038 - The Truth About Dropshipping: Why I Left the Hype Behind

Welcome to another episode of Women Powering Ecommerce. In today's installment, we're going to delve into the world of dropshipping, a business model that has gained immense popularity over the years. We'll explore my personal experience with dropshipping, the challenges I faced, and why I ultimately decided to bid farewell to this entrepreneurial journey. So let's embark on this adventure together and uncover the highs and lows of dropshipping.

The Birth of Suzie and Bags

Before we dive into the intricacies of dropshipping, let me take you back to the early days of my ecommerce journey. Around 2011 or 2012, I embarked on an ecommerce venture called "Suzie and Bags." It's essential to note that I had virtually no prior experience with the internet, let alone running an online store. I was starting from scratch, a complete novice.

Suzie and Bags became my learning ground, a place where I could make mistakes, experiment, and acquire valuable insights into the world of ecommerce. I sold handbags primarily, and even though I wouldn't say I'm proud of the store's overall success, it served as a stepping stone for my journey.

The Appeal of Dropshipping

During that time, I stumbled upon two suppliers—one in the US and the other in Italy—who offered high-quality leather handbags and were willing to collaborate through dropshipping. The allure of dropshipping was simple: it appeared to be the easiest and most straightforward way to start an ecommerce business. By eliminating the need to manage inventory, handle shipping, and receive products, I could focus solely on the ecommerce aspect—the website itself.

I was thrilled and optimistic. I received samples from both suppliers, tested their products, and was satisfied with the quality. This prompted me to launch my online store, believing that dropshipping was the ideal business model for me.

The Cracks in the Model

However, as time passed, I began to notice significant shortcomings and challenges inherent to the dropshipping model. These issues eventually pushed me towards a different business approach. Let's explore the four main stumbling blocks that led to my decision to quit dropshipping.

Saturation: Dropshipping's low entry barrier attracted numerous entrepreneurs, just like me. This led to a saturation of the market in certain niches, such as handbags. Perhaps I should have chosen a different product or niche, but these were the decisions I made, and they shaped my journey.
Return Policies: Without physical control of inventory, handling returns, especially from international suppliers, became complex. Where should customers return their products? Our suppliers didn't accept returns of new items, so what should I do with them? These questions posed significant challenges.
Customization and Branding: Dropshipping limited the scope for branding and offering customized products. There was also the risk of customers finding the same product on other websites, which was not ideal, especially in the fashion and apparel industry.
Supplier Reliability: This was the primary reason I decided to quit dropshipping. Quality inconsistencies in the products I received from my suppliers were a recurring issue. Unpredictable shipping times and unreliable suppliers could potentially harm my business's reputation.

The Value of Control

The most challenging aspect of dropshipping for me was the limited control I had over product quality and shipping. When a customer complained about a product or shipping delays, I felt powerless to provide immediate solutions. This misalignment with my values as a business owner pushed me to seek alternatives.

Dropshipping isn't dead; many businesses still thrive using this model. However, my answer to the question, "Can I deal with the issues of dropshipping?" was a resounding no. I value control over my products, shipping times, and supplier reliability. I believe that having as much control as possible ensures a better customer experience. For me, the benefits of not pursuing dropshipping far outweighed the potential benefits.

Conclusion

In wrapping up this journey, I hope my experiences shed light on the world of dropshipping and the challenges it can pose. Every business model has its advantages and drawbacks, and what works for one may not work for another. My decision to leave dropshipping wasn't a condemnation of the model but a recognition that it didn't align with my values and goals as an entrepreneur.

Thank you for joining me today on Women Powering Ecommerce. I hope you've gained valuable insights and inspiration to pursue your own business goals. Please follow me on social media and subscribe to our podcast to stay updated on future episodes. Together, we can empower more women in business.

See you next time!

Episode Transcription

038 - The Truth About Dropshipping: Why I Left the Hype Behind

(00:00):

Welcome to this episode of Woman Powering Ecommerce. Join me every Tuesday and Thursday as I take you behind the scenes of my journey as a female ecommerce entrepreneur. Together we'll explore the highs, the lows inspiring you to take action and achieve your own business goals. So let's get started.

(00:33):

There's something I really wanted to address, and that topic is about dropshipping. Lately I asked myself is this actually still a thing? And it's been so long ago that I was in that environment, and the answer is yes, definitely. Dropshipping is still a thing, though the dropshipping landscape definitely evolved over the years. And today I just want to talk to you about my experience with dropshipping, that was a while back, and why I decided to quit dropshipping. I just decided it was not a business model for me. So let's dive in.

(01:11):

So not everyone that knows me knows this, but before this current ecommerce store I currently have and started about 10 years ago, back in 2011 or 2012, I had actually launched an ecommerce store prior to that, yes. Am I proud of that store? Not a hundred percent, but it was definitely a great school. So it was called Suzie and Bags. I had zero knowledge in ecommerce, so for me it was a great way to learn the ropes of ecommerce. So I decided to open up an ecommerce store to sell mostly handbags. You have to understand though, and that I'm very proud of, I had no experience with internet almost. I basically didn't even know how to open up a tab. So I was really coming from very far. So to have actually done that, I mean, it was great. It was great. So I would not go back to that probably today. But for what I learned from it was wonderful.

(02:19):

I actually, at the time, found two suppliers that were doing nice quality leather handbags. And one supplier was in the US and the other one was in Italy. And the reason why I chose them is that they also accepted to do dropshipping. I told myself that this was going to be the easiest, simplest, and best way of doing ecommerce, at least to start, just because you don't have to handle all of receiving inventory, managing it, shipping out products. So I kind of removed that out of the equation while I could concentrate on just doing the ecommerce part, about the website part. So I was actually really excited about this, and I had a few samples shipped to my place. I tested out the product. I was very happy with both suppliers. And then that's when I decided to open up my store. Theoretically, it sounded like a great business model for me when I first started, but eventually I realized there were some gaps and holes with it. I mean, every business model probably does have gaps and holes, which is totally fine and normal, but at that point, those gaps were actually getting wider and wider and I was actually asking myself, can I deal with those issues?

(03:40):

And so you might wonder what were those struggles. So there are a number of struggles I was dealing with due to dropshipping, and I felt like I didn't want to handle those anymore, or at least find a solution to them. And the solution was not in dropshipping, I had to change business models completely. So you might wonder what those issues were. So I found four, I found four major gaps and holes in that business model which was, in the end, the reason why I decided to stop and quit dropshipping.

(04:18):

So number one is saturation, and what I mean by that is due to the low entry barrier, many entrepreneurs have entered the dropshipping business for the exact same reasons as I did. Because I had no experience, I thought it was just going to be so much simpler to have the supplier ship directly to the customer, but what happens is that everyone who enters the ecommerce space like that, this leads to a saturated market in some niches, for example, handbags. So maybe I should have chosen another product or niche, maybe I could have made it successful for all kinds of reasons. But this is my journey, those were the decisions I made, and they brought me to where I am today so I'm very happy, very content with everything that happened.

(05:06):

So number two is return policies. If you don't have your hands on your inventory, you definitely do not have your hands on returns. And you can have the things shipped back to you, but handling returns, especially when dealing with international suppliers, can be very complex. So just one question, where should your customers return their product to? Do they return it to the supplier? Our suppliers did not take back a new product. Was I going to stock up on returns? What would I have done with them? I could have probably maybe resold them on sale, but I don't know. I wasn't a fan of that concept, so that was definitely a big issue.

(05:54):

Another thing is customizing and branding. So branding and custom product offerings are limited. You can also run the risk that a customer will find your product on another website, which personally I was not a fan of, especially when it comes to fashion and apparel. Usually you want to have something that's customized and which will reflect the brand you want to convey, but it becomes a little harder with dropshipping. Though I know if you want to get some products made in China, they can actually add your logo, customize it for you. That's a whole other game.

(06:33):

The last point is supplier reliability. And I would say that's the number one and main reason why I stopped doing dropshipping. What happened in my case is that the quality of the product was not always the same. So I had sometimes sent to a customer, without knowing it, a poor quality product. It happened, like a bad batch or something. You have no control over that. Sometimes shipping times are very long, much longer than other times. So that, again, you don't have much control over. So if you have an unreliable supplier, that can definitely harm your own business, its reputation. I was not at a point where I feel like it had harmed my reputation at all, but I could see it possibly coming. Or the other solution I saw... I mean, I could have found solutions. To be honest, there is always a way. But it would've brought me to try and find other suppliers, other dropshippers. So I don't know. I didn't feel like really going into that game for, in the end, the results it would provide me. So I just decided not to go down that route and choose something else that would fit my values a little bit more.

(07:52):

So this is what I found the most challenging. So when a customer complained about a product or shipping, I felt limited in my options to help that customer. I felt that it just didn't align with my own values as a business owner. I really, really wanted to make sure I had control over as much as possible, over what my customer received in the end. So dropshipping is definitely not dead. I mean, you could still do it if you want. Several businesses are doing it and they're doing it successfully. At the beginning I asked myself this question, can I deal with the dropshipping issues? Some might say yes, and that's totally fine. But my answer is no. I value control over my product, the shipping times as much as possible. I want to make sure my supplier is as reliable as possible. So I found that there was more benefits in not doing dropshipping than doing it. So I hope that helped you, enlighten you, and take a moment to rate, share or subscribe to the podcast if you like what you heard today. And I definitely value your support to help other women in business as well.

(09:05):

Thank you for being part of this journey with me. I hope you gained valuable insights and inspiration today to keep growing and taking action towards your goals. Please follow me on social media. Also, follow us on your favorite podcast platform to get notifications every time a new episode is uploaded. See you next time.