In the eyes of anyone researching dropshipping it can be mistaken as an extremely low risk business model. This is mostly because everything you are reading has a purpose. The purpose is to get you to buy into a dropshiping course. However, don’t be fooled into thinking dropshipping comes with no risks. So what are the risks of dropshipping?
As with any business models there are risks and you need to be aware of the risks before starting so you don’t end up in a situation that you don’t want to be in. Dropshipping methods and strategies are always changing and the risks change with them. Without any further a due let’s jump into some of the risks of dropshipping you might face.
The first risk and probably the most problematic is unhappy customers. Basically, all the risks that will be mentioned below all relate to unhappy customers. It is extremely stress full having customers unhappy with your products service or shipping times. It can be gut wrenching at times.
The reason I say unhappy customers are a very big risk in dropshipping is because of the risks that I will mention below. If you want to learn how to avoid customer complaints before they happen then read my blog post here.
In the nature of the dropshipping model you have no control of quality of each and every product that you sell to your customers. Most of the time you wouldn’t have even purchased the product you are going to sell. You could be selling a piece of junk for all you know.
This has happened in every dropshippers journey where they have gotten to excited over a product and just blindly imported it to their store. If you haven’t taken the correct steps before selling a product then you are going to deal with not only unhappy customers but extremely angry ones.
Shipping can become a huge risk when you are dropshipping. Through my experience I have run into so many issues with shipping.
Shipping times are often very long as the products are coming from China. It can be hard to compete with customers that have similar products in the USA and can ship with in a few days.
Secondly, it can become pretty common for packages to get lost in the mail. This becomes a problem when you are trying to communicate with a customer and then trying to get information from AliExpress suppliers and you can end up losing a lot of money on refunds to customers without getting refunds from the AliExpress suppliers.
Shipping times range between 2-5 weeks normally and that leaves a large gap for the customers to expect a delivery. Customers tend to get agitated when they have to message you all the time or track their parcels all the time.
RETURNS AND REFUNDS
A big risk for any e-commerce store is the percentage of customers that ask for returns or refunds. Your percent of returns and refunds with dropshipping will be much higher. The reason for this is because of the shipping and quality risks you will adopt above.
If your product doesn’t arrive within the shipping times you mentioned you might find yourself having to refund customers even if they will eventually receive the product they ordered anyways. An adamant customer threating reviews will have you refunding regardless of the situation.
When it comes to returns with dropshipping it becomes a huge issue and really difficult thing to navigate. Your customers will have to send it back to the dropshipping suppliers and again you become the middle man in all of this and most of the time you end up losing money and never receiving a refund from your suppliers.
In addition to the above-mentioned risks there also comes which what will be our next risk which is scammers.
It’s a very sad world we live in. Trust me you will run into scammers of all shapes and forms. When I say scammers, I don’t mean people stealing all your money from your bank account.
I am referring more “subtle scams”. These are the worst forms of scams and it happens so often. How these scammers operate is they order your product and pay for it just like a normal customer would. Once it arrives, they will do everything possible to dis credit your product and get a refund. The product won’t even have anything wrong with it and so they will get their money back and have free products and you lose money.
In addition, you will get loads of “marketing agencies” trying to sell you services or offering you really good deals.
There are risks associated with any business model you may undertake. It’s important to see these risks for what they are and don’t let the articles you read online deviate you from seeing the realities of what dropshipping can be involve at the worst-case scenarios. Risk can be eliminated but you have to first know what they are. Now that you understand some of the risks you can read my blog and ways to minimize these risks.