The pros sound great and all, but drop shipping can have its disadvantages. Thus, you’ll want to consider the cons before starting your online store.
Check out a few of them below.
Since drop shipping is easier to get into, you can expect other people to want in. You’ll most likely want to watch out for larger drop shipping companies that offer lower prices because of lower markups.
Another factor you’re competing with is the suppliers. Suppliers like to keep their options open and can easily make deals with several drop shippers. You’d be selling the same product as others, so standing out might be a struggle worth considering.
As the retailer, you have little control over the product’s quality standards. You don’t even get to see the supply chain at work. You won’t get to handle the shipping, product inventory, stocking, etc.
You’re putting a lot of trust in your suppliers to do most of the work. As a result, they can be more hard-hitting on your business if any issues were to occur. That’s why you need to be more knowledgeable about damage control and customer retention.
Customer Service Difficulties
If a customer wants to return or exchange an item, they’ll head to you. Then, when a customer communicates with you, you’ll need to first talk to the supplier before replying to their queries.
Unfortunately, this back and forth exchange is likely to experience some delays, which could lead to unsatisfactory customer ratings.
The process may seem clear-cut. Customers order, you process their order, and the supplier does their job. Yet, in reality, order processing can get a bit messy.
When you cut a deal with more than one supplier, you’re signing up for two different shipping methods: billings and processes. This might cause issues when customers purchase different products from different suppliers.
If a few orders go wrong, you might lose your customer retention to other drop shippers.
When starting your drop shipping gig, don’t expect high-profit margins, especially if your product has a high competition rate. You’ll need to be patient until you build your brand name, which takes time.
To expect more profit, we recommend selling niche products that aren’t as popularly available. It’ll give you better chances of accumulating a profit.