Running a dropshipping store is no easy feat, and we understand that. There are plenty of pitfalls that can cost you money in the long run.
According to recent statistics, the global dropshipping market is projected to reach $557.9 billion by 2025.
With so much competition, it's crucial to avoid common mistakes that can harm your business.
In this article, we'll explore 12 ways dropshipping stores can lose money, from poor customer service to slow shipping times, and provide tips on how to avoid them.
Read on to learn how to keep your dropshipping business profitable!
1. Poorly designed website
One of the biggest ways dropshipping stores can lose money is by having a poorly designed website.
Your website is generally the first point of contact for potential buyers. So if it's not well-designed and easy to navigate, you'll likely lose those customers to your competitors.
Research shows that 38% of visitors stop engaging with a site if they find the layout unattractive or difficult to navigate.
And if your website takes too long to load, you could lose even more potential customers!
According to Google, if a website takes more than three seconds to load, 53% of mobile users will abandon it.
Another issue with a poorly designed website is that it can hurt your search engine rankings.
Google considers factors like website usability and page load speed for ranking websites. That means you can miss out on potential traffic and sales if you have a clunky website.
2. Not offering discounts
Another mistake dropshipping stores make that can cause them to lose money is not offering discounts to their customers.
Discount codes and special offers are great ways to incentivize visitors to make a purchase, especially when there is a lot of competition in the market.
But some of you may think it's counterintuitive to offer lower prices. After all, decreasing prices will lead to a decrease in revenue and ultimately hurt your business.
However, the opposite is true. In reality, discounts can actually lead to increased sales and revenue!
According to a survey by RetailMeNot, 81% of Americans are always looking for deals when shopping online.
When you offer discounts, you can attract new customers who are on the lookout for good deals, as well as retain existing customers who appreciate the savings.
And what's great is you can offer discounts in various ways, such as a percentage off, free shipping, or buy-one-get-one-free!
However, you must be strategic with your discounts and have a pricing strategy.
For example, it's best not to keep all of your products at a discount for the entire year.
This is because offering constant discounts harms the perceived value of your brand and questions the credibility of your dropshipping business.
Instead, offer discounts during specific times, such as holidays or special events, or for particular products to encourage sales.
Remember, offering discounts can be a powerful tool for your dropshipping business, but it needs to be done strategically and in moderation.
3. Selling only seasonal products
Focusing solely on seasonal products may seem like a good idea to capitalize on the demand for certain products during specific times of the year.
But it can do more harm than good.
By diversifying your product offerings, you can appeal to a broader range of customers and generate more consistent sales throughout the year.
That's why you need to consider adding evergreen products that can be sold year-round, such as phone cases or beauty products.
In addition, expanding your product range can also help you weather unexpected changes in demand or supply chain disruptions.
Since you won't rely solely on seasonal products, you're also better positioned to pivot your business strategy if needed.
So don't limit your dropshipping store to just seasonal products. Increase your offerings, and you'll likely have a more stable business.
4. Low-quality images
Using low-quality images is a common way dropshipping stores lose money.
When it comes to online shopping, visuals play a huge role in a customer's decision to purchase a product.
As it happens, Justuno found that 93% of users consider visual appearance the main deciding factor when making a purchase.
Using high-quality images not only increases the chances of converting a visitor to a customer, but it can also increase the perceived value of your products.
On the other hand, low-quality images can make your products look cheap and unappealing.
So investing in professional photography or using high-quality product images from your suppliers can make a massive difference.
So don't let low-quality images hold your store back!
Also, have you ever noticed how many online stores have the same product photos?
Yep, it’s a common problem.
Using those old, duplicated images from your supplier can actually hurt your store's visibility on search engines like Google.
That's where OnModel steps in. This Shopify app uses AI to transform your existing photos into unique images!
- Swap out the models in your clothing images (For example, according to your target market.)
- Put your t-shirt design on an AI-made model (No more costly photoshoots!)
- Change photo backgrounds
- Add faces to cropped images.
In short, OnModel makes your store photos unique and fun. So, if you're in dropshipping or POD, you can try it here!
5. Product description lacks information
An essential part of running a dropshipping store is to provide comprehensive product information.
Unfortunately, many dropshipping stores make the mistake of writing poor descriptions or copy-pasting them from suppliers.
A lack of information in your product descriptions can lead to confusion, making it more difficult for customers to understand what they are purchasing.
This can be a major turn-off for shoppers who want to make informed decisions before buying.
A survey by Salsify found that 87% of shoppers consider product content crucial when making a purchase decision.
Besides, a customer may return the product even after purchasing if the product description lacks important details and fails to meet their expectations.
To avoid this mistake, ensure your product descriptions are clear and provide all the necessary details. This includes product features, benefits, dimensions, materials, and other relevant specifications.
|Show, don't tell (create a relatable scenario).||Don't tell winding stories: keep things short and relatable.|
|Focus more on the solutions–what problems does the product solve?||Don't forget to add features/specs where necessary.|
|Write to your audience, in a language they understand and find relatable.||Don't be generic; let your passion for your brand shine through in your product description copy.|
|Make it scannable and easily readable; buyers should easily manage to find key product information.||Don't go overboard, especially by telling winding stories; keep things short and to the point.|
|Choose your layout carefully based on your product and target audience.||Don't forget to address and answer all relevant questions buyers may have about your product(s).|
|Use creative visuals where necessary.||Don't overuse product-related buzzwords.|
Related article: Top 28 Shopify Tips to Create a Great Ecommerce Store in 2023
6. Absence of product guide and size charts
Customers need to have a clear understanding of what they are buying, and without a product guide, they may not know how to properly use or assemble the product.
Similarly, without a size chart, customers may be unable to accurately determine the correct size for clothing or other items.
Providing customers with product guides and size charts also shows that the business is committed to providing a positive shopping experience.
Related article: How to Convert Asian Sizes to the US, UK & EU Sizes
7. Failure to build a brand
One of the most common ways dropshipping stores lose money is by not investing enough in building a brand.
In this highly competitive world of ecommerce, having a recognizable and reputable brand is key.
Not having a clear brand identity can lead to confusion among customers. This ultimately reduces the likelihood of them remembering your store or recommending it to others.
According to a survey by Nielson, 59% of consumers prefer to buy products from brands they recognize.
Plus, 21% are more likely to purchase from a brand they follow on social media.
This shows just how important building a strong brand is for dropshipping stores in 2023.
And the best part is; investing in branding doesn't have to be expensive! It only requires a strategic approach on your end.
Developing a unique logo, creating consistent messaging across all channels, and engaging with customers on social media are all effective ways to build a brand identity.
8. Not marketing products properly
No matter how great your products are, your sales will suffer if you don't have an effective marketing strategy.
According to a survey conducted by HubSpot, 63% of businesses say their top marketing challenge is generating traffic and leads.
SEO is an effective way to get your store noticed by potential customers. Optimizing your website for search engines can improve your rankings on search engine result pages and increase the store's visibility to potential customers.
Social media advertising can also be a powerful tool for driving traffic and sales.
Email marketing is another effective way to market your products. According to Statista, in 2020, the average return on investment for email marketing was $42 for every $1 spent. That's a pretty big number!
If you need any help with marketing, here are a few guides to help you get started:
- Recover 10x More Abandoned Carts With SMS Than Email
- Email Marketing for Ecommerce: A Beginner’s Guide 2023
- 9 Dropshipping Marketing Strategy Tips to Grow Your Business
9. Long shipping times
In the fast-paced world we live in today, waiting for a package to arrive can feel like an eternity!
Unfortunately, long shipping times are a common issue for dropshipping stores since most orders are dispatched from China.
This means that if your dropshipping store has long shipping times, you could lose out on potential sales.
To improve shipping times, you can consider using either or all of the following options:
- Working with local suppliers for faster dispatch and delivery times.
- Working with multiple suppliers to ensure a wider range of inventory and quicker shipping options.
- Asking your supplier to use reliable shipping carriers.
- Implementing an efficient shipping process.
10. Poor customer service
Providing good customer service helps to build trust and credibility with customers.
A study by PwC found that 32% of customers would cease doing business with a brand they adore after just one negative experience.
Poor customer service can lead to negative reviews, word-of-mouth damage, and, eventually, loss of revenue.
To avoid this, you must prioritize communication and ensure your customers enjoy their shopping experience.
This includes responding to customer inquiries on time, offering solutions to any issues or complaints, and going above and beyond to exceed their expectations.
Investing in quality customer service can not only help retain current customers but also attract new ones through positive reviews and referrals.
Remember, a happy customer is a loyal customer!
Related article: The 10 Best Shopify Apps for Customer Service in 2023
11. Slow returns process
According to a survey by Narvar, 96% of customers said they would shop again with a retailer based on an easy returns process.
So when customers are unsatisfied with their order, they want the ability to easily return it for a refund or exchange.
If the returns process is slow and complicated, it can lead to frustration and negative reviews. And this can ultimately harm the reputation of your dropshipping store.
The best way to avoid losing money due to a slow return process is to have clear and concise return policies.
This includes providing customers with easy-to-follow instructions for returning products and clear communication throughout the returns process.
When you provide a seamless returns process, you can expect to see increased customer satisfaction. And we're sure you'll see repeat business and positive reviews!
Chargebacks are one of the worst ways dropshipping stores lose money since you have little control over it.
A chargeback occurs when your customer disputes a transaction and requests a refund directly from their bank instead of contacting you.
This can happen for multiple reasons, such as fraud, dissatisfaction with the product, or a misunderstanding of the billing process.
According to a report by Chargebacks911, the average chargebacks cost the vendor $191 in a year.
Moreover, they can lead to additional fees and penalties from payment processors and damage the store's reputation.
But here are some steps you can take to prevent chargebacks:
- Improve customer service.
- Ensure accurate billing.
- Informative product descriptions.
- Offer a straightforward returns process.
In addition, using chargeback management tools like Chargeflow can help merchants recover lost revenue and prevent future chargebacks.
Chargeflow offers an automated solution for managing chargebacks to determine the likelihood of recovery for each disputed transaction.
By clearly understanding your cash flow and forecasting expected revenue, Chargeflow can help your store reduce the impact of chargebacks on your business!
Before we go to the final verdict, we've created a quick summary of this article for you, so you can easily remember it:
- A poorly designed website can result in losing potential customers to competitors, lower search engine rankings, and, eventually, a loss of revenue.
- Offering discounts strategically can attract and retain customers, increasing sales for dropshipping stores. But offering constant discounts harms the brand value and questions the business's credibility.
- Diversifying your store's range with evergreen products can generate consistent sales year-round and appeal to a broader range of customers.
- You can lose money using low-quality images, poor product descriptions, and not adding product guides and size charts.
- Using low-quality images, poor product descriptions, and not adding product guides and size charts can result in lost revenue.
- Investing in branding doesn't have to be expensive.
- Long shipping times, poor customer service, and slow returns process can harm the reputation of your dropshipping store, leading to negative reviews and loss of revenue.
- Chargebacks can lead to significant financial losses and reputational damage for dropshipping stores. But improving customer service and using chargeback management tools like Chargeflow can help prevent them.
Running a dropshipping store requires attention to detail and a focus on customer satisfaction.
By avoiding these 12 common mistakes, you can ensure that your business stays profitable and continues to grow.
From improving your website design to providing fast shipping and excellent customer service, there are many ways to improve your likelihood of succeeding in the competitive world of ecommerce.
Remember, even small changes can make a big difference in the eyes of your customers!
So keep learning and always be willing to adapt to new challenges and opportunities.
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