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5 Mistakes to Avoid when Starting a Dropshipping Business


When you decide to start your own business, it is an endeavor that requires research and planning, as well as some experience in your chosen field, including the business of dropshipping. Dropshipping may sound like an easy thing to do, but there are a lot of scam businesses out there, so you need to do things right in order to prove yourself and your business.

Mistake #1: Starting without Research

When you start a drop shipping business, it's important to fully understand what you will be doing as a dropshipper. If the terminology is confusing and if you don't understand, potential customers won't understand either.

A dropshipper, in technical terms, means a business that typically stores, packages and ships items or products for retail sellers. A dropshipper is a 'behind-the-scenes' type of entity. For some dropshippers, it goes even further and they don't carry or store the merchandise, they simply do the shipping.

However, in general terms, and what most people think and understand, is that a dropshipper is the retailer who does not carry stock, but simply sells for the manufacturer.

Mistake #2: Avoiding the Legalities

There are certain steps that are required when you start a business. These steps can't be ignored or avoided, or there will be legal consequences for you later. The most important steps are to register your business with the proper county, city or state entities. You need to apply for a business license, a business name and a business tax identification number (BIN). Some, if not all, of these steps will require a fee; which brings the next mistake to avoid.

Mistake #3: Don't Underestimate Business Costs

Do not be fooled into thinking that starting a business, even a dropshipping business, will be a free and easy task to accomplish. Starting a business has an initial investment, no matter what the business is. This is particularly true if you plan to carry any inventory. The cost of shipping and supplies should not be overlooked. A computer and Internet service are necessities as well.

Mistake #4: Choosing the Wrong Product or Manufacturer

As a dropshipper, it is vital for you to choose a product that will be of high quality and that is in demand. Without those elements, it is unlikely you will produce an income. Along the same lines, it is vital that the manufacturer you choose is one with a solid reputation and quick turn-around. If customers are not happy with the product or the service, your business will not last long.

Mistake #5: Filing Your Taxes

As with all legitimate businesses, your dropshipping business is liable for taxes. It is your responsibility as the owner to make sure you file business, as well as personal taxes.

Becoming a dropshipper will take some time and experience, but will be worth the investment. You can research sites like eBay to find out which products sell the best and start by listing a few items at a time.

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