I talk a lot about the positive things about dropshipping, but there are disadvantages of dropshipping as well. I will talk about them all, and I will give you tips with each of them on how to make the disadvantage an advantage!
If that doesn't sound awesome, then I don't know anymore! Enjoy reading:
1. 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 do you solve this dropshipping disadvantage?
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).
Here is a great video regarding ordering in bulk:
2. 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 do you solve this dropshipping disadvantage?
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?
3. 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 do you solve this dropshipping disadvantage?
If you’re worried about this, then always order a sample from your dropshipping supplier.
A product sample is basically you ordering the product your self, 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 your self, and you can even use the test product to create your own product images and product videos!
You can learn more about this here.
4. 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 do you solve this dropshipping disadvantage?
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 other 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!
5. 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 do you solve this dropshipping disadvantage?
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.
6. 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 do you solve this dropshipping disadvantage?
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 my other article Dropshipping Returns & Refunds: Everything You Need to Know!
Plus, you can check out this return policy template here.
7. 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 has a question and you can't answer it, then you need to discuss that with your supplier first, which might take some time.
How do you solve this dropshipping disadvantage?
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 stuff like creating a FAQ page.
If you want to learn more about this, then I suggest reading Customer Service for Dropshipping Stores – Complete Guide! by me!
8. A lot of competition
Most people fail with their dropshipping store because they are not unique.
There are so many people starting with dropshipping 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 do you solve this dropshipping disadvantage?
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!
Disadvantages of Dropshipping: An Overview
If that was a lot to take in, then don’t worry!
We have created an amazing infographic for you that you can save for later:
What are the risks of dropshipping?
With any business, there are risks involved.
If, after reading this article, you're wondering what the risks of dropshipping are, then I suggest checking out this article here.
That article will go over the top 10 risks that you need to keep in mind before starting your online store. For example:
- Shipping costs
- Scammers
- Taxes
What are the advantages of dropshipping?
Now that we have covered the disadvantages and risks of using dropshipping as a fulfillment method for your online store, let’s also take a look at the advantages.
I will list them below for you in bullet points, but I highly suggest you read this article here as well to learn more about these benefits.
- Quickly test products without buying in bulk (No inventory)
- Not much startup costs in comparison to retail stores
- You don’t have to produce, store, and send the products
- Learn useful skills
- You can open a dropshipping store really fast
- Highly scalable
Sounds great, right?
Conclusion
So there you have it! All the disadvantages of dropshipping and how to solve them.
I hope this will give you some newfound motivation to start or continue with your dropshipping store!
If not, then I wish you the best with anything else that you're going to do with your life!
Don't forget that there are a lot of advantages to dropshipping as well.
If you got any other dropshipping disadvantages or if you have any questions regarding dropshipping, then let me know by commenting below or contacting me directly by pressing the “Contact Us” button at the top!
Are you still excited to start/continue dropshipping? Let me know.
I wish you the best with everything that you want to do!
Getting Started with Dropshipping in 2024
So, do you still want to start with dropshipping after reading all that? Or maybe you have already started, but you're looking for some inspiration after reading this article?
If so, then I suggest reading my 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 some of our best articles:
- AliExpress Dropshipping: A 20-Step Getting Started Guide (2024)
- The Complete Guide: Can You Start Dropshipping Without Money in 2024?
- 12 Reasons Why Most People Fail With Dropshipping in 2024 | Beat Them!
- 23 Awesome Shopify Dropshipping Store Examples
And also, if you don’t have a Shopify store yet, then you can click here to get a free 3-day trial + pay $1/month for the first 3 months!
