Why do drop-shipping businesses fail?

Do you know that almost 90 percent of dropshippers fail during their first month after getting frustrated that their business is not making enough money?

Why do dropshipping business fail?

Most dropshippers are emotional. They are inexperienced and don’t have the risk-taking ability. They get excited seeing that someone else is making money online so they should too. And then they start their own store without testing or even doing a feasibility study. When in the first few months, they don’t get profits, they realize the whole business idea isn’t for them. So, they drop it and move to something else complaining that dropshipping doesn’t work for anyone, generalizing their own assumptions.

Here’s a list of my most encountered reasons why drop shipping businesses fail:

  • Lack of Patience – most of the first timers fail because they don’t have enough patience. Patience to learn eCommerce, patience to do enough testing on various paid advertisement channels before making a first sale, patience & persistence as a whole.
  • You have to put in money to earn money – understanding that it takes time & resources to making your first sale. Especially, if you’re relying on paid advertisement (Facebook) as your main source of traffic. First R1000 will be spent on tests, failure and gathering data. If you don’t give up too quickly and have a right mindset to it, you will learn invaluable lessons and crack the code eventually.
  • Marketing – You lack the necessary marketing strategies to give your store and listings an edge over others. This may be a lot of work but this is important for your drop shipping business.
  • Not knowing your target audience – you can’t just advertise to anyone. You will spend too much money sending people to your website just to realise that it was not a quality traffic which doesn’t generate any or enough conversions.
  • Relying on the champion product(s) only – This happens quite often. You start making sales, you’re onto something, but you have just one or two champion products that are making your ends meet. You don’t do any tests to discover new products that convert, and eventually, you stop making sales at all.
  • Unreliable supplier(s) – You may have partnered with Unreliable suppliers. This too is bad for your business. Remember, you don’t personally handle and deliver the products to your clients, your supplier does. But any delays, mishandling of products, and poor quality of products will be on you since the transaction was between you/your shop and the customer.

These are just a few most common reasons why dropshipping businesses fail. I’ve been dealing with most of these myself on numerous occasions. However, it all comes down to being patient. No matter what happens – if you’re persistent enough you will break through eventually and generate profit on a daily basis.