Dropshipping And Why I Quit Doing It

Dropshipping is a great way to start an eCommerce business. It doesn’t cost much to start and is easy to get going. You don’t even need a website, but it certainly helps to have one.

I started dropshipping with Shopify and Oberlo. Oberlo syncs my Shopify store with products from a Chinese website called AliExpress.

Oberlo tracks inventory and automatically updates any changes in price. You can basically run your store on autopilot until orders come in.

When orders arrive, you go to the vendor’s website and order the product and use your customer’s address for the vendor to ship directly to the customer. You will also have to provide customer support.

big container ship with text why I quit dropshipping

Another way to start a dropshipping store is with WordPress + Woocommerce + AliDropship.

In this post, I’ll be discussing my short time drop shipping and why I decided to quit doing it.

PricePointWholesale is a website I started to try dropshipping. You can check it out, but I disabled Shopify payments, so you won’t be able to buy anything.

I’ll be revamping or scraping the website to build a better eCommerce store with WordPress + Woocommerce soon.

Here are some products from my store.

homepage of pricepointwholesale showing 8 products for sale

 

What is Dropshipping?

In simple terms, dropshipping is a business model in which you’re selling a product without holding any inventory.

Customer orders from your store or link, you then buy it from the vendor, who then ships it directly to the customer.

Here are the pros and cons of dropshipping:

Pros:

  • Low Start-up Costs
  • Easy to Start
  • No Physical Expenses

Cons:

  • Slow Shipping Time
  • Supplier Issues
  • No Control

 

What My Unoriginal Idea Was

What many dropshippers will tell you when starting a dropship store is to start in a small niche and they are right. It’s a lot less competitive.

I decided to stick with a general store because I’m also using PricePointWholesale for Amazon FBA as well.

Since Oberlo gets its products from AliExpress in China, I decided it was a good idea to source products that cannot be found on Amazon, Walmart, or any other big-brand retailer to sell on my store.

The products also must come in ePackets for the fastest shipping, which can take up to three weeks to arrive from China.

ePacket is a shipping option by merchants in China and Hong Kong, designed for eCommerce to make it more affordable and quicker for customers to receive their purchases.

Turns out my idea wasn’t so original at all. I later found many other dropshipping stores doing the exact same thing.

The only competitive advantage I had was fast customer service. I handled customer service inquiries within minutes.

 

The Website And The Process

Here’s the process of starting my dropshipping store:

  • Find a Niche or General Store
  • Sign Up For Shopify
  • Customize The Website
  • Install Oberlo
  • Add Products
  • Start Marketing
  • Handle Customer Support

Starting my dropshipping store was easy with Shopify and Oberlo. It probably took me only a few hours to have everything up and running.

I signed up for the basic Shopify plan which costs $29/month. I didn’t forget that this plan also includes a 30 cents per transaction fee. This adds up quickly and cuts into the margins.

In order to cover all my expenses and still make a profit, I had to increase prices per product by quite a bit.

I also did very little marketing for PricePointWholesale, but still got some sales and questions about some products on my website.

 

Why I Quit Doing It

The reason why I decided to stop dropshipping is too many things can go wrong and I didn’t have much control.

I left a note to every supplier that I’m dropshipping in Oberlo to please do not include their brand or any promotions in their packaging.

I even emailed the supplier again as a reminder when a customer made an order. Many suppliers did not respond and one supplier ran out of inventory, even though Oberlo says they have the product in stock.

I had to quickly find another supplier or refund the customer. Refunds are not fun.

A few customers complained they received their products with cheap packing and it took way too long to arrive. Three weeks is a long time even with ePackets!

Another reason is more and more people are catching on to Aliexpress and Alibaba.

Dropshippers are just middlemen and savvy online shoppers will cut out the middleman and go directly to these Chinese websites instead.

I’m sure there are many dropshippers that are making a good profit, but the margins were too slim for me at around 15%.

Perhaps I could have raised my prices even more, but I just felt like I would be ripping people off. And that’s not a good way to build a brand.

 

Conclusion

Dropshipping is a great business model to start in eCommerce. It’s easy to set up with low expenses.

But too many things went wrong with my dropshipping store. Perhaps some mistakes could have been avoided, but I rather work on more fun things, like this blog anyway.

Thanks for reading!

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