Is Dropshipping Safe? 6 Things to Look Out For

Written by
Isabel Edwards

Dropshipping is a safe business model, if you know what to look out for. It may seem too good to be true, not dealing with inventory, no bulk ordering and launching a business with such little investment, so you may be asking the question ‘Is this safe for me to do?’.

After reading this article you’ll be clued up on exactly what to look for when avoiding scams and how to launch a successful dropship business safely.

Scammy Suppliers

Not only is finding your own suppliers difficult and time consuming, it can also be tricky to distinguish between the reputable ones and scammy ones. Even more so if you’re new to dropshipping, and you’re unsure of the warning signs to look out for.

Of course, it’s much easier to dropship with a platform like Mercarto that handpicks quality suppliers with years of experience so you know you’re dealing with trustworthy business owners.

But, if you are sourcing your own suppliers, here’s what to look out for:

  1. Charging supplier fees. Many fraudulent suppliers do this to get an extra bit of cash out of you, but most reputable suppliers won’t charge you before even placing an order with them.
  2. Bulk orders are a must. The major benefit of dropshipping is the fact you aren’t required to place bulk orders. This means you don’t have to store your own inventory and you can order products as you make sales, as suppliers send them directly to your customers. If the supplier is demanding you place a bulk order, stay well clear.
  3. Poor communication. Is the communication very slow, or something just seems off? Then, it probably is. Go with your gut instinct. If the communication is bad before you’ve started placing orders with them, it’s only going to get worse.

Reliable Suppliers

Your suppliers are the people who are fulfilling your orders, so reliability is an absolute must. You need to ensure orders are going to get to customers in a reasonable time frame and that the experience leaves a positive impression on the customer.

The best way to find out how reliable this potential supplier is to do a bit of Googling. You’re a savvy aspiring entrepreneur, so of course you’re going to do your research. But when typing their details into Google, you find nothing. This will give you a bad feeling, which is completely justified. If you can’t find reviews, social pages, a website or anything about your supplier online, it’s certainly not a good thing.

Finding nothing is as bad as finding bad reviews. There’s no reason to go with a supplier that’s a ghost when it comes to online visibility, so find one that has plenty of social proofing and strong reviews.

Poor Quality Products

Delivering poor quality products to customers can be a real sting to your business reputation, and cause you some serious complications.

You could be infiltrated with returns, complaints or chargebacks, which is financially and emotionally overwhelming.

There’s a couple of simple ways to avoid this, and there’s no reason to send poor quality products to customers.

Firstly, use a platform that meticulously vets their suppliers and products to a high standard. We’ve filled the Mercarto Marketplace with premium UK suppliers, so there’s one less thing for entrepreneurs to worry about when setting up their online business.

If you’d still like to inspect the quality yourself, order one of the products. Not only will you get an idea of the experience your customers will receive, but you can see the product in real life and up close.

It’s Free - But Be Prepared To Inject Some Cash

When dropshipping with Mercarto, it is completely free. There’s so monthly subscription, sign up cost or supplier fees to use our platform. (If you’re using a different platform to dropship, this might not be the case).

But, if you’re serious about growing your business, and want to accelerate the process, be aware that you may need some budget to grow your customer base.

There are plenty of ways to market your business for free, like in our recent post 31 Ways to Sell More Products Online for Free, but these are more long term strategies.

If you’re looking to increase sales in the short term, it’s a good idea to put some cash into PPC (pay per click) and paid social ads. Done correctly, this will increase traffic to your site and improve conversions.

It’s useful to be aware of this so you’re not left high and dry when your business isn’t performing as you thought it would and you’ve left yourself no budget to do anything about it. 

Only Sell Legal Products

Selling illegal products can not only be dangerous for your business, but can also be dangerous for the customer purchasing your products.

Your business could be completely shut down if found by your local authorities, you may face a fine (or prison time) or the products could get into the wrong hands.

It’s easy to do some research and find out what products are banned in your country, and any reputable dropship platform you’re using shouldn’t have illegal products for you to even add to your store.

Look Out For Hidden Fees

Unexpected hidden fees could make or break your business, so do some extra digging and inquiring to ensure you're fully up to speed with what you’re signing up for.

Some platforms may have fees for signing up, monthly subscription, service fees, hosting or supplier fees.

When starting out, you might not have any budget to spend on these kinds of fees, or you might want to save it for actually growing the business.

That’s exactly why we provide you with everything you need to start an online ecommerce store for free, so your focus is on developing a thriving business.

Want to start your own free dropship business? Sign up here or get in touch to ask any questions you might have.

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