What are the disadvantages of dropshipping?
Drop shipping, in other words, stockless e-commerce is one of the online sales methods preferred by small and medium-sized companies. Although it is a method that attracts the attention of new entrants to e-commerce because it reduces stock and warehouse costs, it also brings some disadvantages.
If you intend to enter e-commerce and sell without stock, it is very important to know the disadvantages of this method, to grow your business and ensure your profitability.
Dropshipping increases the costs of the products you sell
Because you are selling stockless, you place an order when you receive an order for the product. For this reason, the cost of the products you buy will start to increase because you do not buy products in bulk. If you buy a product per unit, your costs will increase, and your profit rate will decrease.
Since the low rate of profit will prevent your e-commerce operation from being long-termed, it may cause problems in your operation in the long term and prevent the investments you will make to grow your business. Therefore, you should consider these costs when doing drop shipping.
Narrows your product selection
Since you sell products without stock, you will limit your product selection on your e-commerce site. Since you cannot obtain every product quickly, you will try to offer certain products to users. In order to reduce your costs, it may not be preferred by consumers as it may reduce the quality of your brand if you go over inexpensive products.
Your shipping costs increase
Since you will not buy your products in bulk and you will request products from suppliers as the order arrives, your shipping costs will increase continuously. In this case, you will have extra costs because you will have to constantly pay for the cargo. Increasing your shipping costs in this way also causes your profitability to decrease.
Delivery time is longer
One of the most troublesome problems for consumers who shop online is the long delivery time of the products. When you sell without stock, you cause the delivery time of the products to the consumers to extend. You will need to buy products from the supplier and then send this product to your customer.
In this case, the waiting time of your customers will double as the cargo delivery process will be doubled. Although not always, the normal delivery time may be extended due to the problems experienced in the cargo process. Prolonging your cargo delivery time will make your customers unhappy, and this may damage your brand image by being expressed on social media.
Increasing negative comments about delivery time will hurt your brand awareness and reliability. For this reason, when you sell without stock, reducing your delivery time to the shortest possible time will help you in terms of brand loyalty.
Product and order tracking becomes difficult
Since you do not keep a certain stock, you will need to follow up the products you have ordered. Since you will have to follow up all the products one by one after the orders you have received, it will be difficult to follow these orders one by one during the busy periods.
Since you will need to control both the arrival process of the products to you and the delivery time to the customer, your workload will increase considerably. Since you do not have stock management, you will have to follow up on order basis and it will be difficult to follow unless you put it in a system.
Customer complaints may increase
We mentioned that the delivery time of the cargo may be longer in stockless sales. In this case, you can constantly receive complaints from your customers as it may cause your customers to have trouble with the delivery of the products. If the delivery time you specified to them is over, they will contact you and you need to provide them with the necessary support in this regard.
You need to manage the cargo delivery process as well as possible. Because your customers will see you as an interlocutor about this issue and will not care about the problems you will have with your supplier or cargo company.