There’s a lot of bad information online about dropshipping, which leads to people making costly mistakes that can kill their dropshipping business.
If you want to have a successful dropshipping business, avoid these 5 mistakes. There are other smaller mistakes, but these 5 can completely derail your business before you even start.
The 5 Common Dropshipping Mistakes
Mistake 1: Paying For Access To A Dropship Supplier
The first mistake is paying for access to a dropship supplier.
Let’s continue using the chandelier niche as an example. When you’re looking for suppliers and you use Google, most of the results are likely middlemen suppliers.
They aren’t the kind of companies that we want to dropship with. That’s because they make most of their money by charging fees.
These fees will come in two ways. The first will be an application fee to be approved by them. The second way will be dropshipping fees for every order you place with them.
If a dropship supplier wants you to pay upfront, it’s most likely because that’s how they make their money.
They aren’t interested in a long-term business relationship with you. You want suppliers that will take you on because you’re going to work together for years to come. You’re both going to make money with each other – it’s a beneficial business relationship.
Mistake 2: Working With Suppliers Who Call Themselves ‘Dropshippers’
The next dropshipping mistake to avoid is working with suppliers who call themselves dropshippers.
Don’t look for dropshippers on Google – it’s an easy way to lose a lot of money fast and for this business method not to work.
It might be a little counterintuitive, but you should understand, now that you’ve made it this far, that when you’re searching for suppliers you should never work for anyone that calls themselves a dropshipper. You want to sell products for suppliers whose business is creating brands.
So again, let’s say you’re selling chandeliers. You want to sell for a company that makes chandeliers and doesn’t sell to the public but is looking for retailers. They’re not advertising themselves as a dropshipper.
The suppliers you want to work with shouldn’t be a middleman who buys products, keeps it in the warehouse, and then tries to find people to sell it for them. They are an actual brand that says they’re looking for retailers, but not dropshipping themselves.
Mistake 3 Working With Suppliers Who Don’t Enforce MAP policies
Another mistake is working with suppliers that don’t enforce MAP policies.
MAP stands for Minimum Advertised Price. It means that when you’re approved with one of these suppliers, they will tell you the lowest that you can advertise their products for. This is great because you completely avoid pricing wars.
For example, let’s say you’re selling baseball bats and your wholesale cost is $50. If your dropship supplier has a minimum advertised price policy of $80, then the least amount of money you can make per sale is $30.
Now what happens with suppliers who don’t enforce these MAP policies is that you get into pricing wars.
For instance, maybe one of your competitors is okay with making $5 a sale. So this item that costs you and your competitor $50 at wholesale, your competitor is selling it for only $55, because they want to have the lowest price.
Your competitor wants to get all the sales, and they don’t care if they only make $5. This is something you totally want to avoid in dropshipping.
The easiest way to avoid it when you’re first getting started is to only work with suppliers who enforce these minimum advertised price policies.
Mistake 4: Competing With Offline Retailers
The next mistake you want to avoid is competing with offline retailers.
If there are competitors in your niche selling in both offline and online stores, it most likely means they’re going to have better pricing than you. They’ll have special MAP policies that apply to them only. These retailers will be able to offer much more value than you.
Mistake 5: Buying a ‘Turnkey’ Dropshipping Store
Another common mistake is purchasing a ‘turnkey’ dropshipping business.
In a previous article, we told you where you can buy and sell stores, but we 100% recommend you build your own. Whether it be your first store or your tenth, once you know the steps to being successful in dropshipping, it’s always better to build than it is to buy.
Maybe you find a dropshipping business for only $200, $500, or $1000, and since you’re probably new to the e-Commerce game, your first reaction is, “Great, I don’t have to do anything myself. I could buy this business and it’s already loaded with products”.
You should never buy one of these cheap dropshipping stores. They’ll never make you money because they’re just copy and paste clones of websites that dozens, if not hundreds, of people already own and none of them are making money.
The worst part is that most of them are pre-loaded with products that you could find on Amazon or other big-box retailers for a third of the price.
A viable option is to hire a VA. For a couple hundred dollars, they will upload all your products for you.