In
spite of dropshipping advantages for beginners and small merchants, also there
are some disadvantages that must be taken into consideration before starting in
dropshipping business.
LOW MARGINS
The biggest disadvantage to operating in
a highly competitive dropshipping niche is the low margin. It's so easy to get
started and the overhead costs are so small ,many merchants will set up shop
and sell items at rock-bottom prices in an attempt to grow revenue. They've
invested so little in getting the business started so they can afford to
operate on minuscule margins. But, you can do a lot to mitigate this problem by
selecting a niche
that's well suited for dropshipping.
INVENTORY ISSUES
When you're sourcing
from multiple warehouses, which are fulfilling orders for other merchants, inventory
changes on a daily basis. While there are ways you can better sync your store's
inventory with your suppliers', these solutions don't always work seamlessly,
and suppliers don't always support the technology required.
SHIPPING COMPLEXITIES
If you work with
multiple suppliers – as most dropshippers do – the products on your website will
be sourced through a number of different drop shippers. This complicates your
shipping costs. For instance, if your customer places an order for two or three
items, all of which are available only from separate suppliers. You'll incur two
or three separate shipping charges for sending each item to the customer, but
it's probably not wise to pass this charge along to the customer, as they'll
think you're grossly overcharging for shipping! And even if you did want to
pass these charges along, automating these calculations can be difficult.
SUPPLIER ERRORS
You may blamed for
something that wasn't your fault and you have to accept responsibility for the
mistake anyway!
Even the best
dropshipping suppliers make mistakes fulfilling orders – mistakes
for which you have
to take responsibility and apologize. And mediocre and low quality
suppliers will cause
endless frustration with missing items, botched shipments and low-quality
packing, which can damage your business's reputation.
Finally, don't worry
about the above problems, with careful planning, most of these problems can be
resolved and doesn't prevent you from beginning a profitable dropshipping
business.
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