The very setup that makes dropshipping so attractive - the fact that you do not need to hold inventory or handle shipping is what makes it so challenging when it comes to keeping up with customer expectations.
It is awesome and crazy at the same time just how easy it is to launch your own business online in 2019. Dropshipping has made it possible for merchants to run 6, 7 or even 8 figure ecommerce businesses without having to store inventory, pay for products up-front, or ship a single package themselves. So it is not a surprise that the number of ecommerce entrepreneurs who don’t touch, see or handle the goods they sell is growing rapidly.
Every year, thousands of hopeful entrepreneurs venture into the world of e-commerce. On Shopify there are over 600,000 active stores that sell over $82 billion worth of goods and services.
But as many aspiring dropshippers had to learn the hard way - managing a successful ecommerce business is anything but easy. In fact, only a small percent of dropshipping stores are successful in the long term. While dropshipping may be a lot easier to launch than other types of business, getting sales, growing the business and keeping your customers happy is anything but simple.
Why do so many dropshipping businesses fail?
Competition, increasing advertising costs and rising customer expectations are all difficult challenges to overcome. Studies have shown that 90% of online businesses fail within the first 120 days of launching the operations. Other sources, put this number as high as 98%! This is a pretty scary statistic, isn’t it?
If you have a brand new online store, or are thinking of starting one, you will do everything in your power to be among the top 1% of ecommerce entrepreneurs that finds long-term success. What can you do to keep the odds in your favor?
If there was one advice for young entrepreneurs that I could give it would be this one - put your customers first.
The old and ineffective drop shipping model
While dropshipping makes it possible to manage your entire business from the comfort of your home, there are just so many things out of your control!
The exact setup that makes dropshipping so attractive - the fact that you do not need to hold inventory or handle shipping is what makes it so challenging when it comes to keeping up with customer expectations.
Even if you don’t handle the product, if there are problems with delays, damaged goods, or absolutely anything else, you are the one your customer will turn to, expecting you resolve the issue as soon as possible. You are the one who has to deal with angry customers - not your manufacturer.
So when it comes to customer happiness, a lot of dropshippers are struggling to keep up with ever-growing customer expectations. Dropshippers often struggle with product related issues, such as:
As the popularity of online shopping grows, you can not afford to run a business that disregards customers. Low-quality goods, long delivery times and nonexistent customer service will quickly drive your business out of the game. But how are you supposed to address these issues when you don’t have anything to do with the product?
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