Top 10 Mistakes to Avoid Before Starting Dropshipping Business

TLDR: The video discusses the top ten common errors made when starting a dropshipping business and provides actionable tips to avoid them.

Dropshipping Insights

Checking Shipping Times

🌍Different countries have specific shipping times that need careful monitoring.
🕰️Inconsistency in shipping times can lead to unhappy customers and potential dropshipping business loss.

Setting Goals & Budgeting

🎯Dropshipping is a long-term business that requires realistic goal-setting.
💸Starting with a substantial budget can significantly assist in product testing and business operations.

Choosing the Right Products

🔎Choosing viral, problem-solving products can give higher sales than generic items.
🎁Dedicating time to merchandise few products better can yield better results than adding countless dropshipping products.

Avoiding Copyright Violations

⚠️Selling copyrighted products can lead to legal hassles and potential business shutdown.

Tracking Profits and Credit Card Use

💼Understanding your daily profits helps in better business decisions.
💳Credit cards can offer reward points which can be beneficial in the longer run.

Legal Setup and Tax Payments

🏢Setting up a legal business entity can provide tax advantages and legal protection.
🧾Maintaining regular book-keeping eases the process of tax filing.

Video Summary

00:00: 💼 The speaker discusses the top 10 mistakes to avoid when starting a drop shipping business, stressing that making even one could ruin the entire business. They promise to share a document of 10 viral winning products if the video receives 4,000 likes. A key tip provided is to always check the shipping times to different countries – failing to do so could result in unhappy customers and negatively impact success in drop shipping.
Key ideas:

• Making even one of the top 10 mistakes could ruin a drop shipping business.
• They will release a document of 10 viral winning products if the video gets 4,000 likes.
• It is crucial to check shipping times to different countries in drop shipping.
• Neglecting to check shipping times could result in unhappy customers which impacts the success of the business.

01:31: 💼 The text discusses the importance of setting realistic goals in business, particularly in the world of drop shipping. It warns against viewing this type of business as a get rich quick scheme, highlighting the need for time, effort, and learning. It emphasizes not to expect instant sales or profits and to always start with a realistic budget. The text also notes that building a successful drop shipping business includes navigating various challenges and setbacks.
Key ideas:

• Setting realistic expectations is important for success in business, especially in drop shipping. This is not a get rich quick scheme.
• Starting a drop shipping business requires time, effort, and a lot of learning.
• Success in this business model does not come instantly. Initial profits are typically small, and substantial growth comes over time.
• It’s necessary to have a realistic budget when starting a drop shipping business.
• Building a successful drop shipping business includes overcoming various challenges and hurdles.

03:09: 💰👛🔎📦 The speaker is advising against starting a drop shipping business with only a hundred dollars. Instead, they recommend a starting budget of two to three thousand dollars specifically for testing products. They further caution to focus on viral products that solve problems instead of aiming for highly competitive niches like fashion. They illustrate their point by referencing a successful product in their range – a knee brace.
Key ideas:

• Recommended starting budget for a drop shipping business is two to three thousand dollars
• Focusing on products that solve problems rather than fashionable items advised
• Speaker uses a knee brace as an example of a successful product

04:46: 💡 The text discusses the advantages of selling problem-solving products versus random trinkets. It also criticizes the general store approach for newbies because it promotes quantity over quality, suggesting that a better approach would be starting with a niche or single product store. These stores focus on efficiently merchandising fewer products and can create a reputable brand as they target a specific problem. Lastly, it warns against selling copyrighted or trademarked items.
Key ideas:

• Selling products that solve a real-world problem is easier than selling random trinkets.
• A common mistake among beginners is starting with a general store approach, which places emphasis on quantity over quality.
• Starting off with a niche store or a one-product store allows for better merchandising and potential for a reputable brand.
• Selling copyrighted or trademarked items is discouraged.

06:30: 💰 The text advises against selling products with characters or references to other companies to avoid legal complications. It also emphasizes the importance of understanding daily profits using apps like life timely or order metrics which provide real-time tracking of profits. Knowing the exact profit helps in deciding when to scale the business, as it enables one to evaluate if they can afford more money on ads.
Key ideas:

• Avoid selling products with characters or references to other companies to prevent legal issues.
• Using apps like Life Timely or Order Metrics can help track real-time profits.
• Understanding the exact daily profit can guide decision-making on when to scale the business.

08:08: 💳🏢 The text discusses two common mistakes made in drop shipping businesses. The first is not taking advantage of credit card reward programs, particularly ones that offer cash back on marketing expenses. The author argues that these programs can lead to significant profits over time and recommends specific cards like the Chase Business Ink and American Express Business Gold Card. The second mistake is not setting up a legal business entity. The author emphasizes the importance of determining the type of business one wants to operate, especially as their business scales, for more beneficial tax outcomes.
Key ideas:

• Common mistake in drop shipping business is not using credit card rewards programs that offer cash back on marketing.
• Specific cards recommended include the Chase Business Ink and American Express Business Gold Card.
• Credit card rewards programs can lead to significant profits over time.
• Another error is not establishing a legal business entity.
• Determining the type of business is important for better tax outcomes as the business scales.

09:47: 💼 The author emphasizes the importance of financial and legal planning when running a business. Key recommendations include considering forming a corporation to limit liability and ensuring that taxes are correctly dealt with. The author also advises hiring a tax professional to help structure business taxes, and the use of Quickbooks or similar software to keep track of daily bank transactions for ease of reference during tax filing season.
Key ideas:

• Consider forming a corporation to limit personal liability in business operations
• Successful businesses need to stay informed about tax responsibilities and meet these obligations timely
• Consulting with a certified tax professional can help structure taxes correctly
• Keeping books up to date with software like Quickbooks can streamline the tax filing process

11:20: 📊 The text talks about the importance of self-processing a profit and loss statement rather than relying on an accountant, highlighting this as a common and costly mistake made by beginners. Along with other advice, the author believes these tips will guide beginners to successfully run a drop shipping business. The author also encourages viewers to like, subscribe, and check tutorials on starting a drop shipping store.
Key ideas:

• One can submit profit and loss statements to accountants for easier processing
• Common mistake made by beginners is to fully rely on accountants for financial processing
• Advice was given to avoid the 10 most common and costly mistakes made by beginners in the business
• The author believes these tips will lead to a successful drop shipping business
• Viewers are asked to like and subscribe to the video and to check out tutorials on starting a drop shipping store

Dropshipping Q&A

Why is checking shipping times important in dropshipping?

Shipping times differ across countries and it is important to be aware of these to deliver products within acceptable timelines, ensuring customer satisfaction.

What products are recommended to sell in dropshipping?

It is recommended to sell viral, problem-solving products instead of generic items to increase sales.

What is the benefit of using a credit card in dropshipping?

Using a credit card for business purposes can reap reward points, contributing towards additional savings.

Comments On Dropshipping

TLDR: Most commenters found the video informative and helpful for potential dropshipping startups. Some viewers complained about the speaker’s voice and delivery style, while others asked specifics about the business model, including startup costs and potential profits.
Negative: Some viewers disliked the presenter’s voice and delivery style, finding it irritating. A few commenters also complained about the high start-up costs discussed in the video and expressed concerns about their affordability.
Positive: Viewers praised the video for its realistic and detailed explanation about setting up a dropshipping business. They appreciated the comprehensive information, which they considered extremely helpful in their research and business startup preparation.
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