Top 10 Mistakes Beginner Dropshippers Make (Shopify)

Summary

This video breaks down the top 10 mistakes beginners make when starting a dropshipping business and how to avoid them. The creator emphasizes critical steps like checking country-specific shipping times, setting realistic expectations, starting with an adequate budget, and choosing problem-solving products over generic items. He warns against selling copyrighted products, neglecting profit tracking, ignoring credit card rewards, and failing to establish a proper business entity. The video also highlights the importance of bookkeeping and tax preparation. Overall, it provides actionable guidance to help new dropshippers avoid costly pitfalls and build a more sustainable, scalable business.

Takeaways

• 🚚 Always check shipping times for each target country to avoid long delays and unhappy customers.
• 🎯 Set realistic expectations—dropshipping is not a get-rich-quick scheme and requires time and effort.
• 💰 Start with a sufficient budget (ideally $2,000–$3,000) instead of expecting big results from $100–$200.
• 🛠️ Focus on problem-solving viral products rather than random trinkets or highly competitive fashion items.
• 🛍️ Avoid general stores when starting; instead create a niche or one-product store to improve branding and conversions.
• 🚫 Never sell copyrighted or trademarked products such as character costumes or branded merchandise.
• 📊 Track real profit using apps like Lifetimely or OrderMetrics to understand margins and scale effectively.
• 💳 Use business credit cards to earn cashback and rewards on ad spend—potentially saving thousands per year.
• 🏢 Set up a proper business entity (e.g., sole proprietorship → S-Corp) as revenue grows to improve tax and liability management.
• 🧾 Stay on top of bookkeeping and taxes with tools like QuickBooks and work with a tax professional to avoid end-of-year stress.

Q & A

Why is checking shipping times important for drop shipping?

Checking shipping times is crucial because if you fail to consider the differences in shipping durations for various countries, you may end up with disappointed customers. For example, a shipment to the United States could take 14-17 days, but to Canada, it could take up to two months. This could lead to refund requests and chargebacks, which harm your business.

What is the mistake most new drop shippers make regarding their goals?

New drop shippers often set unrealistic expectations, thinking they can make significant money quickly. Drop shipping takes time, and your initial focus should be learning and testing products. Expecting overnight success can lead to frustration and early quitting.

How much budget should beginners allocate for testing products in drop shipping?

A budget of $2,000 to $3,000 is recommended for testing products in drop shipping. A smaller budget may not provide enough capital to find a winner, which could result in losing the money quickly and giving up. If you don't have this amount, it's advised to work at a job and save up before starting your business.

Why is it essential to focus on viral products that solve problems?

Products that solve real-world problems are much easier to sell than random items, such as trinkets or jewelry. For example, a knee brace that relieves pressure and helps people walk better is a more compelling product than a simple novelty item. Customers are more likely to purchase products that offer a solution to their problems.

What is the drawback of starting with a general store in drop shipping?

Starting with a general store can spread your efforts too thin, making it difficult to focus on specific products and market them effectively. It's better to focus on a niche store or a one-product store to dedicate the necessary time to merchandising, creating good product descriptions, and working on effective advertising.

What types of products should drop shippers avoid selling?

Drop shippers should avoid selling products that are copyrighted or trademarked, such as products featuring characters like Spider-Man, logos like those of NBA teams, or merchandise based on popular franchises. Selling such items can result in store shutdowns and legal consequences.

How can drop shippers track their real-time profit?

Drop shippers can use apps like Life Timely or Order Metrics to track their real-time profit. These apps integrate with platforms like Facebook and Google ads, as well as product costs and shipping fees, to show the actual profit at any given time, helping to scale effectively.

Why should drop shippers consider using credit cards for their business expenses?

Using credit cards for business expenses can help drop shippers earn rewards, such as cashback or points, which can be used for business-related costs like flights, Airbnb bookings, or marketing. Specific business credit cards, like Chase Business Inc. and American Express Business, offer cashback on marketing expenses, which can add up significantly over time.

When should a drop shipper set up a legal business entity?

A legal business entity should be set up once the business starts generating revenue. Initially, a sole proprietorship may be sufficient, but as the business grows, an S-corp or another structure may be more tax-efficient. Consulting with a certified tax professional is recommended for guidance.

How can new drop shippers avoid tax-related stress during the year-end?

To avoid tax stress, new drop shippers should stay up-to-date with their bookkeeping throughout the year. Using tools like QuickBooks can help track financial data. At the end of the year, it's important to consult with a tax professional, submit a profit and loss statement, and ensure taxes are filed correctly to prevent last-minute stress.