So you wanna start a dropshipping business huh?
You probably want to get started because you saw a flashy YouTube video of some young guys or gals livin’ it up in LA not having to do any kind of work because they have a fully automated dropshipping business and you were wondering maybe you could do the same thing.
We don’t blame ya, it’s totally normal for anyone to want to get started in a business opportunity like that.
And we don’t wanna be jerks or anything, but we do want to kind of bring you back down to earth…
There are some things you need to understand about the biz and yourself before you fully commit to dropshipping.
After you read about these reasons, we’ll talk to you a little bit an online business model that just destroys dropshipping in logistics and profits…
But without further ado, let’s get into it!
Here are the TOP 5 REASONS DROPSHIPPERS FAIL!
If it’s one thing that’s one of the biggest issues with dropshipping, it’s picking the niche.
Or lack of picking?
Look picking a niche for anything can be super stressful and there’s two ways this has predominately gone wrong.
The first is that dropshippers pick the wrong niche to start, and when sales don’t come through, they don’t want to admit defeat and instead shell out even more money on paid advertising, eventually leading to a tanked dropshipping biz.
Sometimes there’s just a bad niche, in fact, a lot of them will not work out for you.
Listen to any kind of dropshipper on any blog or youtube who does one of those “Dropshipper tells all” styled videos…
Odds are they’re going to tell you that they’re typically successful in 1 out of every 10 niches they go into.
For them it’s not that bad because that one niche usually makes up for the 9 other failures, but let’s get real here again…
Most people, and probably yourself reading this, don’t have the 10-20k it would take to successfully launch 10 different products.
Paid traffic is no joke and it can run up a bigger tab than a party in LA on St Patty’s Day!
The second is that they wont even pick a niche to get started in!
Let’s face it.
If you are trying to earn your way to financial independence, odds are you’re currently financially dependent on your 9-5, so you don’t have a whole lot of money to play with.
What we’ve seen a lot is that people will pick two or three good prospective niches but never take action on them…a failure to launch if you will…because they suffered from paralysis by analysis.
Another reason why dropshippers fail is because they’re not patient enough.
You see, people will get very excited and super hyped up when they first start. And that’s not a bad thing…but they oversimplify everything about it.
Between the research, testing, and launching…a lot of time is going to pass. It’s not just as simple as hopping online, dropshipping a type of product and waking up to $1,000 in your store account.
In fact, most dropshipping stores don’t turn a profit for at least 6-12 months…and that’s not 6-12 months of half assing it, that’s 6-12 months of going at it hard, day after day after day.
You’ve heard of new years resolutions right?
And you know how quick people forget all about them right?
The same kinda goes for dropshipping.
A majority of people quit 30 days or less because all the see is a money pit when sales don’t come in.
Unfortunately, sometimes people pick the right niche, and have the patience, but they just don’t have enough capital to last long enough before they turn a profit.
You see most people like the idea of dropshipping because they don’t have to have hardly any initial investment upfront for the products themselves.
We’re talking maybe a couple hundred bucks.
What people really don’t factor in however, is paid traffic. Yeah, this stuff really sneaks up on ya.
If you google it, we did, you’ll see that most dropshippers recommend spending $5 a day in paid advertising.
With all due respect…that’s just kinda what they say to rope you in.
If you listen to any of the dropshippers on youtube, they’ll tell you that they spend thousands a month, a few even thousands a DAY in paid ads.
You’re not going to get rich off of a $5 dollar ad spend.
Has it happened? Sure.
Is it the norm? HELL NO!
Now all that to say, most of you guys aren’t going to be able to spare thousands of dollars a month in ads to turn the 6-figure profit that most of these youtube dropshippers flaunt around.
And when a lot of people come to that realization, they end up quitting and their dropshipping business venture fails with them.
The best solution to this problem is to use multiple platforms to market the product and the one that provides the most ROI, use it further on.
Another common reason why dropshippers will fail is because they choose the wrong ad platform for their target market.
If you waiver from those popular platforms, odds are you aren’t going to see too much sales.
Beyond that, you could also have a horrible sites design.
Most people use Shopify and that has been beneficial to numerous dropshippers.
But if you try to make it your own, or try some really obscure website builder no one has heard of, it might not look professional to people and thus you won’t see sales nearly as high as they could be.
Another reason why dropshippers fail is that they have a huge misconception of how much money they might make from the start.
On all the youtube videos or blogs promoting some dropshipping course they’re all to happy to share their screenshots of $100,000 in sales or even a million in sales.
But here’s the thing…they’re not pocketing that amount.
And if you ask us, that’s kind of misleading.
Their profit is made in the margin.
For example, let’s say that they sell a t-shirt for $25 on their site, when a purchase comes through, they find that exact t-shirt, and buy it for $20.
They make a $5 net profit…but out of that will likely come other expenses like shipping and ad spend refill.
So, as you can imagine, the real profit from all those big numbers is actually going to be quite small.
And that’s the misleading part, they’ll show you all these big numbers and all these crazy yet real screenshots…but that’s not their take home earnings they are leading you to believe.
So those are the TOP 5 REASONS DROPSHIPPERS FAIL.
Again, we didn’t want to rain on your parade, but we also didn’t want you to be misinformed and dig yourself into a hole.
And we didn’t even mention about how much competition you’re going to have because of how low the barrier of entry is.
But we’ll save that one for another time.
Oh yeah, but what you’re probably wondering…
It’s pretty much exactly as it sounds. You get the equivalent of rent payments for websites.
Here’s how it works.
Find a local owned service based business and decide to build a website and rank for it.
When the leads start coming in, pass them off to a business owner and start collecting the checks.
Is it really that simple?
You see compared to dropshipping, you don’t have to run any paid ads to a site. So, you’re only out of pocket like $8 a month for hosting and $11.99 a year for your domain.
And if you can’t afford that, well maybe we have other issues we need to talk about.
But seriously, lead generation sites make bank and they’re extremely passive.
As a matter of fact, check this out…
Once you have them ranked, you don’t have to touch them again because they run on autopilot.
But what about the competition you ask?
Virtually nonexistent compared to dropshipping.
With dropshipping you’re competing with literally millions of people globally.
With lead generation we’re talking maybe 20 of the same type of business in an area. Most of which don’t know anything about ranking a site.
It legitimately couldn’t be any easier.
The best part?
These sites are worth $500-$1,000 on average a month!
If you had just 10 of these sites, you’d be making $5,000-$10,000 a month from passive income!
And your margins are upwards of 90% or even higher.
So, in summary, let’s take a look at these 2 business models side-by-side…
Only a few niches and fad products will make you decent money.
You have to spend a lot of money to see a decent ROI (Return On Investment).
The barrier to entry is low, so you will have a lot of competition.
High maintenance costs and low profits margins (5-15%)
You have little control over Refunds, Returns and Frozen Accounts.
No Passive Income - You just created another JOB for yourself.
Digital Real Estate
You can make big money in any city, state or country from ordinary niches.
Get started in under a couple hundred dollars and no need to buy ads.
Very few people have the knowledge and skills to do this, so competition is low.
Your maintenance costs are low with profit margins as high as 90%.
You have total control over how you run your business.
Passive Income - Money keeps coming in year after year.
But that’s enough of that…
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