And, if you are starting with drop shipping, then it is a prerequisite.

Poor funnel and store design

The bad store design is a common reason for the store’s not converting website visitors into customers. Thus, leading the lower than average conversion rate.

With this bloodshed competition in drop shipping, your store design is the only thing . . . That will make your store unique and trustworthy.

Gone are the days of Countdown Timers, fake scarcity, random reviews etc.

The poor layout is also a big factor imagine customer seeing shoes in t-shirt category. Yes, this happens a lot and is very common.

Missing legal pages and no shipping instruction can also lead to future chargebacks.

What will happen if a store is designed by someone with no designing knowledge

And the most common so-called

Rainbow store . . . Are formed

What is the rainbow store? This is a special kind of store that has every possible colour present in its store design.

Imagine a random colour logo with a random background.

What do you think the visitor will trust and buy from these kinds of stores?

Store owner wastes tons of precious time on something that can be done really quickly by a professional

What’s even sadder, the results of this independent design are often not also worth the time spent. Technical requirements on the file size, format and resolution are ignored, so the quality and readability of the images get too low. So, are all the efforts worth it?

Unedited Product Description and wrong targeting

Everyone wants to make money quick right?

Because of which a lot of stores don’t put an extra effort in editing and writing a custom product description that compels visitor into a sale.

Even in 2019, you will still see many stores using the same description, which is imported as a default when importing a product from AliExpress.

An in-depth guide on how to write a product description later in the future.

A client of mine started a dropshipping store with a clothing line and targeted the USA and the result . . .

Crickets* No even a single sale. After being depressed for a while and after a consulting session I convinced him to target other big markets

And the result ? . . . . Sales won’t stop; he sold his entire line within a week.

Bad Customer Support

Another big reason why most dropshipping stores fail is they…

Focus so much on the money and sale that they forget the customer itself.

What’s. the point right? The sale is now made who cares what the customer thinks right.

Wrong . .

Excellent customer service can save you from all the possible chargebacks, Facebook penalty and on top of that if you have good customer service the customer will come back on your store to buy more

Free money and who doesn’t love free money, right?

Fake reviews and suspicious discounts

This is also the most common problem seen in a lot of drop shipping stores

Lets first talk about fake reviews,

Ideally, when you import reviews from AliExpress, they are random 2 – 3 words reviews which are very suspicious and also looks fake.

I recommend you writing your own reviews and getting reviews from your past customers as well.

Because your visitor can easily differentiate between a fake review.

And the second is suspicious discounts.

Discounts are a good strategy and have been used from decades. . . To generate more sales

But, most drop shippers take it to the extreme. Giving a 50% discount is good but giving a price tag to the product more than its perceived value is suspicious

Not replying to customers on social media

Whenever you run an ad on any social media platform, it gets engagement, and people usually ask for more information

Most drop shippers don’t bother to even reply to these comments.

Your potential customers have some real questions before buying the product.

If you address these questions and concerns then and there in comments you have more chances of making a sale.

At the same time more the engagement, your post has cheaper your advertisement cost becomes.

These are a few common reasons why most of the dropshipping store fail.

So, Is it even worth starting Dropshipping?

 As I mentioned earlier, it is not a get rich quick scheme, and dropshipping is not perfect.

It is complicated. The model has some advantages and disadvantages like any other business model

So what’s my take?

Yes, with some planning, you can quickly eliminate most of the disadvantages that drop shipping has. The possibilities are endless with drop shipping.

I have seen multiple rags to riches stories within drop shipping space.

Competition should not bother you if you are good enough.

And I promise you in future I will bring more in-depth step by step guide on how to overcome these problems and succeed within this space.

Conclusion & Points to remember

What is Drop shipping, How drop shipping works ?

Dropshipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers the customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the products directly to the customer.

What are the Disadvantages of Dropshipping?

Low barrier to entry, Low margins, managing inventory can be tricky, branding and Complexities,

What are the Advantages of Dropshipping?

Low barrier to entry a.k.a easy to start, less capital required, work on your own terms, lot of variety, more resources and time to scale,

Why 90% of dropshippers fail?

No doing niche or product research, Lack of Patience and persistence, Poor funnel and store design, unedited Product Description and wrong targeting, bad Customer Support, fake reviews and suspicious discounts. These are a few common reasons why most of the dropshipping store fail.

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