Business

7 Reasons Why Drop Shipping Businesses Fail

In this post, we’ll be discussing several reasons (seven, to be specific) as to why eCommerce businesses fail and what you can do to avoid that fate….

Published

3 years ago

May 18, 2021

Manvendra Chaudhary

7 Reasons Why Drop Shipping Businesses Fail

E Commerce is a land of opportunity for anyone looking to make their mark on the digital world.

It’s a wonderful way to expand your business. Like other industries, eCommerce has its version of the popular niche: dropshipping.

Seeing the rise in digital adoption, many have started their dropshipping businesses and that’s good.

But it is important to point out that there’s a difference between hopping on the bandwagon and going in with a clear and well-thought-out strategy.

Hopping in just for profits is the main reason why many dropshipping businesses fail and rightly so.

Research is the most important element in this business and if you don’t analyze other businesses and your niche, you’re cooking up a recipe that’s bound to fail.

In this post, we’ll be discussing several reasons (seven, to be specific) as to why eCommerce businesses fail and what you can do to avoid that fate. So, let’s start, shall we?

Also Read: 5 Best Practices For Small Businesses In 2021

1. Poor Marketing

This is the first mistake beginners make. Not knowing what to sell, they go to the product that’s the most popular or choose the wrong niche altogether. In both scenarios, they fail to take into account the marketing effort required for selling in the first place.

Besides making a calculated decision on what you want to sell, you should also search for a niche that’s closest to your comfort zone. It’s not just limited to raking in profits, you also need to have something you’re proficient at. To each his own, indeed.

The reason we say that is because once you have a grasp on what you want to sell, you can sell more rather than less.

In addition to the right niche, you should also focus on the audience you’re selling to. Selecting the right demographics for your store helps you sell to your customers more efficiently and with the right message since a marketing message for people in their 40s might not sit right with young adults.

2. Zero Patience

Patience is the key element when it comes to dropshipping and business in general.

Most individuals get on the dropshipping train thinking they’re going to make the big bucks as quickly as possible, but that’s not the case. It’s a career and you have to be patient before the cash flow begins.

Being consistent in your sales efforts will pay dividends in the long run. Dropshipping is not a get-rich-quick scheme.

It’s a persistent effort and, if you’re doing things organically, you’re getting more eyes to your business. This, in turn, means more success for your business.

A good first step towards getting eyes on your business is to use promotional material to get things off the ground. This includes lowering your price bar, offering discounts, and promotions.

Combined with a visually appealing website, you can improve your odds or early profits.

All in all, we’d suggest you be patient.

3. Lacking Resources

Dropshipping is oftentimes made out to be a low-investment high-return game.

While the number of resources required is generally less, people are misled to believe dropshipping doesn’t require any investment at all.

If you’re looking to set your store apart from the fray you need to invest in website development, design, sales, and marketing.

It does not matter whether you’re selling B2C or B2B eCommerce products, the more value you add to your offerings and web presence, the better your returns will be.

Also Read: 5 Biggest Ecommerce Crisis and What to Learn from Them

4. Zero Management

The root cause contributing to the failure of eCommerce startups is their failure to manage things accordingly.

As a business owner, it’s easy to get lost in your work and ignore the administrative part of your business.

Bad planning isn’t going to take you anywhere.

To ensure that you’re managing things correctly, you need to keep the people’s interest in your store and fix any issues that arise, regardless of whether they’re technical or not.

At the bare minimum level, you need to provide stellar customer service. Make sure all the problems associated with your customers are resolved and there is little room for error.

Both pre- and post-purchase activities should be seamless and should focus on making the customer satisfied.

If you’re just starting, keep the customer in tune, you will benefit significantly.

5. Damaged Products

Whatever products you have in your store, make sure that you assure them of quality.

Ensuring that your products are quality controlled and delivered without damages or problems can lead to a higher conversion rate for your store.

It’s not just about making that one sale. You also have to ensure that your products are of stellar quality because an unsatisfied customer is more than likely to leave a bad review on your store than a satisfied one.

Combine those reviews and you’re becoming an online spam store with no legitimacy whatsoever, even if you think you are legit.

6. No Effort

While this section might seem old-fashioned, you’d be amazed at the number of people who still have shoddily designed websites.

When you deliver a poor user experience on your website, the more likely it is that no one will visit your store. As a result, you’re left wondering where you went wrong.

Your store should be unique, well-designed, and kept with the customer experience in mind. This ensures that your website is customer-friendly and people will be satisfied in purchasing from it.

Investing in a good custom-designed website is, therefore, important. This can lead to significant benefits down the road for your business.

7. Being Too Involved

Now all of what we’ve discussed in the article usually revolved around general laziness and lack of foresight. On the other side of the spectrum, some individuals are too high maintenance.

Also Read: 5 Best Technologies To Include In A Smart Office

They plan and plan with foresight. Their plans are impeccable but they’re too impatient and start doing everything at once. This leads to burnout which eventually causes them to lose motivation.

Doing so many things at once is hazardous. Take things one at a time and you will, with time, succeed.

Conclusion

So, with this article, we wrap up the seven ways in which drop shipping businesses fail. We hope you enjoyed reading!

World

New Class-Action Lawsuit Accuses Rivian of Making Materially False and Misleading Statements

Published

13 hours ago

April 25, 2024

Manoj Nair

New Class-Action Lawsuit Accuses Rivian of Making Materially False and Misleading Statements

Electric vehicle manufacturer Rivian has been slapped with a lawsuit which alleged that the company misled the investors with false claims regarding its business, operations and prospects.

The class-action lawsuit made a number of allegations which included overstating the demand of its Electric vehicles and also not making it clear how it will handle the negative and near-term macroeconomic impacts.

The lawsuit also revealed that Rivian’s business was experiencing reduced demands as well as increased customer cancellations precipitated by inter alia, high interest rates.

The orders had significantly reduced and this has significantly reduced the profits and the manufacturing of vehicles in 2024.

Rivian Faces New Class-Action Lawsuit Alleging Deceptive Statements

The lawsuit also alleged that the Company’s public statements were materially false and misleading at all relevant times.

Rivian’s stock, like all other EV startups, has been tanking and this has angered the investors who saw a major portion of their investments eroded and a number of law firms like Bernstein Liebhard LLP announced this week that it has filed a securities class action lawsuit on investors’ behalf.

The lawsuit stated that the EV manufacturer had violated the Securities Exchange Act of 1934 and has asked investors who had bought shares of Rivian Automotive, Inc. between March 1, 2023, and February 21, 2024, to join its suit.

The company’s stocks have fallen and one of the primary reasons was the high interest rates. Rivian’s products are beyond the reach of an average income household.

Also Read: Prime Hydration Faces Lawsuits Claiming Its Sports Drink, Prime Energy, Contains PFAS and Excessive Caffeine

The Rivian’s Electric vehicles target customers were wealthier clients and the spurt in order cancellations means this class is walking away from Rivian’s product.

The stocks of the company were popular for the investors but the reduced demands caused by higher borrowing cost have hit its stock prices badly.

The price war has also affected the EV sector and the company also with its competitors like Tesla has been uniformly affected.

The EV sector marked value has tanked by more than 57% year-to-date.

The chance of a fall in interest rates is not expected since the Federal Reserve will not lower the benchmark interest rate since it could lead to a bout of hyperinflation.

Also another factor which will discourage the Federal Reserve to lower interest rates is the soaring energy prices caused by the war in Ukraine and the Middle East.

Also Read: Lawsuit Claims Kennywood Concealed Steel Curtain Closure to Boost Sales

World

Lawsuit Claims Kennywood Concealed Steel Curtain Closure to Boost Sales

Published

17 hours ago

April 25, 2024

Manoj Nair

Lawsuit Claims Kennywood Concealed Steel Curtain Closure to Boost Sales

Kennywood’s Steel Curtain roller coaster will not be available this 2024 season, and this has miffed a Kensington man to the extent that he has filed a lawsuit against Kennywood and its parent companies, alleging that the officials had known this fact long before but withheld it to boost season pass sales.

Lawsuit Against Kennywood

The lawsuit, filed in the Allegheny County Common Pleas Court by Joshua Miller and his attorney, John A. Biedrzycki III on Monday, alleges that it was a deliberate attempt to hide the fact to accrue financial benefits by boosting season pass sales.

The lawsuit alleges that Kennywood has created advertising campaigns targeting consumers like Mr. Miller and others to purchase the 2024 season pass under the belief that the benefits included myriad park attractions, including the Steel Curtain.

In the lawsuit, it was revealed that Mr. Miller bought his season pass under the assumption that all rides would be operational.

However, on April 17, three days before the park opened for the season, it was revealed that Steel Curtain would be closed for the season.

The announcement was made by Ricky Spicuzza, the park’s assistant general manager, and the reason for the closure was cited as the coaster undergoing an “extensive modification project.”

Ricky Spicuzza said,

“We understand the frustration many of you have felt not being able to experience the Steel Curtain. On behalf of our entire team, we absolutely share that frustration with you.”

However, the lawsuit contends that the fact was known long before last week that the 220-foot-tall coaster would be out of commission.

The lawsuit states,

“The company withheld this information from season pass purchasers so as not to lose season pass customers, or, alternatively, so as not to offer a discount on season passes due to the unavailability of the Steel Curtain.”

The lawsuit also details numerous violations of the state’s unfair trade practices and consumer protection law. This includes failure to disclose the Steel Curtain’s closure with the full knowledge that the consumer believed that it would be functional for the 2024 season.

The park offered varied passes, which ranged from season passes priced from $109.99 to $239.99.

The lowest endowed pass was the bronze pass, which provided unfettered admission except on certain blackout dates.

The premium range included the platinum pass, which offered year-round admission to Kennywood, Sandcastle, Idlewild, and Palace Entertainment’s Dutch Wonderland in Lancaster.

Additionally, it also offered free parking, discounts on food and retail, and three free guest tickets.

Also Read: Prime Hydration Faces Lawsuits Claiming Its Sports Drink, Prime Energy, Contains PFAS and Excessive Caffeine

World

Prime Hydration Faces Lawsuits Claiming Its Sports Drink, Prime Energy, Contains PFAS and Excessive Caffeine

Published

2 days ago

April 24, 2024

Manoj Nair

Prime Energy, the sports drink from Prime Hydration, has been hit by a number of lawsuits for containing excessive amounts of caffeine and PFAS. Another lawsuit was filed on April 8 in the Southern District of New York, accusing Prime Hydration, the parent company which manufactures the sports drink, of engaging in misleading and deceptive practices.

Prime Hydration was founded by two Logan Paul and KSI in 2022, and the products became very popular thanks to the huge followings of the YouTubers. However, the company is now facing a slew of lawsuits over the ingredients in their energy and sports drinks.

New Lawsuit Against Prime Hydration

The latest lawsuit, filed on April 8, accuses the company’s 12-ounce energy drinks of containing 215-225 milligrams of caffeine, exceeding the permissible limit of 200 milligrams. The lawsuit was filed by Lara Vera, a resident of Poughkeepsie, New York.

The lawsuit details that the plaintiff had purchased Prime’s Blue Raspberry products on numerous occasions in August 2022 for about $3 to $4 each, unaware that the products contained caffeine beyond the permissible limits. The plaintiff is seeking damages of $5 million from the company. Lara Vera’s lawsuit alleges that Prime advertised 200 milligrams of caffeine, which is equal to six Coke cans or two 12-ounce Red Bulls. One Red Bull can could contain 114 milligrams of caffeine.

Also Read: Johnson Controls subsidiary Tyco Fire Products to pay $750 mn to settle ‘forever chemicals’ lawsuit

The suit also alleges that there are no safe limits of caffeine for children and that caffeine has been indicted for causing tachycardia, headaches, convulsions, tremors, upset digestion, and adversely affecting mental health.

Earlier, Senator Charles Schumer, D-N.Y., had asked the Food and Drug Administration (FDA) to investigate Prime energy drinks in 2023 after reports that the products contained high levels of caffeine. The Senator also accused the company of using vague marketing tactics focused on young people, influencing parents to buy the caffeine-laced drinks for their kids. The lawsuit by Vera also quotes the Senator’s call to the FDA.

Prime is also facing another lawsuit filed on Aug. 2, 2023, in the Northern District of California by the Milberg law firm on behalf of Elizabeth Castillo and others. The lawsuit charges Prime’s products with using flavors containing PFAS, or “forever chemicals.” Forever chemicals are a class of chemicals that are not degraded in the human body or nature and have been indicted as a carcinogenic substance. Independent third-party testing has confirmed that Prime Hydration grape flavor contained PFAS.

Also Read: California mother files lawsuit against Tesla after her 2-year-old child starts Model X and runs over her