Cover image for a scientific blog post related to why dropshipping is bad
Cover image for a scientific blog post related to why dropshipping is bad

Why dropshipping is bad in 2024: truth behind the failure rate

Dropshipping "gurus" say you'll make easy money and have lots of freedom, but it's way more intricate. The truth is, many businesses fail and customers end up disappointed.

TAKEAWAYStl;dr most important facts
  • 1. Find out why so many dropshipping businesses fail and what's really happening.
  • 2. Research is super important for new entrepreneurs. Without it, you're basically just guessing and hoping for the best.
  • 3. Picking the right supplier is crucial for any business. Think of it like dating; you wouldn't settle for someone who doesn't meet your standards, right? The same goes for suppliers.
  • 4. YouTube "gurus" and "bros" love to spread misleading info. They act like they know everything and promise you the world in 10 easy steps. They show off rented Lambos and Airbnbs, pretending they’re living the dream.

published 12 July 2024 on
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last updated 13 August 2024
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13min

Dropshipping seems super tempting. Picture Lisa, hooked by YouTube entrepreneurs showing off their easy wins, who jumps into the business, dreaming of quick cash with little effort.

Lisa excitedly watching a YouTube video about easy dropshipping wins (with a humorous caption showing her naive excitement)

But once she starts, she realizes she's not ready for the reality - the "guru" chilling on the beach forgot to mention all the hard work, such as market research and competitive analysis, that is necessary to actually succeed.

Lisa enters the crowded fitness apparel market, where her Shopify store struggles to stand out among many others selling the same products.

Without proper market research, she randomly picks products from AliExpress, ignoring the need for niche analysis.

A meme showing 80% dropshippers fail statistic (perhaps with a humorous twist about oversaturation)

The harsh truth is that 80% of dropshippers fail at this stage because they enter oversaturated markets and can't find their own space.

Recommendation by

Doing proper market research and niche analysis is key to avoiding crowded markets. It also boosts your chances of success.

Lisa is struggling to stand out and determine her pricing. She initially cuts prices to attract customers, only to find herself breaking even.

The e-commerce market is extremely competitive, with a BigCommerce study showing that 87% of online shoppers consider price a crucial factor. Lisa comes to realize that maintaining competitive prices while turning a profit demands constant vigilance and strategic adjustments.

This isn't the easy life she had envisioned.

Entrepreneurship, she learns, comes with its own set of challenges.

Recommendation by

Effective pricing strategies need constant tweaking to stay competitive and profitable.

Supply chain woes: delays and disappointments

Lisa's problems escalate when she starts handling her supply chain.

Lisa looking overwhelmed with a caption "When your AliExpress suppliers keep letting you down."

The suppliers she hastily selected from AliExpress keep failing her, resulting in products showing up late or not at all, which compromises the customer experience she aims to create.

Feeling down, she finds out that the majority of dropshipping complaints are about shipping issues.

In the USA, where big companies like Amazon have established a high standard with 2-day shipping, Lisa's customers are frustrated by long wait times, as waiting for a package to arrive can be a frustrating experience.

Recommendation by

Making sure you have reliable suppliers and clear shipping expectations can really boost customer satisfaction.

Also platforms like Meta, Stripe and PayPal - all crucial in today's online shopping experience, do prohibit dropshipping leading to bans and frozen money locked in for months.

Not knowing this before has cost her a substantial number of customers and bad reviews. High shipping costs have also hurt her profits, as she didn't consider the expensive international shipping from faraway suppliers.

According to Shopify's 2021 study, high shipping costs lead to cart abandonment, with 47% of customers dropping out due to unexpected fees .

Meme of a surprised cartoon character with the text "When you realize high shipping costs are scaring away customers"

As refunds and complaints accumulate, Lisa's profits are negatively impacted, overshadowing the few sales she receives.

Recommendation by

High shipping costs and delays can really hurt your business. Try using local suppliers to avoid these problems.

Ways to stand out in a crowded market

Lisa's efforts to improve shipping only help a bit.

However, another big problem is how to stand out in a market with lots of similar products. Since customers want more than just buying stuff - they want an experience and a reason to pick one store over another - creating a unique identity is crucial.

Recommendation by

Adding unique value and better service can make your store pop in a busy market.

She's thinking about personalization, like how custom phone cases or engraved jewelry sell for more and keep customers coming back. However, offering custom activewear would require time and money she didn't plan for.

Lisa also looks for exclusive product bundles, such as fitness kits with water bottles, resistance bands, and a workout guide. According to National Bureau of Economic Research, product bundling can increase profits by up to 30%. which could upgrade her offerings. However, it requires careful sourcing and planning to execute effectively. Also packaging is way harder.

Good customer service is another key to standing out.

Since Lisa is so busy managing her site, she hasn't set up a strong customer service strategy, missing a chance to build loyalty and satisfaction.

Recommendation by

Better customer service and unique products can really boost customer loyalty and sales.

Educational content presents another significant opportunity.

Lisa envisions her site featuring a wealth of workout tutorials and diet tips, thereby establishing her brand as a fitness authority.

A humorous meme about the unexpected challenges of creating educational content

However, creating this content demands more expertise and effort than she initially anticipated, showing another gap in her plan.

Recommendation by

Sharing useful educational content can make your brand look like an expert and attract loyal customers.

The bad reality of dropshipping

Dropshipping has a lot of unexpected challenges and tough realities. Lisa's story, like many other entrepreneurs, illustrates why dropshipping isn't great in 2024, for roughly 90% of businesses.

People often have unrealistic expectations because of flashy success stories, but it actually takes a lot of hard work. Essential steps like:

  • ->market research
  • ->supplier evaluation
  • ->adding value
  • ->customer support
  • ->proper brand authority

Dropshipping isn’t the easy money-maker it's often advertised as; it requires a significant amount of effort, adaptability to constant market changes, and a strong focus on customer satisfaction.

FUNNY MEME ABOUT EXPECTATIONS VS. REALITY IN DROPSHIPPING (LIKE A GLOWING SUCCESS STORY VS. SAD REALITY)

While the challenges are considerable, success is still achievable with dedication and perseverance.

Recommendation by

Dropshipping takes a lot of time, effort, and planning to work. Actually, like any other business.

Before getting started, it's essential to understand that dropshipping requires a substantial investment of time, resources, and careful planning.

Thinking dropshipping is a quick way to get rich is a risky misconception.

While there are lots of challenges and tough competition, building a successful business is still possible with realistic goals and a solid plan. It requires taking dropshipping seriously and putting in the necessary effort, rather than viewing it as an easy option.

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