If you’re new to dropshipping, please read through this article as I think it will help you. These are the top 5 downsides of dropshipping I didn’t know when I first got started, plus 20 more disadvantages you need to know about.

Not only that, I’m going to give you the solution for overcoming these disadvantages so you’re not left feeling confused. I still believe dropshipping is a worthwhile business in 2025 if done right.

1. Dropshipping Businesses Are Unsustainable

You’ve probably heard gurus say that making money with dropshipping is easy, but it’s not quite that simple. One major issue often overlooked is the low profit margins.

These low margins come from the nature of dropshipping—products are bought individually instead of in bulk. Since each item is picked, packed, and shipped separately, the costs add up.

On the other hand, bulk purchases at wholesale rates lower the average product cost, resulting in higher profit margins.

This brings up an important point: if your dropshipping store performs well, what’s stopping a competitor from buying the same product in bulk at a lower price and undercutting you? Narrow margins make dropshipping vulnerable to competition.

That’s why relying solely on dropshipping might not be a sustainable long-term strategy.

To keep your store profitable, you’ll need to stay ahead by constantly cycling through trending products. However, this approach requires ongoing effort—regular product research, testing, and optimizing ad creatives to keep up with market trends.

Below is an example of how to make dropshipping sustainable. The store Articture has focused on quality products and branding so they are not trying to compete on price.

2. Customers Will Search for the Lowest Price

One common but often overlooked challenge for beginners in dropshipping is price checking. Shoppers frequently search Google for the exact product to find the lowest price.

Customer loyalty is rare and most are just looking for the best deal. Since dropshipping products are usually unbranded, it’s easy for consumers to compare prices across multiple sites.

Even if you’re selling branded products, shoppers may still search for the brand online, forcing dropshippers to lower prices to stay competitive.

Another hurdle is the growing awareness of dropshipping stores that source from marketplaces like AliExpress. When consumers recognize this, many prefer to buy directly from AliExpress instead of paying a markup on a Shopify store.

3. Dropshipping Ad Costs Make Profiting Difficult

While free methods can generate traffic for your dropshipping store, they often take time to produce meaningful results. As a result, most stores rely on paid advertising in the early stages.

Ad costs have increased over the years due to rising competition. Since I started dropshipping in 2016, I’ve noticed a significant rise in Facebook’s cost per click (CPC), which has squeezed profit margins.

Platforms like Facebook and Google use an auction-based system, where higher bids drive up prices. This makes it essential for dropshippers to fine-tune their stores and ad strategies to keep margins sustainable.

Achieving a solid return on ad spend (ROAS) requires time, testing, and careful planning. For beginners, one of the toughest challenges is identifying exactly what adjustments will improve their ROAS.

4. Stressful Dropshipping Problems

Stress is a factor in dropshipping most people don’t consider, as I found out during my first year. My advice for newcomers: don’t depend entirely on dropshipping income to support yourself or your family for at least the first year.

Even with success, income will fluctuate. Many factors can cause profits to swing wildly from month to month.

When things go right such as finding a winning product, securing a supplier, and getting a good return on ad spend (ROAS)—you can scale and generate solid profits. But be ready for setbacks.

Supplier-related issues are a common source of problems and stress, including:

Product Pricing
Product Quality
Shipping Times
Packaging
Inventory Management

I’ve personally dealt with a supplier switching to cheaper materials without warning, which hurt my business and upset customers. In dropshipping, always expect the unexpected; if you can’t calmly deal with problems, it’ll make succeeding difficult.

5. Competitors Will Steal Your Success

Copycats are rampant in the dropshipping industry! If you think finding an unsaturated product on AliExpress guarantees consistent income, think again. I’ve experienced many of my stores being copied. You can make short-term profits but competitors notice your success so be prepared for competition fast.

There are several dropshipping tools that allow others to monitor your store and ads. Any success you achieve will likely attract copycats replicating your business model.

The problem with dropshipping from AliExpress and similar platforms is the lack of uniqueness in your business, making duplication easy. If others can work with your supplier, sell the same products, create similar Shopify stores, and run identical ads—they will.

I’ve been both the victim and the perpetrator of this. Seeing someone successfully run ads and make sales provides a blueprint for others to follow. By copying a proven store, you know the demand for their products and the effectiveness of their ads, saving time and money on testing.

However, there are ways to build a protective moat around your business, making it difficult for others to copy your model and steal your sales.

I have an article on how to protect your dropshipping business from copycats, it’s a must-read for any beginner in the industry.

20 More Dropshipping Disadvantages

Disadvantage	Explanation	Impact
6. Low Profit Margins	Since you don’t buy products in bulk, the cost per item is higher, leading to thinner profit margins.	Makes it challenging to compete on price and achieve significant profits.
7. High Competition	Low barriers to entry mean many sellers might offer the same products.	Increases competition, making it harder to stand out and attract customers.
8. Inventory Problems	You have no control over inventory levels of your suppliers.	Can lead to stockouts or overselling if the supplier runs out of stock without informing you.
9. Shipping and Logistics	Dealing with multiple suppliers can complicate shipping logistics.	Leads to higher shipping costs and longer delivery times, potentially deterring customers.
10. Supplier Mistakes	Mistakes made by suppliers, such as wrong items or poor packaging, affect your reputation.	Results in customer dissatisfaction and negative reviews, even though you didn’t cause the errors.
11. Poor Customer Experience	Since you don’t handle the products, you can’t ensure quality control.	Difficult to guarantee product quality, packaging standards, or timely delivery.
12. Branding Limitations	Customizing products or packaging is challenging with dropshipping.	Harder to build a unique brand identity and customer loyalty.
13. Returns and Refunds	Handling returns involves coordinating with suppliers who may have different policies.	Creates a complicated and time-consuming returns process, frustrating customers.
14. Dependant on Suppliers	Your business relies heavily on suppliers’ reliability and professionalism.	Supplier issues can directly harm your business operations and reputation.
15. Payment Processing	High risk of chargebacks due to shipping delays or product issues.	Payment processors may hold funds or terminate your account, affecting cash flow.
16. Minimal Product Knowledge	Not handling products directly can limit your understanding of them.	Makes it difficult to provide detailed product information or assist customers effectively.
17. Legal Liability	Selling counterfeit or non-compliant products from suppliers can make you liable.	Potential legal disputes, fines, or shutdown of your business.
18. Customer Service	Resolving issues requires coordination with suppliers who may be unresponsive.	Delays in resolving customer complaints can lead to dissatisfaction.
19. On-going Website Costs	Ongoing expenses for website hosting, marketing, and advertising.	These costs can accumulate, affecting overall profitability.
20. Currency and Exchange Rate Fluctuations	Dealing with international suppliers exposes you to currency risks.	Exchange rate changes can affect product costs and pricing strategies.
21. Customization and Differentiation	Offering the same products as competitors limits uniqueness.	Harder to differentiate your store and attract loyal customers.
22. Focus on Price Competition	Many sellers competing on the same products often compete on price.	Leads to price wars, further reducing profit margins.
23. Supplier Fraud	Risk of dealing with unreliable or fraudulent suppliers.	Can result in lost money, unfulfilled orders, and damage to your reputation.
24. Shipping Delays	Products shipped from overseas may have long delivery times.	Leads to customer dissatisfaction and higher return rates.
25. Scaling is Difficult	Managing increased orders becomes complex without proper infrastructure.	May require investment in automation or hiring staff, increasing operational costs.

How to Minimize Dropshipping Disadvantages

Reading about the challenges of dropshipping might feel discouraging, but I can assure you it’s a solid business model when done right. Think of dropshipping as the starting point in your e-commerce journey. To minimize its downsides, focus on building a brand. A strong brand acts as a protective layer around your business. Here’s how:

Work with a manufacturer in China to create unique product versions and improvements that set your items apart.
Buy in bulk at wholesale rates through a China-based agent or a third-party logistics provider (3PL) in your country, each offering different benefits.
Use private labeling to brand products with your logo, custom packaging, and unique product names.
Build a social media presence to grow brand awareness and develop a loyal audience.
Design a custom Shopify store with unique features that go beyond standard themes.
Produce original videos and images to offer fresh content beyond the generic materials found online.

These steps make it harder for competitors to replicate your business, discourage price checking, and set the foundation for long-term success.

Optimizing ad campaigns is also essential to control costs. This includes targeting specific demographics, adding negative keywords, split-testing campaigns, and improving your quality score.

With these strategies, you can build a business that generates consistent income and reduces stress over time.

By partnering with a manufacturer and creating a brand, you gain a competitive edge—offering lower costs, superior products, faster shipping, and exclusive items that eliminate price competition.

If I were to restart my dropshipping journey, I’d use it as a way to test product viability before moving into manufacturing partnerships. My advice is to treat dropshipping as a stepping stone, using it to transition toward building a long-term brand.

This is how you combat and reduce the downsides of dropshipping and make your business sustainable business that can generate income for years to come.