Dropshipping has become a very popular eCommerce business model in recent years. But as it has grown, so have the misconceptions about it. Here are three of the most common misconceptions that so-called experts want you to believe and why they are wrong.
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Dropshipping Is Easy and Doesn’t Cost Anything
In basic terms, dropshipping is one of the simplest business models out there. You do not need to purchase any products in advance, which means you also do not need a warehouse to store inventory. Instead, everything you sell is shipped directly by your suppliers to your customers. A percentage of each order is automatically paid to the supplier, so all you have to do is focus on marketing your products. However, if you think that means you do not have to put any work into your business or you do not need to make any financial investment, you need to think again. Dropshipping will not turn you into an overnight success story. Like any type of business, dropshipping requires your diligent attention. If you want your products to sell, you need to spend a lot of time coming up with marketing campaigns that target your ideal audience, researching your competitors to see if you can beat them on price and if not, what your USP will be for competing in the marketplace, and determining which products you are going to stock, based on customer demand and niche.
While you can technically start a dropshipping business for zero dollars, it does not mean you should. You will have to invest in marketing and research as well as subscription fees to platforms like Shopify. You also need to invest in building a decent website and engage with good SEO practices to get your shop ranking high on search engines. So, contrary to what the experts say, running a successful dropshipping business is not easy and it needs a little investment. But you can make a success of your eCommerce stores when you use these dropshipping automation tools and put in the effort.
Dropshipping Is an Impenetrable Market
While some experts say dropshipping is easy and cost-free, others keep saying that it has become an impenetrable market. After all, with such a simple business model and low startup costs, it does seem like anyone with a laptop and a few hours on their hands has started a dropshipping business.
Firstly, a large percentage of those businesses make the above mistake of thinking dropshipping is easy. So, many online vendors never invest time or money and therefore end up selling little. That is good news for a dropshipper who is willing to put in the hard work because it means in reality, there is less competition than the experts make out. Secondly, a saturated market tells you that there are many eager buyers out there. If the dropshipping model was not viable, there would not be so many dropshippers. As long as a dropshipping business has a unique selling proposition and builds a brand that customers identify with, there is no reason why it cannot compete and become successful.
Dropshipping Provides Low Profits
While dropshipping is generally associated with low-profit margins, it is a misconception that you cannot be highly profitable with a dropshipping business. The key is to compensate those low margins with higher pricing within a competitive range via selling larger volumes.
While that is not easy, it is certainly possible. You will not be able to attain high volumes when your business is just starting, but when you use the right techniques, such as building a solid brand identity and being regularly active on suitable social media platforms, you can gain large volumes of sales, and therefore more profits.