Why Dropshipping Is Not Worth It?
I’m a full time affiliate marketer and I love it.
I mainly do amazon affiliate marketing in most cases. When Amazon deducted affiliate commission during COVID time, I thought about trying dropshipping.
I tried dropshipping for the first time and this is my experience about dropshipping.
I setup my dropshipping business with Alidropship plugin. You can read my alidropshipping plugin review here.
There are few good thing and bad thing about dropshipping and I’m going to share both of them here.
Good thing about dropshipping:
- Easy to setup: If you want to start dropshipping, you literally need few things. Dropshipping basic knowledge, Online store, and a supplier. That’s it. You don’t need to worry about complicated tech, inventory, and all. You can set up a dropshipping store in few days with the help of the alidropship plugin.
- Profit Margin: Profit margin is quite subjective, to be frank. Compared to affiliate commission, we could keep a much better profit margin than affiliate commission in dropshipping.
These are the only two pros I can find about dropsshiping.
My Profit Margin is Higher in Dropshipping Model compared to Amazon Affiliate Commission:
I started dropshipping only because of the amazon affiliate commission cut. I noticed whatever the product I’m selling on Amazon, the same product is available on aliexpress, so I thought, why not give it a try? And I tried dropshipping model.
When I first started dorpshipping model I was enjoying alot.
You know why?
Because with amazon’s affiliate commission, I used to earn $0.90 to $2 per sale, here for the same product, I started earning $15 to $20 per sale. That’s like 20 times way more profit than what Amazon used to pay me.
I’m happy with the initial result.
It would be best if you kept in mind that I’m not deducting TRAFFIC cost in the profit. It’s because I’m not doing any paid ads.
I’m sending traffic from my Niche site to this new dropshipping store created with the alidropship plugin. So I’m not spending any money on paid traffic here. So whatever the earing from the dropshipping site is pure profit for me.
All things are going good for few days.
After I start getting more and more orders, I started realizing dropshipping is really not for me.
Here’s Why I Quit Dropsshipping Eventhough Profit Margin is Higher than Affiliate Marketing?
After trying to make money with a dropshipping model, I decided this business model is not for me because of the below reasons.
1) Shipping Time:
I started dropshipping during COVID time. So because of the COVID issue, everywhere shipping is delayed. Customers need to wait for a minimum of 20 to 60 days to get the product from aliexpress to the customer’s location.
In 2020, customers can get products within 2 days; why do they need to wait for so long to get the product? Because of late product delivery, all sorts of issues started happening. Like, refund, customer support, tracking, disputes, and more. It’s a big headache if you don’t have a team of users who handle all of this stuff individually, or else you will get burned out handling these issues.
2) Seller Response Time:
When customers ask about product status or any questions about the product, you again need to contact the original seller to get a response from them.
The thing is, sellers on aliexpress are too lazy to respond to your questions. They usually take around 3 days to respond to your query, and the funny thing is, they don’t even understand what question you have asked, so you cannot expect the right answer to your query.
So your customer service is dependent on original supplier, not just you.
3) Customer Support Headache:
If you are doing dropshipping from China to other countries, then be ready to handle customer support headaches, especially if you are alone handling customer support issues.
Plenty of issues will come with dropshipping and if you don’t have a team/virtual assistant to handle support issues, then it will be difficult to run your dropshipping business.
4) Paypal Disputes:
Not all customers contact you for a refund, some customers directly go and raise Paypal disputes, and PayPal mostly favors customers over you.
You need to know that when Paypal refunds any customers, you have to pay Paypal transaction fees from your end. So you will lose Product cost + Paypal transaction fee as well.
The more refund request you get, the more faster way to get your paypal account shutdown.
5) Traffic Cost:
All dropshipping site owners use Paid traffic to make sales. So if you are not comfortable with paid traffic, then dropshipping is not for you.
In my case, I have traffic, and I directed that traffic to my dropshipping site, so my profit margin is a little higher, but if you use paid traffic source, then obviously, you get less profit.
6) Not for Solo Users:
In the dropshipping business model, there are many moving parts like product sourcing, paid traffic, customer support, product tracking, etc.; if you a solo user trying to do dropshipping, keep this point in mind.
You need team with proper system to scale you dropshipping model or else you cannot scale with this business model.
7) Customers are Not Happy:
I’m, generally speaking, most dropshipper ship products from China using Aliexpress. If that is the case, you cannot serve customers properly in most cases because there are a lot of variables you cannot control. If we are not adding any value to our customers, then what is the point of running a business?
I understood this after running my dropsshipng site for few months and I decided this is not somthing I enjoy.
8) Some users don’t like product coming from China:
This is hard truth.
Many US customers don’t like their product coming from China for one or another reason. If you mention it ships from China or something like that, then ready to take a hit on your sales.
9) You cannot Mention Real Delivery Time:
If you mention real delivery time on the product page or checkout page, then again, no one will order from your site. No one likes to wait 20 days to get their product.
10) Fake Sellers on Aliexpress:
If you notice aliexpress, there are some seller mention product ships from the USA like that. In reality, all product still ships from China itself. And it takes almost the same delivery time, but your tracking website starts showing tracking details only after the product reaches the USA. It takes 7 days to get the product status to start updating.
Before that time be ready to get paypal disputes, customer service emails regarding product status.
Conclusion:
This is my personal experience me trying Aliexpress to drop ship products to other countries. There are many other types of dropshipping business models out there. I’m not telling all dropshipping models will have issues like this. If you use a good supplier, you may not face all the above issues, but I still think you will definitely face a few of the above issues even if you got good suppliers.
The thing is, if you compare dropshipping to affiliate marketing. I always recommend Affiliate marketing hands down.
