8 Reasons Why You Should Not Build A Drop Shipping Business

The World Doesn't Need Another Drop Shipping Website

'Twas Christmas Eve and as I passed by the smiling carol singers decked out in their Christmas hats and scarves the beauty of the moment struck me.

The tall Christmas tree adorned with glittering baubles towered over the dwindling gathering of last-minute shoppers and bargain hunters who had come to pad out their stockings. The light rain glistened in the bright lights and early evening gloom.

I stopped and listened awhile, before finally making my way home and wrapping my last minute presents. Placing them under the family tree, as I have done for years. The visits to the local watering hole may now be long in the memory, but there is still a quaint charm in visiting these ghastly concrete relics festooned with their seductive “sale” banners. £1.10 to park to boot. Bah Humbug!

I settled down purposefully on the sofa and began to prepare myself for the festivities. With five grown-up kids and six Grandchildren, Christmas is anything but peaceful in the Cooper household, and I gratefully receive the gift of “me time”.

I spied the box of Christmas Truffles kindly sent to me by EKM, and they beckoned me to open them. I removed the sleeve and as I opened the lid the white chocolate in the centre did a merry dance. Did my eyes deceive me? I thought for a moment before settling on the dark hazelnut, and as I reached out for it, the white champagne truffle did its merry dance again, and in a flash, I ate it.

As I closed my eyes to savour the taste the spirit took hold of me.

“Come in and know me better, man,” said the spirit and he pervaded my deepest and darkest thoughts. The ghost of Christmas present had come to haunt me.

christmas 2107

Every Day A Shipping Container Falls Into The Ocean.

I'm not making this up. The World Shipping Council estimated that between the years 2008-2010 there were approximately 350 containers lost at sea. This does not include catastrophic events like the MV Rena which lost 900 containers when it grounded off New Zealand in 2011. Container losses are increasing year to year.

Can anyone not be moved by the images of starving Polar bears roaming hundreds of miles to find food as the glaciers slowly melt away around them. 

Or whales stuffed full of plastic bags that irresponsible humans have carelessly discarded. Or the 12 million tonnes of plastic that gets thrown into the ocean Every Single Year? 

Or the 80% of fish that are estimated to disappear from the Pacific Islands due to climate change by the end of the century.  

So What? You May Say.

What does this have to do with me and my drop shipping business?

Drop Shipping is a race to the bottom. It's the pursuit of profit for doing the minimum amount of work possible and ignoring the environmental damage. 

Any society that wasn't beholden to the pursuit of profit would be able to see that drop shipping millions of low-quality products from China all over the world that are mass produced on low wages is commerce gone wrong. People can send thousands of goods globally just by pressing a few buttons without creating anything worthwhile to society whatsoever.

The damage to the environment is culpable. Plastic wrapping, plastic goods, carbon emissions, lost containers – it is rampant consumerism gone insane.

The problem rests of course with those in power and their inability to be able to stem the thirst for business. The H2 railway is a prime example. The expansion of Heathrow Airport when the skies are already overcrowded with poisonous, carbon-emitting planes is another.

President Trump's ignorance of Global warming another. The North Korean wanton missile testing another.  And on and on.

But if those with the power to change the most are the most powerless and impotent to change then the onus falls on the individual to try and make a change no matter how futile it may seem. Taking your refillable plastic water bottle to the restaurant is a step in the right direction even though thousands of plastic objects are flushed into the ocean instantaneously. 

The future is a dystopian one and turning back the tide of human waste and neglect is probably too late for us as a race. The ghost of Christmas present will despair that he is not the ghost of Christmas future. From the garbage we have left floating around in space to the plastic microns ingested by microbes in the deepest oceans, humans have already shown our intellectual feebleness. 

But while we live and breathe we should strive to fulfil our values and do our work to the highest standard we can. For what other reason is there to live? 

8 Reasons Why You Should Not Build A Drop Shipping Business.

1. Wholesale Cost 

Purchasing single items is going to be a lot more expensive than buying in bulk. Wherever possible you should buy stock in quantity to get the best available price; you can't do that with drop shipping. 

If you don't have any money then drop shipping is a terrible way to try and get started in business. Try affiliate marketing instead and read this: 

Category: Drop Shipping
"If everybody could do it, they would" is the old saying. But it's not true. Even when presented with a golden goose that lays the golden egg every day,...

The potential for creating websites that cater for clearance stock and “end of line” goods offers much more potential and profit margin. Sure, you have to do the work to market your site, but you'll have to do that anyway. All the skill in eCommerce begins with getting traffic to your site

For this type of site, you should focus on building a mailing list and specialising. Put your effort into researching and sourcing product and creating a contact network using Linkedin because that's what most people who want to build a drop shipping website won't do. That's your market advantage right there.

2. Doing The Work 

People who want to develop a drop shipping business do it because they think they want to do the least amount of work possible. However, having your drop shipper package and send out your goods gives up complete control over product quality and shipment dates. It also adds to the overall bottom line. 

Packaging the goods yourself gives you so many more opportunities to develop branding and include special offer leaflets or other marketing material. Blank unbranded packaging is a lost opportunity to build a rapport with your customer. Unless of course, you don't care what the customer thinks when the goods eventually arrive, which as a drop shipper you probably don't. 

3. Long Delivery Times

Just because the products are cheap does not mean a customer is going to wait 30 days for it to be delivered from China. You'll have to make it clear on your website that you have longer than usual delivery times and hope that the lower price satisfies the customer. Otherwise, you'll be inundated with delivery time enquiries

4. Uncontrolled Product Quality

If you don't see the product before it is shipped how can you vouch for the product quality? China is renowned for producing inferior goods because of its mass-produced low wage culture. 

Of course, that's not always the case, and you may blindly choose great quality products. Not having any quality control is the sign of someone who only cares about profit and nothing about the customer experience.

5. Returns and unreceived items 

Returns can kill your business and if you stumble across a poorly made product that will be the end for you. But also consider that payment processing operators like Paypal always side with the customer when it comes to disputes, if an untracked package does not arrive then you'll be out of pocket, and this happens regularly.

6. Profit Margin 

Profit margin is the reason your drop shipping business will ultimately fail. Because you don't have enough margin built in to cater for losses. 

You need to apply a 3x markup to grow your business. Goods you buy for £5 retail at £15. That way one sale will cover one return, and one lost package. If you are working on lower margins, then returns and unreceived items will kill your business quickly because you have to sell more to break even. People who run a drop shipping business want to scale up fast, but really, all they are doing is compounding their problems from a flawed business model.

7. Non-Scaleable

An eCommerce business can be scaled up by gaining greater purchasing power, negotiating better deals and making more sales. A pure play drop shipping business will only have increasing sales as a method to grow.

Can you imagine facing Peter Jones in Dragons Den with your business idea? He'd laugh at you. No stock, no branding, no creativity, nothing.

8. Facebook Advertising 

Most drop shipping websites are powered by Facebook advertising, but the cost of this is being driven upwards as more people pile into the marketplace. If you were thinking of relying on Facebook as your source of traffic, then you are probably too late to the party.

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Happy Christmas And May The New Year Be A Prosperous One For You!