Published - Mon, 16-Oct-2023

Dropshipping in South Africa | What can go wrong?

Dropshipping in South Africa | What can go wrong?

Take our FREE Takealot seller course today here: https://skillspace.co.za/home/course/takealot-seller-course/51

Dropshipping is a business model where a seller sells a product without holding any inventory. The model has been holding popularity for a while in South Africa. However, most dropshippers 'drop their business' in South Africa after 6 months to a year. Why? In this article, let's understand dropshipping in South Africa and the precautions you should take to make your dropshipping business successful.

What is Dropshipping in South Africa?

In simple words, dropshipping in South Africa is a middleman business. As a dropshipper, you connect a warehouse directly to the demand in the market. This way, you eliminate the traditional upfront costs of starting a business.

A dropshipper usually has an online website where they display the products and take orders. It is important to be transparent about prices as, even though you are sourcing a product from a warehouse or a supplier, you will still have to pay some extra charges, such as transport and handling fees, customs fees (if ordering from overseas), taxes, and so on. Therefore, even if sourcing a product directly from a warehouse should be cheaper than the retail price, these extra charges add up to the cost. This is one of the reasons why dropshippers actually earn less profit on their sales.

So is dropshipping really profitable? It can be if you find the right customers and the right supplier for the products you want to sell.

The Problems with Dropshipping in South Africa

In most cases, the cons weigh more than the pros when it comes to dropshipping. Why? Because it is difficult to find the right niche for your ideas. Secondly, most entrepreneurs fail to understand that the profit they would make via dropshipping would really be insignificant in the beginning. Dropshipping is a great model, but most expect to get rich in a shorter amount of time. This is primarily why many dropshippers get demotivated to keep up with the business, or even begin to cut corners to earn more profit.

Like any other business, regardless of its low upfront costs, Dropshipping business also requires dedication and passion to make it successful. Yes, you can do this business from within your comfort space, does not mean it is an easy business.

The two main problems you face in dropshipping are logistics and customer service. As a dropshipper, you are not in control of how the product will be delivered. It is usually done by your supplier. Secondly, as you are not involved in the actual operation of dealing with the product, you cannot really guarantee the product quality by yourself. So in this case, you may take a longer time to resolve customer complaints, which really hampers your business as well.

I understand the problems, what should I do?

As a dropshipper, it is important to deliver good quality products and good customer service. These are the two pillars of making your dropshipping business successful in South Africa.

The idea of your dropshipping business begins with understanding the niche, market demands, and competition. If the competition is too saturated, you need to rethink your plan. Otherwise, once you figure this out, your next move is to find the right supplier. In South Africa, we highly encourage you to find local suppliers to streamline logistics and shipping costs. One way you can do so is by finding best-selling products on Takealot. Finding international suppliers from platforms like AliExpress may incur additional costs like customs, currency differences, and taxes.

Once you find the right supplier that is trustworthy to your standards, you may start dropshipping via your website. Remember, you are just a middleman, so you have no control over product manufacturing, quality, or delivery. This is exactly why finding the right supplier is the most crucial part of dropshipping.

To sum up

Dropshipping in South Africa takes patience, determination and passion. To get your dropshipping business right, you should do the following.

  • Find the right supplier, best if it is a South African supplier.
  • No cutting corners on the customer service. Do your best to resolve your customers' doubts and grievances.
  • Make sure your website is up-to-date and visually good.

Dropshipping may look easy, but finding the right customers and suppliers is the key to making it successful. Are you interested in starting your own dropshipping business? It's completely legal in South Africa. Skill Space is currently working on a course to help aspiring dropshippers in South Africa. Meanwhile, if you have any questions, feel free to reach to us via the message tab and we can help you out.

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