After generating over $30,000 in a month with a Shopify drop shipping store I decided to completely shut down the store and exit the world of drop shipping. Here’s why.
I have dabbled in dropshipping since 2016 when I first heard about it on YouTube. I tried a few stores without putting too much budget and effort into them over the next couple of years, and unsurprisingly they failed.
After seeing many of my friends do well (really well) with dropshipping I decided to give it one final push in late 2019.
I decided I would go all in, not worry about spending a lot of money and see if I could make it work. This was my solution to always having dropshipping FOMO.
Well, it did work, but I hated it. Here’s why.
#1 It felt like a hustle, not a business
My process for dropshipping consisted of setting up 1–3-page stores based around a singular product, running $100-$200 of Facebook ads to the page, and seeing if it worked, if it didn’t within 48hrs I had that site was taken down and another up with a new product.
Testing products was a grind. Completely new website, new domain, new product video, new product description, new ad, etc.. And within 48hrs of running test Facebook ads if it did not work it was on to the next product.
Eventually, after about 10 products I had one pick up some serious traction. This product was a camera accessory with some juicy margins and a lot of really good USPs.
The thing with drop shipping is even when you do have your “winning product”, it’s only a winning product until the next dropshipper with a bigger budget and a more creative ad finds your store and copies it. You aren’t doing anything unique, you are just positioning someone else’s product.
This meant that even when you had found a winning product, you were lucky if that product “worked” for more than 2 or 3 months, requiring constant testing.
I love systems, and a lot of my other businesses run relatively passively, but the number of pieces and constant change in dropshipping felt unsustainable even with systems in place.
#2 At night I didn’t feel good about my business
Up to this point, I had been very proud of all my business and felt they provided a lot of value to my customers. In general, I was happy and my customers were happy.
I was drop shipping my products from a Chinese website called “AliExpress”, which is a fantastic site, but the issue is shipping times take 2–3 (sometimes 4) weeks, and a lot of time the product gets broken during shipping.
I was getting a lot of sales around Christmas time, and I knew that many of these orders would be presents from parents to children, friends to friends, or spouse to spouse. Knowing that a decent number of these orders would arrive broken, or at least late made me feel like I was not providing a product or service that I could feel proud of.
I generally sleep well at night knowing that my businesses are run ethically and that I have happy customers. With dropshipping I had to attend to angry emails, questions (fairly asked), and an absurd amount of PayPal disputes.
I felt like every unhappy customer, every PayPal dispute, even every negative comment on our Facebook ads chipped away at me as a person and an entrepreneur. It wasn’t a win-win situation, I was winning, and a lot of my customers were loosing and this did not feel right.
#3 PayPal and Stripe disputes
While I already mentioned this, I think it is worth meeting again how many disputes I had to go through. These disputes take a while to respond to and just suck the life out of you.
Unlike other areas of the business that I was able to hire out for, I did not trust a virtual assistant to go on my Stripe or PayPal account to attend to these disputes, which left me spending up to one hour a day sometimes responding to unhappy customers. This drained me more than the money I made was worth.
#4 Being driven by vanity metrics
I found myself saying too often “My business does $30,000/month”, which sounds like a huge accomplishment, and it is certainly an accomplishment, although, less of an accomplishment than one might think.
It’s not like $30,000 was profit, between all of my costs my margins depending on the month were between 10–20%, which still means I was making a good profit, but I found myself weirdly connected to the amount of revenue I was making like it defined me.
Luckily, I was self-aware enough to realize this and stop using these vanity metrics whenever I spoke business to someone, but I think especially with dropshipping it is easy to fall into this trap.
#5 Having little control
Since the product I was selling wasn’t branded, wasn’t manufactured by me, and wasn’t exclusive to me, I had very little overall control.
My manufacturer could decide to discontinue the product, and I could instantly be without a business.
A competitor who is better at marketing than me could identify my store, and simply out market me.
The product could become irrelevant or outdated, and since I did not have a real following of people who cared about my business I would be instantly without (or at least with reduced) revenue.
What I learned
I’m not going to say I completely regret getting into dropshipping, I don’t. Dropshipping taught me a lot of things. Some of the main things I learned from this journey were:
- The importance of testing every variable in your business: website, ad copy, ad creative, product description, product, website layout, pricing and so much more
- How to properly find, hire and manage people who were experts in areas I had little experience
- That I value ethics in business more than I value profits
Would I dropship again? Yes actually, however, I would drop ship from a supplier in the United States after I had personally tested the product, knew I could eventually brand it, and also knew I had a way to make it unique. Here’s my advice for anyone looking to get into dropshipping.
- Find a supplier in the United States (or whatever country you are from) and test the product before selling
- Don’t be fooled by internet gurus, you should have around $2,000–$5,000 to start this business model
- You need to hire, trying to do every aspect of dropshipping yourself will either require you to learn countless new skills and spend all day on your business or hire the right people (I hired on UpWork and had great luck)
- Be patient. Yes, this is a bit of a cliche, but dropshipping is not an overnight success business like it is commonly marketed. It takes a lot of testing, which can take months (and in some cases years)
- Create unique content for your product, don’t just use the basic stock videos/images your supplier provides you
I won’t say I regret getting into dropshipping. I will say I am happy I learned what I most value about being an entrepreneur and developed more skills than I had before.
I hope this short article provides some insights for anyone looking to get into dropshipping, or anyone in general with an interest in dropshipping.