Why Dropshipping sucks

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Tourist
13 0 1

What are a few things that you guys hate about dropshipping?

Here are some of mine

  • No control over the photos, and creatives used to market. Since you don't have the physical good on hand, you are stuck with the pictures and assets provided by the dropshipper. Hopefully they aren't too bad. Some smaller ticket items should be attainable, but if I'm dropshipping washer and dryers, there isn't an easy way for me to take pictures of everyone's inventory
  • Multi-step purchases. When a customer orders from my site, the dropshippers usually make me log in to their site and place the order with them. Wouldn't it be magical if this was all automated?
  • Finding reliable dropshippers. You have to build a great relationship with these people so they handle your orders in a timely and professional manner. You'll save more time and money when your dropshipper is reliable and trustworthy. Build and strengthen relationships with them as much as possible. If you can, try to travel to their office and meet them in person before you start doing business. This can show them how serious you are.
  • Inventory isn't automated. Are there any real time solutions out there?

These are just a couple of my pain points. I'm sure you other people dropshipping have some too. Lets hear them!

If you haven't dropshipped before, what are some questions or concerns of yours?

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Excursionist
12 0 4

What are some viable alternatives to dropshipping and where might you find a reliable supplier?

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New Member
2 0 1

What are some viable alternatives to dropshipping and where might you find a reliable supplier?

I teach high profit margin importing as a viable alternative to low profit dropshipping. Despite the widely held myth that you have to place huge orders when buying from overseas manufacturers, it is possible to buy small quantities if you take the right approach.

An issue that has led to the "huge order" myth is that wholesalers tend to be very inflexible when it comes to Minimum Order Quantities (MOQs). What is not so widely known is that manufacturers are much more open to accepting small orders even though they also quote big MOQs.

The secret, apart from knowing how to persuade them to do this, is knowing how to find genuine manufacturers in the first place. This is not as easy as you might think. The B2B sourcing sites most commonly recommended on forums list vast numbers of suppliers as manufacturers, but in reality they are traders or wholesalers.

It is worth the effort, so do your research. I recommend a small number of safe sourcing sites to my students, but I don't publish them online for the simple reason that I won't throw people in the deep end without first teaching them to swim.

Buying overseas is amazingly easy when you know what you are doing, but I see lots of people doing very silly things as though they are buying from the local convenience store where they know the owner, This approach leads to many of the horror stories you read about people being scammed by overseas suppliers.

Profit margins when buying direct from real manufacturers can totally eclipse the little margins that are tolerated in dropshipping.

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Excursionist
12 0 4

So, even if I have with no experience except for designing ecommrce sites for clients I might be advised to not even bother with Dropshipping? 

Are there lists of suppliers or do I Google them directly?

Thanks!

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New Member
1 0 0

I have a list of verified suppliers, but as they say nothing is free

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Shopify Partner
26 0 2

Data+Design offers an alternative dropshipping program which addresses OP's concerns (except for the image aspect).

One of the most challenging aspects of dropshipping (especially for new stores without any reviews or existing customers) is that most mainstream manufacturers/brands control pricing with MAP. So, let's say that you actually sign up for a new account with a supplier and they provide you with their product data feed. In it you will most likely see a column for MAP (Minimum Advertised Pricing) which you agree not to sell below. And if a company has a dropship program in place, then really their goal is to sign up a large amount of resellers... otherwise they wouldn't mess with dropshipping in the first place. That means competition will be high if you are reselling products from a company which offers dropshipping.

For example, you are selling 'Brand XYZ' widget for $100 since this is their MAP. You then quickly discover that everyone else in 'Brand XYZ' s dropshipping program is also selling for $100, except for large companies like Wayfair or Amazon who negotiate special pricing and terms with 'Brand XYZ' which allows them to sell below MAP. Basically you get completely lost in the mix and if you are a new store then you have no reviews or anything to help drive customers. If you try to sell below MAP then you will likely get an email from 'Brand XYZ' letting you know that your account will be cancelled if you do not comply with MAP.

Sure, there are ways to sell products based on service, yada yada yada. The bottom line is that if you can't compete on price then in today's eCommerce world you are going to get beat down by more established online stores.

And yes, I know that there are always exceptions to the rule. Some dropshippers do not have MAP pricing, and others do have MAP but do not enforce it. In these situations though there are probably a handful of sellers on eBay who are making crazy slim margins. It is definitely a Catch 22.

The GOOD NEWS (shameless plug):

If you are dead set on drop shipping because you do not want to purchase inventory, there is a better way >>> http://vimeo.com/39499604

 

Danny Ward | Data+Design | Award Winning eCommerce Business Development | Shopify Expert
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