The Reality of Dropshipping: 6 Ugly Truths You Must Know

Dropshipping sounds simple on paper.

No inventory, no warehouse, no upfront bulk orders. Just pick a product, run ads, and collect profit—right?

That’s the version most people hear.

But if you're wondering whether dropshipping is still a smart use of your time in 2025, you're asking the right question.

Quick Answer: What is the truth about dropshipping?

The truth about dropshipping is that it is a real business model with real challenges. While it offers low startup costs and no need for inventory, it also comes with thin profit margins, unreliable suppliers, long shipping times, and high competition. Success requires effort, professionalism, and long-term strategy.

This article breaks down the real challenges, overlooked truths, and what it actually takes to make it work.

Let's get started!

6 Overlooked challenges of dropshipping

Most dropshipping course sellers don't want you to understand the challenges of dropshipping because you're a prospective course buyer.

Their success hinges on their ability to sell you a dream—that you can and will become rich, but only if you buy their course.

They'd hate it if you understood the magnitude of the difficulty of making a dropshipping business work.

So, we've listed common challenges you'll encounter before achieving success with dropshipping.

The purpose of this list is not to dissuade you from pursuing dropshipping.

Instead, we want you to see dropshipping for what it is and tame any wild expectations some guru might have sold you.

1. Thin profit margins

Dropshipping's thin profit margins are attributed to reasons like:

• Increased competition. A low barrier to entry, together with the promise of making millions, is tempting. Therefore, most people start a race to the bottom with unreasonably low prices to outbid competitors. Most never break even.
• Platform fees. Ecommerce platforms like Shopify and BigCommerce have fees for website hosting, maintenance, and even payment transactions. These fees eat into your profit margins.
• Shipping fees. Heavy or sensitive products cost significantly more to ship.

These aren't the only reasons for thin profit margins.

Other factors, like expensive suppliers and customer service costs, also affect your profit.

2. Quality control and dependency on the supplier

Quality control is essential for high customer satisfaction (CSAT) ratings in any business.

Good CSAT scores reflect positive reviews, fuelling your dropshipping business's growth.

Further, if you have control over the supply chain, you also have control over product quality, as proven by traditional businesses.

However, the downside of dropshipping is that it takes away control over your supply chain.

Dropshipping suppliers are entirely responsible for the quality of products your clients receive.

This is a huge business responsibility to leave to a third party.

Since most suppliers only care about making a sale, they'll abuse this responsibility by shipping subpar products or failing to ship entirely.

The result?

• Dissatisfied customers flock to your website and social media and leave negative reviews.
• Customers cancel active orders, complain about your business, and initiate chargebacks.
• The platforms you're on (social media—ads, web hosting, payment gateways, and banks) suspend your accounts or hold your money.

These events can swiftly drive your business to the ground.

Bad actors aren't the only bad thing you get from over-relying on suppliers; sometimes, even good suppliers run out of stock.

This is especially frustrating when it happens to a winning product you've just started scaling.

Remember, customers don't know that you aren't the one shipping the items.

Consequently, you'll always take the blame when something goes wrong.

The worst part about supplier issues is that they can hit you regardless of your experience with dropshipping.

To limit the risk you expose yourself to with suppliers, always do your due diligence and ask the right questions before committing.

3. Long shipping times

Big businesses like Amazon and Walmart set extremely high time-to-deliver expectations.

This creates a huge problem for dropshippers because the reality of dropshipping is that fast shipping times are hard to achieve with dropshipping.

In most instances, the product origin is thousands of miles (even on different continents) away from the customer.

Unlike Amazon or Walmart, your suppliers don't have warehouses near the customer.

Therefore, shipping times are longer.

Products might be in transit for as many as 60 days. (Although there are ways to make it much quicker in 2025.)

Customers don't want to wait two months for their product when Walmart can do it in two days.

Consequently, you'll have to contend with frequent chargebacks and complains on account of long shipping times.

4. Customer service issues

Customer service is key to building lasting customer relationships.

You can turn an angry, frustrated customer into a loyal fan through customer service.

Many dropshippers fail in this part of their business because they start off with the wrong mindset.

There's a misleading notion that dropshipping is a well-oiled machine that runs smoothly with minimal effort, making you millions in your sleep.

This leads people to believe that they don't need to engage customers.

The truth is that even when things are going well, you must be intentional about creating and nurturing customer relationships.

Here's why:

• Prevent bad reviews from happening. Unhappy customers will leave a bad review without saying a word to you. Proactively providing a way for them to reach you if they're not satisfied prevents such occurrences.
• Crisis handling. Since you don't manage the supply chain, fulfillment issues are bound to arise periodically. But this shouldn't spell doom for your business. Proactive communication assures customers that you have everything under control.
• Increased customer retention. Your customers stick with your business when they feel seen and appreciated and know they can trust you to deliver and be honest.

The main reason dropshippers fail in customer service is that they underestimate the amount of work required to keep customers happy.

And when they don't, they're not ready for the time and financial implications.

5. High competition and copycats

Anyone can start a dropshipping store because the barrier to entry is extremely low.

Inevitably, thousands of sellers promote the same products.

The worst part?

Most new sellers don't even research the products they sell; they simply identify and copy successful stores.

It's not unusual to see an entire replica of your store with a different logo.

While copycats almost always get flustered and quit, they can still dent your revenue by affecting your sales.

They'll lowball you (even if they lose money) just to make a sale.

A downside of dropshipping is that you can't legally protect the product because you don't own it.

You can file copyright claims or DMCA takedown notices against a copycat for using your photos.

However, this process is laborious and time-consuming, especially if your store is successful since you'll have to deal with multiple copycats.

To protect yourself against lawsuits, there are a few steps you can take.

And if you own a print on demand store, here's how you can protect your designs.

6. It's hard to build a brand

Among the many things you must do to succeed with branded dropshipping, two stand out:

• Building a strong brand identity. A strong brand identity comprises a great logo, brand colors, typography, quality photography, and consistent messaging on social media platforms.
• Selling unique, high-quality products. A unique, high-quality product offers different essential features from competing products and isn't readily available to other sellers. Customers must buy from you or a handful of other sellers.

Other factors, such as choosing a niche, serving your customers exceptionally well, marketing strategically, and optimizing your website, are also important.

However, they're also essential for just about any other business.

The two above are difficult to achieve with a dropshipping store because most dropshipping products are generic and readily available to any seller.

Multiple generic products in your store won't match the brand identity you've created.

Dropshipping secrets you should know

Away from the challenges, let's cover some "secrets" of dropshipping to help you stay sharp, manage your expectations, and increase your odds of succeeding.

• Most dropshipping "gurus" are after your money. They make their money by selling you a course. Think about it: would you stop making millions to teach people about the thing that's making you millions?
• Making mistakes is a part of the process. "Gurus" want you to believe that their course will prevent you from making newbie mistakes. The truth is that no course will prevent you from making mistakes, not even the legit ones.
• Suppliers can make or break your business. Suppliers are key components of your business. Over-relying on one supplier is risky and will probably backfire at some point. Always have a backup or two.
• An email list increases your Return on Investment (ROI). According to a Litmus report, every dollar spent on email has an ROI of $36. So start collecting customer emails as early and as much as you can for higher ROI.
• Private-labeling your best sellers increases your profit margin. Private labeling allows you to add your touch to a best-seller and build a brand around it, allowing you to sell it at a higher profit margin.
• It's okay to keep an eye on your competition. You don't always need to reinvent the wheel. Spying on your competitors can help you identify trends or inspire you to come up with new marketing angles.

Myths vs. facts

Before we go to the summary, here are some facts you must get straight to help you manage your expectations:

#	Myth	Fact
1	Dropshipping is easy money.	To succeed, you must approach dropshipping as a real business.
2	There are no start-up costs.	You will spend money on things like your domain name, web hosting, platform, product samples, and ads.
3	It's illegal (a scam).	Dropshipping is legal as long as you comply with the local laws of any jurisdiction you operate in.
4	There's only one way to do it.	Dropshipping is synonymous with selling products sourced from China through AliExpress. However, there are more ways to dropship without AliExpress.
5	You can dropship anything.	You can dropship most products but not all. Platforms like Shopify provide a list of products you shouldn't dropship.
6	It only works for small businesses.	Large businesses like Amazon and Walmart partially dropship. Despite having a large network of warehouses across the country, they still rely on third-party sellers to sell some products on their platforms.
7	You don't have to know or talk to your customers or suppliers.	Fostering relationships with your customers is a great way to grow your business. Customers who love your products and services easily refer you to their networks. On the other hand, supplier relationships come in handy when you're in a fulfillment crisis.
8	It's too saturated to start.	Competition is the nature of business. This is why identifying and investing in the right niche is crucial to lower competition.
9	You must take a course or be experienced to succeed.	This is what "dropshipping gurus" want you to believe. Yet, there are numerous free learning resources on the internet. To be fair, though, not all dropshipping courses are bad. In fact, some can expedite your dropshipping education, but you must choose them carefully.
10	You need a huge social media following.	A huge following is a great way to maintain high ROI and lower your ad spend, but it's not required when you're starting out.
12	It only works if you live in the US.	Dropshipping can work for anyone in most parts of the world.
13	Shipping takes too long.	The distance between the product origin and the recipient's location determines the shipping time. The assumption that shipping takes too long is that most dropshippers sell Chinese products in America. The long distance lengthens the delivery time.
14	Nobody buys from a dropshipping store.	Anybody can buy from your dropshipping store, provided you exhibit great professionalism. This should start with your store design and extend to customer service.
15	Dropshipping is dead.	Dropshipping is NOT dead. However, it has evolved, and tactics that worked five years ago might work today. This is why you must never stop learning or assume you know enough.

Summary

Before we go, we've created a quick summary of this article for you so you can easily remember it:

• Dropshipping is not as easy as "gurus" make it seem. It has real challenges that you must overcome to succeed.
• Some challenges you can expect to face include thin profit margins, product quality and supplier issues, shipping issues, customer service issues, extreme competition, and difficulty building a brand.
• Despite all the challenges, professionalism, resilience, discipline, focus, and patience will help you succeed.
• There is widespread misinformation about dropshipping, but this article helps you bust some of the myths out there.
• Dropshipping is not dead. It has evolved to become more competitive, but there's always room for those willing to do the work.

• Dropshipping Mindset: 6 Things to Know Before You Start
• 10 Dropshipping Risks to Consider Before Starting Your Store
• The Pros and Cons of Dropshipping in 2025 (Is It Still Good?)

Plus, don’t forget to check out our in-depth guide on how to start dropshipping here!