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Drop Shipping: Financial Success is Achievable if you Avoid These Mistakes

Avoid these mistakes on your way to financial freedom.

By Chris CarabottPublished 2 years ago 8 min read
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Drop Shipping: Financial Success is Achievable if you Avoid These Mistakes
Photo by Alexander Mils on Unsplash

The get rich scheme is a booming business, it always has been, and right now there are more avenues than ever to find your way to financial success. With time, money, and actual effort, you can be the next face of success on the world wide web. Just as there are more ways than ever to find sweet financial freedom, there are even more predators looking for ways to take advantage of those dipping their toes into those treacherous entrepreneurial waters for the first time.

Drop Shipping 101:

As a drop-shipper you are essentially the middle person between a distribution house, usually located in China, and the customer. While that may not sound different from a traditional sales channel, the big difference here is that you are not responsible for warehousing the product locally. You create a point-of-sale for the product, usually a website using Shopify as a back end, and then you are responsible for advertising and driving traffic to your site to generate sales.

Once a sale is made via your website, you forward the details to the distributor along with the cash to cover the wholesale cost of the product plus any shipping charges. If you’re doing it right, you should come out of the transaction with a 20% profit margin after any calculated costs for maintaining a website and paying for advertising.

So easy, right?

I made $25,000 in 24 hours!

We’ve all seen these headlines, right? YouTube is filled with thumbnails proclaiming drop shipping success within the first 24 hours of launching a new product. Whether or not these headlines are true or not, yes, it is entirely possible to generate sales of $25,000 in 24 hours. Probably a lot more, as well. With the right product and marketing scheme you can strike gold and fast.

Anyone who has tried to achieve anything in life, which will be most of you, knows that it isn’t how it works most of the time. But just the idea that this is achievable with the right formula of product + advertising, still makes it extremely enticing for many of us.

That enticement comes down to the perceived simplicity of that formula. If you only had the right set of instructions for success, you could simply replicate that, right?

Well, yes, you probably could, but going down the rabbit hole of trying to find that perfect set of instructions is what will land you into a lot of financial trouble, if you’re not on your guard.

Enter: The Mentor

One of the biggest industries around drop shipping, and any get rich scheme for that matter, is the mentor. These are the key holders to the secret formula you have been searching for. That set of instructions you need rests nestled in their exclusive plan that can be, personally, imparted to you for what usually amounts to a substantial fee.

By Osarugue Igbinoba on Unsplash

I don’t begrudge these mentors for the most part. They found their niche, they excelled at it, and now they are reaping the rewards. They are at the top of the game.

However, it’s important to be wary of mentorship programs for various reasons. The ones that have stood out to me the most, especially on YouTube, are the mentors who give away everything online for free.

You must ask yourself why they are doing this. If the information they have is so valuable, why are they willing to give it away?

Well, I tend to find these types of mentors have a two-pronged plan of attack.

First, they know that you will click because they are offering you the keys to financial success for free. It’s an age-old advertising ploy.

Second, and this might be the most egregious, the information they give you tends to be dated or missing just enough information that you will most likely fail when you try to replicate it.

The reason for this is simple, they want you invested. Once you have invested your time, paid for the website, the advertising, and sat there watching it all generate zero sales, well, now they you are more likely to come back seeking more information.

You have all the pieces, tried to put them all together, and it resulted in nothing but a big fat goose egg. That’s when you go back to the article or the YouTube video and remember the program the mentor offered. Investing in their program might just be the key to your success.

And it might be.

By rupixen.com on Unsplash

But do you really want to trust someone with your money who originally duped you with potentially misleading information? Once they have you in their program, these are the types of people who will most likely try to find ways to generate continued income from you via their own drop shipping geared software applications or exclusive accessed to mentorship focused Discord groups.

You need to trust your gut in these situations. Check peer reviews before seeking out a mentor. Even then, peer review those peer reviews! You would be amazed out how many of these types of reviews you can just pay for these days. Hell, you can even pay for false reviews on your drop shipping products if you have the right program.

The Single Item Store

The biggest push in the drop shipping business seems to be the idea of sticking to a single item store. These stores tend to generate quick capital up front but unless you have an evergreen item that people always need, they tend to die out fast. You can still generate good income in the short term, but you will quickly be back at square one.

The reason this model is so popular is the obvious quick success, but I also think that it generates a lot of income for the mentorship programs around drop shipping. Once you have had that taste of success you will be willing to use any tools to achieve it again. I see a lot of mentors pushing the single item store model.

I think it’s important to stick to a niche. As someone who has attempted a general goods drop shipping store, I can tell you it’s difficult to market for. You have all these products from various niches, and it costs a lot in advertising capital to advertise each audience you are trying to cater to.

Stick to a niche, something you know well and know how to market for. While my single niche drop shipping site hasn’t seen the success I had been hoping for I still enjoy working on it because it is a group of products that I know and can speak with authority on.

Also, regarding single item stores, how often do you as a consumer really trust your product to a single item shop? I can’t remember the last time I went to one website that sold one product and willfully parted with money. There are those out there who do it, but the real long-term success is in building a site around a brand and culture that you can grow.

Seeking Help from your Peers

So, you have decided to avoid mentorship. Where else can you turn for advice? Well, one of my favourite places to seek advice from is Reddit. You can usually find a healthy community around most topics and plenty of people willing to dish out advice.

Be warned! While Reddit is a great place to ask for advice there are plenty of people who specifically seek out drop shipping Subreddits looking to take advantage of people seeking out help.

I personally fell into one of these traps when I asked to have my own drop shipping website peer reviewed. Someone sent me a private message saying that my website looked good, and we started swapping advice. They mentioned their sales figures which were, much, much higher than mine.

Of course, I took the bait and wanted to know their secret. They forwarded me the details for a person on Fiverr who would create me a new site from the ground up for $50. It seemed like a safe bet, and they even built me the website. Unfortunately, the site had all sorts of obvious errors and was a low effort production all around. The product pictured on the page wasn’t even the same one being sold by the distributor. I immediately made sure to get my money back.

An actual image from that single item drop shipping store I had made. The product being sold was a completely different brand then what was pictured here.

I was lucky since I at least knew what I was looking for before I took the site live. If I had sold those products the number of angry customers, I would have had demanding refunds because they didn’t get what they had paid for would have been high.

Lesson learned.

I still think Reddit is a great resource but be wary of helpful advice from your peers that looks a little too good to be true. Even if you take the bait, make sure it is at least low cost and be knowledgeable enough to know when you are potentially being scanned.

Trust Your Gut

This is the easiest and most obvious bit of advice I can give but that inner voice in your head will save you a lot of headaches in the long run. It will not only help you from being scammed but I also consider it the most valuable asset when trying to build a drop shipping website.

We’re all consumers and know what makes us comfortable trusting our money with a website in exchange for goods and services. Focus on doing that, and while you may not see instant breakout success, you can develop a business that will stand the test of time.

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About the Creator

Chris Carabott

I’m a Toronto, Ontario native with over 13 years of freelance writing experience in the fields of television, video games, and technology. I have written hundreds of reviews and articles for websites like IGN, Vocal, and Medium.

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