You're probably here because you found the word 'dropshipping' somewhere on the internet and now you want to know if it's really that good, right?
Well, no worries! I will give you an honest look below at all the pros and cons of dropshipping. I won't leave any stone unturned!
I will not only be honest about the business model, but I will also show you a few tips at the end to deal with the cons of dropshipping; but first, what is dropshipping?
What is Dropshipping?
Let’s start by understanding what starting a dropshipping business means. If you already understand it, then you can click here to scroll down!
If not, then I will explain the dropshipping business model really simple to you:
- Dropshipping is an online business model where you got an online store where you sell products, but you don’t have any of them in your storage or your house.
- When someone places an order on your dropshipping store, then you place that same order directly with your dropshipping supplier. Don’t worry. There are a lot of apps out there that help you with automating this part of the order fulfillment. For example, DSers, or these 14 DSers alternatives.
- Then your dropshipping supplier will handle the rest. Think about preparing the package and sending the order straight to your customer.
- Now your customer will receive the package straight from your dropshipping supplier, and you never touched the product in between!
To make it even more clear, here is an infographic of ours that does a great job of explaining the concept of dropshipping:
If you’re interested in learning more about dropshipping, then I suggest reading the article I linked to below:
Dropshipping for Beginners: What Is It & How to Start Today?
Now that you know the basics of this business model let's begin seeing the pros of dropshipping:
What are the Pros of Dropshipping?
Dropshipping is great, but what makes it so great? Let's find out!
1. Quickly test products without buying in bulk (No inventory)
Let's start with the first pro of dropshipping; you can quickly test and sell new products without buying them in bulk.
For people that are not sure what buying in bulk is, this is for you:
Buying in bulk means that you purchase a lot of the same product at the same time instead of purchasing one at the time with dropshipping.
This means that you will need to find a place to store your products. Which has its own advantages, don't get me wrong! But the thing that I'm pointing at is that if you're not sure if you can sell the product or if you're not sure if your target audience will like the product, then you could be stuck with tons of products that you can't sell.
The advantage of dropshipping is that you don't have to purchase hundreds or thousands of the same product before you can sell them in your online store.
You can literally purchase them one by one. This means that you only pay for products when someone places an order on your online store! Isn't that nice?
Yes, that has its own disadvantage as well (which you will learn below), but the nice thing now is that you can see if you can sell the product before committing to a huge bulk order.
If you can't sell the product, then you can easily move on to new products without worrying about having any leftover stock in your warehouse or home (wherever you store the products).
Now the big thing you need to remember here is that you need to know when to stop dropshipping.
Look, if your product is selling well, and you know you found a market to sell your product to, then it's awesome to purchase your product in bulk. This has its own advantages, which I won't go over now, but you can read this article here if you're interested in learning more.
Plus, I suggest reading How To Quickly Test Products With Dropshipping before you move on to selling new products in your store.
2. Not much startup costs in comparison to retail stores
This one flows in really well with the one above that you don't need to purchase bulk in order to start selling products in your online store.
Look, it's really cheap to start a dropshipping store mainly because of that reason; you don't need to own the inventory! This also saves you in other things like warehouse fees.
If you're unsure what kind of costs you will have when starting a dropshipping business, then I highly suggest you read our other article here as well, which goes over all the costs of starting a dropshipping business.
But do keep in mind, as I said above, that it's still a real business and not a way to get rich tomorrow!
However, those startup costs are in comparison to normal ecommerce stores that have their own inventory.
But what about the costs in comparison to starting a real offline retail store?
For that, I suggest reading this great article by Cardconnect, which lays out all the costs you will have when starting a retail store.
As you can see, the costs are significantly higher than running a dropshipping store or even a normal ecommerce store. Although once again, each option has its own benefits.
One example I can give you is that if you want to open a dropshipping store or ecommerce store online, then you don't have to pay rent, but you do need to have some way to open your business—something like Shopify, which only charges you $39 per month on their lowest plan.
That's a lot of difference between the rent of a retail store, right?
3. You don't have to produce, store, and send the products
The great thing about dropshipping is that your dropshipping supplier handles everything! They take care of the shipping, storing, and manufacturing of the product.
This means that all you have to do is take care of the marketing of the product and your dropshipping supplier handles the rest. Awesome, right?
But of course, that has a disadvantage as well; you can't see the product, so there could be issues with the product quality. (More about that below)
This also means that you can easily add new products to your store without having to worry about where to store them.
4. Learn useful skills
As I said above, dropshipping is just a fulfillment method.
The rest of ecommerce doesn’t change. You’ll still be learning skills like:
- Digital marketing
- Copywriting
- Conversion optimization
- Social media management
And, of course, much more!
These skills will come in handy, even if you don’t decide to continue with your dropshipping store in the end.
5. You can open a dropshipping store really fast
A lot of people are starting with dropshipping because it’s so easy to open a dropshipping store and start selling that same day.
But why is it easy?
Well, for example, if you compare it to opening a normal “offline” retail store, then you’re looking at an investment that you need to make before opening the store. (As you read above).
With dropshipping, you only pay for products when someone places an order on your online store!
And not only the investment in money is different. For the time, it’s the same.
You can literally open a Shopify store in a few minutes and have everything set up in maybe a few hours!
But don’t worry.
I won’t teach you to do the same as that.
It’s better to take your time when building your dropshipping store to be more unique than all the other dropshippers out there who do open their dropshipping store in a few hours!
If you’re interested in learning how to be more unique, then I suggest reading this article of mine here.
6. Highly scalable
You can literally sell to the whole world if you want to.
Do you know why?
Well, because your dropshipping supplier can ship to anywhere in the world without you needing to worry at all, but do check with your supplier before you want to start advertising in a new country! There could still be a small chance that your supplier doesn’t ship there.
Plus, you can find local dropshipping suppliers in each country, for example, in the US. This will have benefits on its own as well, like faster shipping times. (You can find more reasons to start dropshipping from local dropshipping suppliers here)
Because if you ship from China, then the shipping times might be 2-4 weeks in total! (Source)
If you're wondering now which countries you should target as a dropshipper, then take a look at this article here. Which goes over the best and worst countries you can target when dropshipping.
Another benefit of dropshipping that fits well with the highly scalable one is that you can turn your store into a brand!
Or you can start a branded dropshipping store from the beginning already.
If you're interested in learning more about this, then I suggest checking these articles below:
- 7+ Amazing Tips to Brand your Dropshipping Store
- Dropshipping Branding: What Is It & Why Should You Care?
What are the Cons of Dropshipping?
Now that you saw all the pros of dropshipping, let's continue with the cons.
Yes, most people that are advertising dropshipping don't mention these. Instead, they call dropshipping "an easy way to get rich".
This brings me to my first con; the mindset:
1. The dropshipping mindset
As you can see, I didn't mention any of the dropshipping pros that "gurus" usually mention when they talk about dropshipping. Here are a few common sentences that you might have heard from these "gurus" already:
- Dropshipping, a way to get rich fast. (Wait, I mean; purchase my course first!)
- Don't like 9-5 or having a boss? Dropshipping is great!
- You can work from anywhere. Just start dropshipping & you will have the same life as me!
Of course, these are still advantages when you're getting sales, but it isn't all golden rainbows...
That's why I added this as the first con of dropshipping; put your mindset right.
It's understandable right now that you don't fully trust me that I'll be honest. The way you can see that I'm trying to get the truth out there is that you will see way more dropshipping cons than pros.
Not all of the cons are that big, and most are easily handled if you know what to do, but because most "gurus" skip these points, I thought I would create a list of all of them so you can start with dropshipping while knowing everything you need to know about the business model.
Don't forget that I'll show you how to deal with each of these cons after I listed them!
How to deal with this con of dropshipping?
As I said at the beginning, I won't just be an open book; I will also share with you a few tips to beat the current cons of dropshipping.
So, what about this one?
Well, all you have to do is to keep in mind that dropshipping is a real business and not a way to easily get rich overnight.
If you got the mindset of running a real business, then you're halfway there already!
If you're interested in learning more about having the right mindset, check out this article with six tips.
2. Almost no control
The only thing that you control is the price of the products that you sell and what kind of products you’re selling in your store.
For example, you don’t have control over:
- Shipping times. This is mostly for people that want to dropship from China. The only thing that you can change is that you pick a better shipment method (like ePacket).
- Package design. With most dropshipping suppliers, you can't control their package design because they take care of everything.
- You can’t put anything extra in your package for your customers. To make it personal, some webshop owners want to put a little thank you note into the package or maybe a special discount code for next time.
This also means that if your customer has a complaint about something in your supply chain (order processing, refunds, delivery speed, and so on), that you can’t easily address it and fix it because it’s not your supply chain!
How to deal with this con of dropshipping?
If you’re just dropshipping and not making any profits yet, then please don’t worry about this because there is nothing that you can change about this if you’re, for example, dropshipping with AliExpress.
Other than picking something else than AliExpress (you can find the AliExpress alternatives here, and you can read here how to get a faster delivery time).
There are some alternatives there that will help you create a better purchasing experience for your customers than AliExpress!
And that's all that you want, right?
If you’re making some profits with a product, then you could look at ordering the product in bulk and taking care of the rest yourself.
Or you could do it via a fulfillment center (like Amazon FBA).
This way, you’re in charge of the package design, if you want to add anything extra to the package, and you even get faster shipping times than if you’re dropshipping from China.
Another plus is that you don’t have to worry about customers ordering multiple products and needing to send multiple packages (more on that below).
3. Sometimes you can’t combine products for an order
This is mostly when you’re dropshipping with AliExpress, but it could also happen if you have a different platform where you're in contact with multiple different dropshipping suppliers.
If a customer orders multiple products and you have multiple dropshipping suppliers for these different products, then you can’t combine these products into one package.
This means that your customers will receive multiple packages and might be complaining after the first package that their order is not complete.
And not only that, but you will also pay shipping fees multiple times.
Each different package that needs to be sent to your customer requires you to pay shipping fees!
For example, this is how it will look like when you have two separate suppliers:
How to deal with this con of dropshipping?
For example, if you’re using AliExpress, then use less AliExpress suppliers, so it’s more likely that your customer will receive their order in one package.
A second thing that you can do is adding a question regarding this to your FAQ page. (More information about that here)
And don't forget to have great customer service. More on that below!
If you're interested in learning more about how to do dropshipping with multiple suppliers, then I suggest checking out the article I linked to below:
How Do You Do Dropshipping With Multiple Suppliers in 2024?
4. Potential quality control issues
You’re dropshipping.
You will never see the product.
If you never see the product, then there could be issues with the product quality, and you will never know it until it’s too late.
Maybe one day you will wake up and see a ton of emails of customers complaining about their product.
How to deal with this con of dropshipping?
If you’re worried about this, then always order a sample from your dropshipping supplier.
A sample is basically you ordering the product yourself, and sending it to your own house to check the delivery time, the package, and the quality of the product.
This way, you can see the product quality for yourself. You can even use the test product to create your own product images and product videos!
You can learn more about this here.
5. Stock shortages
As you read above, you don’t have control over a lot of things when you’re dropshipping.
The same goes for the stock of your dropshipping supplier.
It could happen that your product is suddenly selling really well and that your dropshipping supplier can’t keep up.
Luckily this one is easy to solve!
How to deal with this con of dropshipping?
Always stay in contact with your dropshipping supplier, and ask them how much stock they got and how fast they can have new inventory.
If your dropshipping supplier really runs out of stock, then you can easily switch to another dropshipping supplier that got the same products.
This is easily done on AliExpress, where you just search the product, and most likely, you will find 10-20 different AliExpress sellers selling the same product or with some tweaks.
You could even take care of this before your dropshipping supplier runs out (see it as a backup plan).
Just message some dropshipping suppliers and ask them the same questions as you asked your current supplier for that product.
You can even order samples from these suppliers, so you’re 100% sure that when your current dropshipping supplier is running out of inventory, that you can still fulfill your orders with quality products!
6. Less profit
The hidden “cost” of dropshipping is the lack of bulk pricing.
You will likely pay more for each item you sell as compared to paying less for a large inventory of items, leading to less profit.
Unlike a regular wholesaler that would sell you their merchandise in bulk, a dropshipping supplier sells you a single unit every time you place an order.
Because they sell a single unit each time, they are responsible for storing the products, ensuring the products, and other associated costs like paying staff to retrieve, package, and process single items.
Wholesalers already operate on very low-profit margins and rely heavily upon large volume purchases to make a decent profit, so when these additional costs are added, the wholesaler really has no option but to increase the price of individual items.
That means your profit margins will be lower because you pay more to your dropshipping supplier.
How to deal with this con of dropshipping?
One option to solve this is to sell more products.
That might sound obvious, but I still thought I include it!
For example, selling 10 products for $10 profit = $100 profit, but if you sell 100 products for the same price, then you’re looking at $1000 profit.
Downside then is that you will have more work to do and more chance that a order doesn’t go as expected.
That’s why some people go for high-ticket dropshipping products instead of lower-priced items.
If you're interested in learning more about dropshipping high-ticket products, then check out this article here.
Also, don't forget to check out this article to learn how to price your products in your dropshipping store correctly!
What else?
What you need to do at the beginning is to accept that you might be paying more to the supplier, but you won’t have these extra costs like storing the products and shipping to all your customers.
Your supplier takes care of all these things for you. So it’s important for you to pick the right AliExpress suppliers (or something different than AliExpress) at the beginning of your dropshipping journey.
But if you’re getting consistent sales from a product or more products, then it might be wise to import them in bulk from, for example, Alibaba.
Just keep in mind that even though your cost per product is cheaper because you buy in bulk and the supplier doesn’t take care of sending it to your customer, you will still have extra costs to add later one.
Like shipping it to your customers, warehouse costs, and, if needed, import costs.
You can learn more about the top fulfillment services and companies right here.
Important to know even though it is more work to import it in bulk and send it yourself to your customers (or you let a fulfillment service take care of that). It will definitely be worth it.
Just imagine how many extra efforts you can put into the whole package and delivery:
- You can make sure your delivery time is 1-3 business days instead of 1-3 weeks.
- You could add a business card of your company (your store) inside the package with a discount code for a second purchase!
- You can brand your packaging with, for example, Packhelp.
7. Refunds can be complicated
If you picked your dropshipping suppliers correctly, then you will have less chance on this, but it could still happen.
If you're dropshipping from China, then the shipping time might take 2-3 weeks before the product(s) arrive at your customer’s destination.
That and the fact that you won’t have control over the product quality increases the chance of refunds.
How to deal with this con of dropshipping?
The best way to handle refunds and returns when dropshipping is to look if it’s cheaper to let your customers keep the product and to just send a new product.
Otherwise, let your customer send it back to your supplier.
You only have to decide if you pay for the return costs or not.
If you want to learn more about how to handle this, then I suggest reading our other article Dropshipping Returns & Refunds: Everything You Need to Know!
Plus, you can check out this return policy template here.
8. Customer service can be difficult
As I said above, you don't have control over the supply chain.
If your customer got a complaint, then you can't easily fix it.
If your customer got a question and you can't answer it, then you need to discuss that with your dropshipping supplier first, this might take some time.
How to deal with this con of dropshipping?
To be as short as possible:
Be great with your customer service!
Customer service is important to keep your customers loyal to your dropshipping store.
It will even help you with getting fewer refund requests.
Always try to be as polite and understanding as possible when you reply to a customer with questions or demands.
You can also make your customer service less work by doing things like creating a FAQ page.
If you want to learn more about this, then I suggest reading Customer Service for Dropshipping Stores – Complete Guide! to get you started.
9. A lot of competition
Most people fail with their dropshipping store because they are not unique.
There are so many people learning about dropshipping and starting dropshipping stores right now.
For example, type in Google Trends “Dropshipping”.
Do you see how popular dropshipping is?
Everyone wants a piece of it because so many of these “gurus” advertised it as an easy way to earn money online. (Source)
But do you know what the sad thing is?
Most of them don’t put any effort into their dropshipping store.
They open their store, import some products without changing anything, and start advertising.
This means that a lot of people that are dropshipping are selling the same products with the same information they got from maybe even the same dropshipping suppliers.
Of course, having the same product is not a bad thing yet, but to also have the same images, descriptions, and so on will definitely not help you!
How to deal with this con of dropshipping?
So how to solve this disadvantage of having a lot of competition?
Simple.
Be better than them!
And don't try to copy everything to save some time.
Put some effort and time into your dropshipping store because you're starting a real business!
If you want to learn more about how to be unique and beat your dropshipping competition, then I suggest reading the two articles I linked to below:
- Unique Dropshipping Store: 11 Amazing Tips to Create One
- 7 Tips to Beat the Competition of Your Dropshipping Store in 2024!
The Pros & Cons of Dropshipping: An Overview
Below you will find an easy to follow overview of all the pros and cons of dropshipping.
As I mentioned above, I listed way more cons than the usual "dropshipping gurus".
Keep in mind that not all of these cons are so big and that I showed you above how to deal with them:
| Pros of dropshipping | Cons of dropshipping |
| Quickly test products without inventory | The dropshipping mindset (Most people think dropshipping equals getting rick quick, thanks to these ‘gurus‘) |
| Not much startup costs | Almost no control over things like shipping times, package design, and the supply chain. |
| Your dropshipping supplier handles most of the work | Sometimes you can’t combine products for an order |
| Learn useful skills | Potential quality control issues |
| You can open a dropshipping store really fast | Stock shortages |
| Highly scalable | Less profit than purchasing the products in bulk |
| Refunds can be complicated if your suppliers are on the other side of the world | |
| Customer service can be difficult | |
| A lot of competition |
Conclusion
So, there you have it; all the pros and cons of dropshipping that you should know about before starting a dropshipping business.
If you're still interested in dropshipping after reading this article, then I wish you the best with your journey!
And if you're second-guessing now, then take a look at these successful dropshipping store examples for some inspiration and motivation!
If you have any tips for this article or if you have any questions, then let me know by commenting below or contacting me directly by pressing the “Contact Us” button at the top.
Getting Started with Dropshipping in 2024
So, are you ready to get started with dropshipping? Or maybe you have already started, but you’re looking to get some inspiration?
If so, then I suggest reading this complete Shopify dropshipping guide.
It’s a huge article, but it contains everything that you need to know to create your own Shopify dropshipping store in 2024. It’s like a dropshipping course, but then for free!
Reading this article will surely help you to get started and to stay motivated while beginning and continuing your dropshipping journey.
Just don’t forget that success takes time. Keep improving each and every day!
Shopify Dropshipping: A 20-Step Guide to Starting Your Store
And here are the articles I suggest you read next:
- The 25 Best Dropshipping Niche Ideas for Your Store in 2024
- Dropshipping Basics: 7 Surprising Things to Know as Beginner
- Dropshipping Startup Checklist: 10 Things to Do Before Starting
- How to Find Winning Dropshipping Products (13 Research Methods)
And also, if you didn’t create a Shopify account yet (to get your dropshipping store online), then you can click here to get a free 3-day trial + pay $1/month for the first 3 months!
