Is Dropshipping a Bad Idea?
Dropshipping isn’t a bad idea, but it really depends on a number of things. Just like with any job, some people will be much better suited and equipped for that job than others.
None of the below reasons are deal-breakers. You can work around these issues and make dropshipping work for you, it is however important to be aware of them before you start.
The issue is when you listen to some people on YouTube it sounds too good to be true. They make it sound like easy money and that’s obviously because they are most likely selling a course they want you to buy.
Personally, I love dropshipping and I believe it’s a great business model. Especially when you compare it to working a standard 9 to 5 job. But I don’t love every part of it and for some people, they may be happier working a regular job.
1. Does the Concept of Dropshipping Appeal to You?
Dropshipping can be difficult, frustrating, and even lonely at times. If you’re doing dropshipping purely to make some money, it probably isn’t going to work out for you.
You need to enjoy the process of building a store, doing product research, creating ads and optimizing. Can you handle sitting on a computer analyzing and making changes for several hours a day? For some people that sounds like a nightmare and for others, they love it. They can’t wait to see the results of all these changes.
Do you like the idea of putting in the work and creating a home-based dropshipping business without any certainty that it will succeed? Some people find it pointless to work hard without any guarantees whilst others find it exciting.
It’s tough to stick to anything when you are only in it for the end goal. The actual journey on the way to your goal should be as exciting as reaching the actual goal.
Another aspect of the dropshipping business model is the ethical aspect. If you plan to dropship from AliExpress you are often selling lower quality products with slow shipping time, many people would consider this unethical.
2. Dropshipping is NOT Free to Start
Contrary to what you have heard my online gurus say, it’s virtually impossible to create a dropshipping business with no money. Sure you could get Shopify’s 14-day free trial, try and attract traffic to your store for free and start making consistent sales before your free trial is up, but it’s not realistic.
I think you should have $1,000 that you are prepared to lose if things don’t work out. With $1,000 you could have multiple attempts at creating a successful store.
You can try and sell several products and run multiple ads for each product which will give you a realistic shot at finding a winning product.
Even if you happened to lose that $1,000 the experience you gained will be far more beneficial to you than spending the money on a $1,000 dropshipping course. Trust me it’s a bad idea to try and start a dropshipping business with no money.
Saying all that dropshipping has very low start-up costs compared to many other businesses. This is what attracts many younger people and even teenagers to dropshipping.
3. Which Country Do you Plan on Dropshipping To?
Which country do you plan on dropshipping to is a big factor? You can create a successful dropshipping business in most countries but some are easier to make money from than others.
For example, dropshipping in the US is easier than dropshipping in South Africa. This doesn’t mean it can’t be done, but it will mean it will be harder, here’s an example comparing the 2 countries:
- The shipping times from China will be much longer
- The shipping prices from China will be much higher
- There are far less dropshipping suppliers in South Africa
- South Africa has poorer infrastcrature and domestic shipping will be expenisve and slower
- South Africans aren’t large online spenders compared tp the US
- The average income in South Africa is much lower compared to the US
The good part is that even if you live outside of countries where dropshipping isn’t as mainstream, you can still dropship to them countries.
There are pros and cons to dropshipping in most parts of the world. Even though the US is considered the holy grail of the dropshipping countries it’s not without its cons. It is extremely competitive and ad prices are very high.
4. Dropshipping is NOT Passive
If you want to create a passive income stream, dropshipping isn’t for you. Many people are initially attracted to dropshipping because they are looking to create an income stream without doing much work. They just think once it’s set up it runs on autopilot.
It is definitely far less work than a regular job once it is all set up. However, there is always some work you will need to do. Even if you hire VA’s (virtual assistants) to take care of much of the work, unavoidable tasks are inevitable.
With Facebook ads, it is often a constant game of optimizing ads. Once you start scaling your business, you will face a lot of customer queries and complaints.
VA’s can assist with much of the customer service but they won’t know how to handle every situation. On top of that, you have to make sure the VA’s are doing their job properly. I’ve heard horror stories of VA’s abusing customers and ripping off the store owners.
If you are dedicated to making dropshipping work, you shouldn’t want to only turn it into a passive income stream. In your free time, you should be looking at creating new stores, doing more product research, testing more ads and offers and learning more.
5. How Do You Handle Stress?
Don’t assume because you can sit at home and make money whilst everyone else is at work that it won’t be stressful. Dropshipping can be extremely stressful and if you don’t handle the stress well, then don’t dropship.
With dropshipping, you are a middleman between the supplier and the customer. This means all the problems that can arise you are responsible for, even though it probably isn’t your fault. These are just a few of the things that can go wrong:
- Your supplier sends the wrong product, sends it to the wrong person or runs out of stock
- Your product breaks or doesn’t work as it should
- Your VA ignores or abuses your customers
- Your payment processor freezes your account
- Your shipping company has delays and the shipping times take too long
- Your ads platform bans your product from being advertised
All these issues are out of your hands but the finger will be pointed at you. It can be hard to run a business relying on other people you may not have ever met, especially when they don’t care about your business as much as you do.
6. How Risk Adverse Are You?
Some people need that safety net of a regular income coming in to make them feel secure. If that’s you, then maybe dropshipping isn’t for you.
Dropshipping will be a constant game of highs and lows. Some people enjoy that thrill of the unknown and it freaks others out.
You may find a winning product and start making some serious money quickly, followed by nothing for a while. Some products trend quickly and then die off suddenly.
Dropshipping tends to attract younger people and this may be because often younger people have far fewer responsibilities in terms of bills and a family. This means they are in a much better position to take that risk and failing won’t hurt them as much.
The good part of dropshipping is that you can still do it as a side hustle whilst you work a full-time job. For more info, I have an article on Dropshipping as a side hustle.
Summary
Don’t get excited about the concept of dropshipping and jump straight in without evaluating whether it’s for you or not. There is a lot to learn and to stay relevant you’ll need to continue to learn, so if you don’t enjoy the process you’ll most likely fail in the long term.
Even with all the downsides of dropshipping, for me personally, the pros far outweigh the cons. At the same time, I know of a lot of people who started and quit not long after. This is mainly due to the fact that they realized it’s a lot of work for the fact that they may fail and make nothing.
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