{"id":12104,"date":"2018-09-06T11:36:22","date_gmt":"2018-09-06T10:36:22","guid":{"rendered":"http:\/\/www.repricerexpress.com\/?p=12104"},"modified":"2020-09-24T12:23:21","modified_gmt":"2020-09-24T11:23:21","slug":"pitfalls-drop-shipping","status":"publish","type":"post","link":"https:\/\/www.repricerexpress.com\/pitfalls-drop-shipping\/","title":{"rendered":"The Pitfalls of Drop Shipping and How to Survive Them"},"content":{"rendered":"

Although many ecommerce entrepreneurs see dropshipping as an uncomplicated way to get rich without doing or investing much, it’s not always the case. There\u2019s plenty of competition for your customers as well as the margins and revenue from the products you sell.<\/strong><\/p>\n

You can earn a living drop shipping, even a good one, but that requires you to dig in, learn what to avoid, and get started on a path to growth. Ultimately, you want to use drop shipping as a way to build a brand and a big business.<\/p>\n

Getting started on that path is rocky, but the dangers aren\u2019t all bad. Here are a few thoughts on the challenges you\u2019ll face and how to get past them to find yourself with a successful store.<\/p>\n

Be Smart About Margins<\/h2>\n

The biggest argument against dropshipping<\/a> business models is often that you\u2019re competing almost solely on price. While it\u2019s true that your margins are the chief driver of business, the conversation around price is more nuanced.<\/p>\n

Margins are tight often because it can cost a wholesaler a significant amount to give you a drop shipping option. Wholesalers are taking on the storage, protection, insurance, pick, pack, and shipping costs. Wholesalers are already working on small margins and need to do high-volume business to earn well, so there isn\u2019t much room for you to add your margin on top, in most cases.<\/p>\n

Margins are also thin because, for the most part, your competition can be nearly unlimited. Wholesalers almost always work with a variety of customers and the ecommerce world is shrinking. Not only are you competing against other sellers on your same platform, but plenty of people start their shopping experience with Amazon, eBay, and others.<\/p>\n

4 Ways to Maximise Your Margins<\/h2>\n

The good news is that there are some product tweaks you can consider to either avoid the tightness of all margins or increase your potential sales volume to improve revenue:<\/p>\n

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  1. Focus on a selection of products that aren\u2019t duplicated everywhere else. This will require a lot of phone calls and web research, but you might be able to find a wholesaler who is willing to provide something slightly different than what your competitor offers. For example, you could specialize in jewellery for people who have allergies to some metals. This niche doesn\u2019t want to risk buying a necklace from a company who sells some safe and some dangerous products.<\/li>\n
  2. Do your homework and seek out products with the highest margin potential. These often in the areas of pets and electronics<\/a>, like Bluetooth speakers and pet water bottles or brushes. Even if you have a lot of competitors, marketing that generates sales will give you greater returns.<\/li>\n
  3. Seek out items that minimize the costs of your wholesalers, such as those that are easy to package, don\u2019t require a lot of filler inside the box, and items that are commonly in-stock. The easier it is to ship for them, the lower your costs.<\/li>\n
  4. Review your sales after a month or so and then look for niche options. Dog-shaped Bluetooth speakers \u2014 \u2018nuff said.<\/li>\n<\/ol>\n

    What it boils down to is seeking goods where you can charge higher prices, looking for areas where you can reduce your costs and those of your supplier, and compensating with volume.<\/p>\n

    Everyone\u2019s a Competitor<\/h2>\n

    We touched briefly on this above, but there are some other factors about the competition you\u2019ll want to consider. Chief among them is that there are thousands of competitors today, and the list of thousands tomorrow will be drastically different.<\/p>\n

    Most e-commerce businesses, and most businesses in general, fail. The problem with businesses that use drop shipping is that nearly anyone can set up a store and start filling orders in a matter of hours. Everyone here can access roughly the same set of products<\/a>.<\/p>\n

    It gets crowded fast.<\/p>\n

    The way for you to stand out is to go above and beyond and become the better store for reasons that aren\u2019t purely about your products. You need to give your customers a bit of extra value, and if it\u2019s free to them, that\u2019s even better.<\/p>\n

    Here are a few things to consider:<\/p>\n