Today we’re going to talk about some of the most common issues you might run into when using drop shippers, and some ways you can avoid them. While dropshipping isn’t an ideal business model, it is one of the best business models out there for people who have a limited budget to start their own
Today we’re going to talk about some of the most common issues you
might run into when using drop shippers, and some ways you can avoid
While dropshipping isn’t an ideal business model, it is one of the best business models out there for people who have a limited budget to start their own online store. If you have to choose between dropshipping and not opening your store, dropshipping is a no-brainer.
But like any business model, it can have some potential problems that
you could run into from time to time.
One problem you may run into difficulty finding a supplier for the
type of items you need at a price that can make you a profit.
See, drop shippers are usually NOT wholesalers. Even if they are, they
usually tack on a fee to each item sold via drop shipping to pay for
their costs in packing and shipping the item directly to your
customer. This means you can’t usually get the same kind of prices as
you would from a wholesaler.
Let’s say the most common retail cost of an item is $20. A wholesaler might charge $10 for that item. This would mean approximately $10 in profit for you. (Not counting overhead and other costs, of course.)
A drop shipper might charge $16 for that same item, which cuts your potential profit down from $10 to $4 per item. Once you factor in your other expenses, such as overhead and marketing, you might make very little profit at all.
You may also find that it’s difficult to deal with inventory control if the supplier you use doesn’t have an automated solution that connects with your shop and keeps track of how many of a particular item they have available.
If a customer orders an item and pays for it, and then you discover
your supplier has run out of the item and doesn’t know when more will
be in stock, you will have to deliver the bad news to your customer
and refund their money. This may upset them enough that they never buy
from you again.
Another problem you may run into is how to deal with returns, refunds,
and chargebacks. These can kill your business if they aren’t handled correctly, so we are going to devote a whole email to that later.
Now I’m going to give you a tip that will help you avoid most of the
common problems you could run into, as well as making it much, much
easier to resolve any issues you DO run into.
Choose the right drop shipper!
Sounds obvious, right? But too many people just use the first company
they run across or take recommendations blindly without doing any
research, or just look for the lowest price.