When you think of drop shipping, does the phrase "passive income" come to mind? You know, making money while you sleep? Working from a beach? Well, I can't speak for other passive income models, but drop shipping is nothing like that. It can be a real nightmare.
In a previous post, I explained that, for ethical reasons, I closed my successful drop shipping store. However, even if you don't agree that drop shipping is an unethical business model, it is still full of practical issues. If you are considering opening a drop shipping store, here are three reasons why you should reconsider.
If you're the type of person that values your customer and genuinely wants to make them happy, you're really not going to like drop shipping. When things inevitably go wrong, you can expect plenty of emails like these.
I tried my best to reduce these types of emails. I had a disclaimer on the main page of the website, a detailed FAQ page, and helpful information sent in every purchase confirmation email. As far as I can tell, drop shippers will always have to deal with emails like this.
Customers expect to be taken care of, and they have every right to be. After all, they're the people responsible for your profit. However, with drop shipping, it's simply impossible to fully "take care" of your customers since you're not the one shipping the product.
Customer support can be stressful, and I'm just not saying that because my store had a 24-hour reply guarantee. Eventually, the stress of replying to emails like the ones above caused me to sleep, since when I woke up, I knew I'd have more complaints that I could do nothing about.
Dealing With Suppliers
Most suppliers that I chatted with spoke very little English. In order to understand each other, we would often have to message each other back and forth, which as you can imagine, isn't very efficient. And since my supplier's time zones were exactly 12 hours ahead of mine, communication was even more of a struggle.
A lot can go wrong when you're not in control. While drop shipping, you have to remember that you're just a middle man. All of the dirty work is completed by your suppliers. Thankfully, I was able to source all of "my" products from only two different suppliers, both of which were responsive.
Even though I had awesome suppliers, they still ran into issues. Shipments were often delayed, mixed-up, or completely lost. I don't blame them at all; I knew what I was getting in to and understood why there would be trouble. However, getting customers to understand is the hard part.
Refunds & Returns
As you can see from the emails I got from customers, it's not uncommon for them to demand a refund or request to return their item. Based on my experience from running other e-commerce stores, I know for a fact that with drop shipping, refunds requests are more common than usual. Since customer service was already enough of a pain, I usually granted every customer a refund if they asked for it.
Returns are already a hassle when only two parties are involved, now try to imagine what it's like for drop shippers. You basically have two options, ask the customer to send the product to your own address, or hope that your supplier will take it back, both of which can cost you. Since I didn't want to deal with it, I just gave every customer a refund instead of a return, and just shipped them a brand new product.
If after reading this post, you still believe that the benefits of drop shipping outweigh the caveats, then I encourage you to continue researching before giving it a try. Since I was only in business for about a month, I only wrote about the issues I personally experienced. There were plenty of problems that I didn't run in to.
There are plenty of other online-business options out there. If you're interested in making money online/from home, I encourage you to scratch that itch, but please find something more practical (and hopefully ethical).