Dropshipping – The 8 Biggest Beginner Mistakes 2022
Transcribe of “Dropshipping – The 8 Biggest Beginner Mistakes 2022”
Hi guys, Neil Waterhouse. One of my favorite Warren Buffett quotes is, “It’s good to learn from your own mistakes however, “it’s better to learn from other people’s mistakes.” In this week’s video, I’ll show you the top eight drop shipping mistakes. For anybody new to this channel, my name’s Neil Waterhouse. I’ve been selling on eBay for 24 years and I’m the author of “Million Dollar eBay Business From Home” and creator of Dropship Formula. So let’s launch straight into it.
After coaching literally thousands of people over the last 20+ years through my books, seminars, courses, et cetera you just can’t help notice the patterns of people making the same drop shipping mistakes over and over. After much reminiscing, here are the top eight drop shipping mistakes. Number eight mistake new drop shippers make is they try to be a jack of all trades. Life does not reward us for being a jack of all trades life rewards us for what we master. So many times I see drop ship newbies trying to juggle too many things at a time. They want to drop ship on eBay, drop ship on Amazon, they want to import a product and sell on Amazon FBA. They want to get into private labeling. They want to open a Shopify store. They want to learn PBC marketing, et cetera.
Now don’t get me wrong, I’m a huge fan of diversification but one baby step at a time because life doesn’t reward us for being a jack of all trades but instead rewards us for what we master. I always recommend, finishing each business first. By that I mean, make sure each marketplace that you drop ship on is fully automated and running by itself first before moving onto the next marketplace. To generate the most revenue from each product, each product should, in a perfect world be listed on eBay, Amazon and your own website like a Shopify store. And you can also import yours or your competitor’s top selling drop ship items. But one step at a time and it’s all about small continuous baby steps.
As well as spending 10% of your profits on low cost overseas virtual assistants to leverage your time, automate the business, and grow the business for you. Number seven biggest mistake is don’t use overseas drop ship suppliers. Buyers hate it when items arrive late. Yes in a perfect world you can use companies like FedEx, DHL, et cetera to get items from China to first-world countries like Australia et cetera, in three business days. However, we do not live in a perfect world. Over the last 30+ years of importing I’ve seen hundreds if not thousands of reasons or excuses as to why parcels have been held up and arrive late therefore missing the expected delivery dates that customers expect on the eBay and Amazon show to their customers.
These delays can be from customs delay in China, customs delays in the receiving country, or a multitude of other reasons including volcanic gas, bad weather, missed flights, random inspections, et cetera. Bottom line is, when items arrive late it’s your account that suffers. For that reason we only ever use local suppliers for drop shipping. If you’re in Australia you only use Australian suppliers, if you have a business in the U.S. you only use U.S. suppliers, in the UK, UK suppliers et cetera. If you need more local suppliers I’ll put a link at the end of this video to a free list of over 900 drop ship suppliers. Number six mistake is, just focusing on cheap items.
The vast majority of drop ship newbies just focus on cheap items however, it takes the same amount of time to list a $5 item as it does to list a $200 item. Personally, I would prefer to make a $50 profit on a $200 item than a $2 profit on a $5 item. For this reason, we focus only on items that sell between $50 to $2,000. Number five drop ship mistake is, only focusing on small items. Again, the vast majority of drop ship beginners all focus on small items as they believe they’re easier to ship. However, the crazy thing is with drop shipping the suppliers do all the hard work of packing, wrapping and shipping the product direct to your customers for you. Again, it takes the same amount of time to list a small USB cable as it does to list a bar fridge. As a general rule because most beginners focus on small, cheap, lightweight items there’s far less competition and more profits with more expensive and heavier items.
Number four drop ship mistake is only selling items with free shipping. Beginners love free shipping as it’s easier and many drop ship sellers only focus on items that have free shipping from their drop ship supplies. This of course is good news if you’re willing to learn how to set up a rates table that automatically charges your buyers shipping based on their post code. It’s really not that hard to set up a rates table and I’ll put a link on the screen and below to a previous week’s video showing exactly how to do that. The good news is many of your competitors will not take the time to do this. Number three biggest drop shipping mistake is lack of automation.
Most people when they build an online business whether it being a drop ship business, or any other online business, they’ll simply just build themselves a job. However, they’ll rarely admit it. The secret to lifestyle is time and money. Some people believe having plenty of time and that money can work however, this is very rarely the case ’cause almost everything costs money even saving the whales cost money. The way to automate is first use software wherever possible to do a task. And if a task cannot be done using software, then allocate 10% of your profits to low cost overseas virtual assistants that you can get from $1 an hour.
Now using the 10% rule as your business grows each month so do your profits and therefore each month your VAs work more hours, there is more items and your business grows even while you’re sleeping. Leveraging a time is a ticket to building a six, seven and eight digit drop ship business fast and just as importantly, building a business that runs without you. So you’ve got time to enjoy the things in life that you enjoy doing most like your hobbies and spending time with the family. I’m not going to go into how and where to get VAs in this video as I’ve done that before in a previous week’s video but if you missed it I’ll put a link on the screen down below. Number two mistake is niching down.
You should avoid dropshipping mistakes. If you’re an expert in a certain niche, or you have access to a lot of products in a certain niche, then specializing in that niche may be a good thing but if not, then locking yourself into one niche can be like adding a massive rod to your back. When building a new drop ship business the focus should be on profit not having a love affair with a product or a niche. The problem with locking yourself down to one niche is you have to say no to all the other products that are making good profits. When doing product research, you and then your VAs will continuously come across products that are making good profits and have sold multiple times in the last 30 days but you can’t sell them because they’re not in your niche.
This is why I encourage drop ship newbies to focus on profit and not a niche. The number one drop mistake is, getting item not received cases opened by your customers. In the industry these are known as INRs which is short for Item Not Received. These are cases where customers purchase products from drop ship sellers on marketplace like eBay, Amazon, Shopify, et cetera, but they never receive what they ordered. Marketplaces like eBay, Amazon keep a very close eye on INRs to make sure buyers get what they order. They know what the average INR percentage is for all sellers on their marketplace. If a drop ship seller is continuously canceling sales ’cause their supplier ran out of stock or for any other reason that seller’s INR ratio, Items Not Received ratio will be much higher than that of an average seller.
This is why it’s critical to have a sound methodology in place to automatically continuously check your supplier’s stock levels. So if your supplier runs out of stock of any item your eBay, Amazon or Shopify listing goes to zero so you don’t oversell it. The good news is that these days we can fully automate the supply inventory checking task using software so that if a supplier runs out of stock the software will automatically make your listing go to zero so you don’t oversell it. And also, as soon as the supplier gets more stock the software automatically adds more inventory so you get more sales. The software that we use to do this is scarcity manager.
I’ll put a link on the screen down below. If you need help finding hot selling drop ship products, make sure you check out this video up here. That’s all for this week, if you have any questions please leave them in the comment section below. And if you found any value in this video please give it a thumbs up as it helps the channel and make sure you hit the subscribe button to the no-fluff, ad-free channel that teaches step by step how anyone can make a full-time living from their home using less than $100. Until next week stay safe, lease more, sell more.
✅ How To Quickly Find eBay Best Selling Items.
✅ How to Increase eBay Sale By 16x. The 16 Times Rule
✅ Understanding eBay Cassini Search Engine to Increase Sales
✅Automatic Supplier Inventory Management for eBay, Amazon, Shopify
✅ How to enable eBay’s out-of-stock function
✅ How To Make $1,000 Profit Per Week Dropshipping On eBay
✅ How to increase eBay Sales Fast
🚀 Beginners Guide To Starting an eBay Business.
✅ How to find eBay Best Sellers in 5 Steps https://www.neilwaterhouse.com/find-ebay-best-sellers
✅Overseas Virtual Assistants From $1 Per Hour
✅Beginner’s Guide to Starting an eBay Business
✅Beginner’s Guide to Starting an Amazon Business
✅eBay Dropshipping | Top 8 Secrets | 23 Years Selling On eBay https://www.neilwaterhouse.com/ebay-sec-1/
✅Here is a free list of 934 popular dropship suppliers all over the world including Australia. https://www.neilwaterhouse.com/ds-suppliers
✅Check the ebay dropshipping secrets. eBay Dropshipping – Secret 1
✅How To Build a 7 Digit Dropship Business – Step By Step
✅How and where to find overseas staff from $1 per hour Click here
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