4 Challenges of Running a Dropshipping Business
While the concept of dropshipping is nothing new, technology has made it accessible to the average person. It can be a great way to start an eCommerce business on a dime. However, it has a lot of drawbacks that you should be aware of before getting started. It’s not as easy as many people will have you think and you might actually do better if you go for a more traditional business model. Let’s take a look at some of the challenges of running a dropshipping business.
Returns
This is probably the single worst thing about dropshipping. Suppliers will be more than happy to sell items to you and ship them to your clients, but not all of them are crazy about handling returns. In some cases, you might have to handle them yourself, which will cause all sorts of issues. In the end, you will be at the mercy of your supplier, and the way they handle returns will directly reflect on your brand. And since their brand will not be compromised, you can’t expect that they will treat returns with the utmost of care.
This is why you should consider managing your inventory instead. You could try to get bulk discounts from your supplier and use a fulfilment centre like Zendbox. This way, you’ll have a professional team helping you track and manage returns in real-time. They take your brand very seriously and will be more than happy to handle everything for you as professionally as possible.
Inconsistent Suppliers
It’s not uncommon for people to never actually see their supplier’s operation. You’ll never know how good their finances are if they decide to change management, and you’ll never know the true condition of their warehouses. There might also be some inconsistencies in service. They might do great one day, then start taking longer and longer to ship orders. And, if they’re your sole supplier, you might end up in trouble if they suddenly vanish off the map.
Working with Multiple Suppliers can be a Huge Hassle
If you have a store selling all sorts of items, you might be working with multiple suppliers at once. This might seem like a minor issue, but what if one of your clients decides to buy items from different, unrelated suppliers? You’ll have a hard time explaining why you can’t send all the items in one shipment or tell clients that they can’t combine items.
No Control Over the Inventory
Another thing that can get annoying is that you have no way of truly knowing how much of an item you have in stock. One of your best sellers could run out at any given moment. It might never come back either. That could be disastrous for your business and lead you to close your doors. Work with a supplier that is trustworthy and transparent and be careful about relying on one product from one source.
While dropshipping is a great business model, it does have its flaws. This is why you need to be prepared for the challenges and consider looking at alternatives.
