Dropshiping is unarguably one of the most remarkable things that have resulted from the internet and our new way of life. It is a new business model that allows smart entrepreneurs to take to ecommerce with little resources and still make headways. While the benefits are enormous, dropshipping has inherent challenges. As entrepreneurs, dropshippers are expected to handle the challenges that come with the business model. Here, we will discuss seven of the commonest challenges associated with dropshipping and how you can overcome them:
The first major challenge most people face in dropshipping is the challenge of finding reputable suppliers. There are so many producers and sourcing agencies that can serve as your suppliers, but you need to be on the same page with them on the details of the relationship. You need to find reputable suppliers that can be consistent with the quality of their suppliers.
It is somewhat easy to find suppliers in almost any niche you choose. There are numerous resources that can help you with the search. Just make sure you choose a supplier that can meet your needs. Consider such factors as supplier fees, order minimums, expert industry knowledge, and scalability.
Running Out Of Stock
This can happen when you are already in business. It is one of the commonest problems and is more prevalent in certain seasons. This challenge also affects businesses that have only one supplier most. You may not experience the full consequences of running out of stock if you are working with a very big producer and order Fulfilment Company. When you run out of stock, it is important that you inform your customers as early as possible, even as you find alternative means of fulfilling their orders. Having more than one supplier is advisable.
Delay with Order Processing
When customers buy something from your ecommerce website, they expect their order to be processed as soon as possible. Most customers don’t understand that the speed of processing the order, most of the time, is not in your power. There are instances you will experience delay with an order you have already placed with your producer. Such delay may create some sort of tension with the customers as they wait for their tracking code. Don’t let it linger. Once you don’t hear from your supplier 24 hours after placing an order, get in touch to sort it out. When you make inquiries, you will know, at least, why the order is yet to be processed and how much longer you have to wait. Pass the information to the customer to pacify him/her.
Supplier Transparency and Compliance
You are the face of your business, and your customers will hold you responsible for the quality of the goods they receive when they buy from your store. Now, you are hardly involved in the production and packaging of the goods you sell through dropshipping, but you are still responsible for them. One way to handle this challenge is to have a strong service level agreement (SLA) with your suppliers. You need to clearly state what you expect from them in terms of compliance with the agreement. The consequences of violating the SLA should also be spelled out. Take every complaint raised by a customer seriously and find ways to ascertain that your suppliers are always adhering to the SLA guidelines.
Shipment to Wrong Address
As awkward as it sounds, some orders are shipped to either the wrong address or addresses that don’t even exist. That is another major challenge you may have to handle as an ecommerce entrepreneur. The best way to handle this problem is to ensure that address mistakes don’t come from your end. It is necessary that you double-check the address you send to the supplier for each order. You should also hold some sort of proof of any shipping address you supply.
This is something you can’t escape in ecommerce. Most often, it is never your fault since a third party is always involved in dropshipping. You can’t also make all the rules here. Suppliers have different ways of handling returns, and you must find ways to communicate that clearly to your customers. Just know that your customers will come to you and not the supplier. Spell out the return policy on your website clearly. Put in every necessary effort to make the process smooth for your customers too.
Managing the Numbers
From inventory to billing, you will find out that managing the numbers can be really challenging, even in dropshipping. Pricing is another important factor when it comes to getting it right with the numbers. Obviously, you can’t handle everything about numbers the processes will throw at you. The right thing to do is to invest in the appropriate technologies for these. Automating each process will make things easier and give you the time to focus on making important decisions to grow your business and attend to other important issues.
Just like other business models, dropshipping presents lots of challenges. These seven discussed here are common. Overcoming them will help you in many ways to grow your ecommerce business. Contact us today at Fulfillman if you need a reputable fulfillment services company for your ecommerce or dropshipping business. We are a leading provider of various services including Warehouse fulfillment, Drop Shipping, Third Party Logistics, Crowdfunding Fulfillment, China sourcing, and so forth.
Our services are well-detailed, reliable, and highly professional. Our trusted experts will be available to speak with you and discuss your needs. We will provide suitable answers to your questions and concerns. With us, you are guaranteed to get quality and excellent services that give complete client satisfaction.