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Failure of Drop Shipping

What is dropshipping?

Dropshipping is a fulfillment order in which a company does not keep the products it sells in stock. Every time the order is received from the drop shipper, the seller sends it to another company that ships the product directly to consumers. Here, the  seller acts as an intermediary between the consumer and the company selling the product. 

This is a simplified approach. Selling products online and fulfilling your orders means you can run a business without having to rent storage space, juggle supply chains, or  manage inventory.

Ok, now let’s understand what  a dropshipper is:

A dropshipper acts as an intermediary  between customers and suppliers, where they select and promote the products that the suppliers send to customers. Retail businesses can operate exclusively as dropshippers or they can store some products themselves and drop ship them to  others.

What is drop shipping?

Failure of Drop Shipping
Failure of Drop Shipping

Truths About Drop Shipping

Low Profit Margins

These low profit margins are barely enough to cover your expenses and operational costs for marketing/advertising, maintaining your website, including search engine optimization (SEO), order management and coverage of  your office hours.

Very competitive

There will always be overly optimistic entrepreneurs who focus solely on the “low overhead” part and ignore the clear evidence above. Since very little capital is required to start a dropshipping business, this low barrier to entry means stiff competition, and the most popular marketplaces suffer more than others.

Basically, the larger a company is, the more it can reduce its margins in order to offer the lowest prices.

No control over the supply chain

In standard e-commerce, when customers complain about product quality, delivery speed, or return policies, you can resolve the issues yourself.

With dropshipping, store owners are more or less at the mercy of the supplier, but you are the one who still has to speak directly to your customers.

Questions of legal liability.

Although this is not a common problem for dropshippers, it is worth mentioning. Some suppliers are not as reputable as they claim and it is not always known where the goods come from.

It is even more insidious when suppliers illegally use another company's brand logo or  intellectual property, which occurs more than average.

Critical Problem of  failure These are some of the major obstacles to drop shipping success.

Poor Marketing

Targeting the Wrong Niche

Lack of Patience

Poor Conversion Rate Optimization

Poor Supplier Selection

Business Processes

Drop shipping is booming thanks to the rise of e-commerce, but sellers can do it on any of your dropshipper's channels . In the 20th century, catalog brands like JCPenney and Sears used a form of drop shipping by routing mail order orders directly to manufacturers for faster delivery. Today, retailers with limited physical  space or pop-up sellers can display samples and fulfill orders via drop shipping.

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