4 Online Businesses That Are GUARANTEED To Fail (Don't Fall For It!)

most businesses fail but there are some businesses out there that literally always fail but people keep trying them anyways because they have no idea what they're getting into now according to the US Bureau of Labor Statistics the business type that is most likely to fail is a restaurant followed by a brick-and-mortar retail store followed by an HVAC business but the problem with government statistics is that they mainly cover brick-and-mortar businesses and these days most people have no desire to start a brick-and mortar store they want to start an online business and leverage the internet so welcome to the 21st century Uncle Sam so here's my list of online businesses that have the highest rate of failure possible in other words if you see an ad to start one of these types of online businesses run away as far as you can they might seem easy but there are a ton of gotas now the first business type that always fails is Aliexpress Drop Shipping AliExpress Drop Shipping is an e-commerce business model where a store takes orders online that are fulfilled by AliExpress in China now if you don't know what AliExpress is it's a an eBay like service based in China where individuals from all over the world can buy Wholesale direct from Chinese companies now because AliExpress is based in China where the labor costs are substantially less you can find products in AliExpress that are significantly cheaper than anywhere else and the huge disparity in cost allows you to make a profit by selling an item at us prices and having it shipped directly from China for example this snoring mouth guard costs only .73 per piece on AliExpress but on Amazon it sells for $26 now the beauty of AliExpress Drop Shipping is that you don't have to carry any inventory your primary responsibility is to take orders online and AliExpress ships the products directly to the End customer so you don't have to worry about storage costs you don't have to deal with shipping and fulfillment you don't have to invest any money upfront for your inventory and all the fake gurus out there advertise AliExpress Drop Shipping as the cheapest way to start an e-commerce business sounds great right well here's what they don't tell you the vendors on AliExpress mostly sell cheap junk with very little quality control so when someone orders from AliExpress they literally Chuck it in a cheap plastic bag without checking if the product actually works and ships it to the End customer and because it's being shipped from China shipping takes an enormous amount of time upwards of 60 days or more so imagine that you're trying to start a legitimate business online selling products and your customer is getting shipped poorly packaged junk that takes 2 months to arrive well guess what you're going to have quite the headache on your hands your customer will complain you'll probably get plenty of chargebacks and you'll have to give many refunds sure you might make a couple of bucks this way but selling crappy products online is a business model that is destined to fail the other risk is that prices on alexpress fluctuate all the time let's say you make a sale for 10 bucks on your website but the price on AliExpress randomly jumps to $15 you'll have no choice but to eat the difference in cost right now there are tons of fake gurus activ ly advertising the Drop Shipping model on YouTube Facebook and Instagram banking on the fact that it sounds so easy and you won't have to spend much money to get started but don't be fooled not too long ago I even had the CEO of spocket on my podcast to talk about Drop Shipping now spocket is a popular drop shipping provider that provides highquality products from the US and Europe anyway when I asked him Point Blank if he knew any customers who've been successful using AliExpress Drop Shipping he said he knew a few but they had moved on to something else now speaking from experience AliExpress Drop Shipping is by far the worst e-commerce business model available because you don't own the product you don't control the filment and the product quality is often terrible you might be able to make a little bit of money Drop Shipping from AliExpress but the profits will be shortlived and the customer support will be challenging because the shopping experience is just horrible your customers will have to wait up to 60 days to receive their order which will often end up being a cheap poorly pack packag product running an AliExpress Drop Shipping Store is even more difficult today because of Amazon FBA many AliExpress suppliers are currently listing their products directly on Amazon at cheaper prices with faster shipping you won't be able to compete by the way if you're enjoying this video so far make sure you sign up for my free 68 e-commerce mini course below that will teach you the right way to sell online now the second online business model that always fails is Drop Shipping from Amazon to eBay eBay Drop Shipping from Amazon is when you find inexpensive products on the Amazon Marketplace and then sell them on eBay at a profit for example right now someone is selling our exact same products on eBay at a substantial markup from Amazon and here's the eBay listing meanwhile the exact same product is listed on Amazon at a significantly cheaper price now why would someone spend $24.83 for a set of linen cocktail napkins on eBay when they can buy it from Amazon for only $17.95 well the reason is because some people like to shop on eBay and some people like to shop on Amazon and the marketplaces don't necessarily overlap in fact similar pricing inefficiencies exist across almost all marketplaces in any case an eBay seller will find a cheap product on Amazon and then list it on eBay then when an order comes in the seller will buy the product on Amazon and have it shipped directly to the buyer and pocket the difference after fees this particular eBay seller of my products will make roughly $5 for doing practically nothing sounds great right no risk no upfront costs it's easy right well first off all items drop sh from Amazon will arrive in an Amazon branded box as a result this will cause some major confusion with your customers in addition there's no guarantee that an item sold on eBay will be in stock on Amazon product listings on Amazon change all the time and you have to make sure that the item you sold matches the one that you were buying but perhaps the most important thing to consider is that eBay drop check from Amazon is expressly prohibited in both eBay's and Amazon's terms of service with a single email to eBay I could have all the above eBay listings shut down in an instant however I've chosen to leave them up for now because these listings aren't harming My overall business again Amazon eBay Drop Shipping is just temporary money you might make a couple bucks here and there but you'll eventually get shut down now the next business type that almost always fails is a subscription box service now for those of you who are unfamiliar with the business model a subscription box service is where customers pay a recurring fee usually monthly to receive a package containing a variety of different products these boxes are typically curated based on specific themes interests consumer preferences and are delivered directly to the customer's doorstep now most subscription box business owners are attracted by this steady predictable income once you sign on a customer in theory they will stay on for a long time and continue to pay you every single month also this business is scalable because you're shipping the exact same products to to all of your customers but here's why this business model is destined to fail eventually curating a variety of different and interesting products every single month is a logistical Nightmare and you'll be constantly running on a hamster wheel trying to negotiate deals with many different suppliers now on my podcast I interviewed my friend Mandy Rose a while back and at the time she was running a sixf fig business selling subscription boxes for moms for about $25 a month every month she would ship 5 to 10 items per box that had a perceived value of over 25 bucks and things were going great for about 8 months until she started having major supply chain issues every single month she'd have to speak with five to 10 different suppliers and negotiate down prices so that she could still make a profit on the box after paying all the different product costs in the end she was literally on calls every single day hunting down new products now this is in start contrast to running an e-commerce store where you only had to deal with the exact same set of suppliers for all of your products running a subscription box service sounds like fun on the surface but it's an extremely labor intensive business that will feel like a job because you'll be chasing down new suppliers for every box you ship now the next online business model that is destined to fail is Amazon Drop Shipping Amazon Drop Shipping is an e-commerce business model where you sell physical products on Amazon without keeping inventory instead products are only purchased from A supplier after the customer places an order so basically Amazon and your supplier handles all the Lifting for you such as shipping and handling and customer service when you make a sale on Amazon you simply notify your drop shipper and they ship your products directly to the Amazon Customer on your behalf now on the surface this business model sounds great you don't have to deal with inventory you don't have to deal with customer service because Amazon handles it all you don't have to spend any money up front except for a $40 a month Amazon professional sellers account you just sit back list products and collect money right well the devil's in the details when you drop ship on Amazon you must abide by Amazon's strict code of conduct if you consistently violate any of the following rules your account will get banned first off the total number of orders shipped with defects must be less than 1% an item is considered defective if it receives negative feedback a chargeback or an a toz claim and as soon as your order defect exceeds 1% your account is going to get suspended your order cancellation rate must be less than 2.5% if an order is canceled either by you or the customer before a shipping confirmation is made it goes against your cancellation rate if the frequency of cancellations exceeds 2.5% you're going to get suspended this commonly happens if you make a bunch of sales but if your supplier is out of stock your late shipment rate must be less than 4% if your drop ship supplier consistently ships products out late you risk getting your Amazon account suspended so basically the supplier you work with must be perfect in order for you to make money with this business model now on my podcast I interviewed my friend John rampton who used to run a near 8 figure Amazon Drop Shipping business selling containers online his business was doing great and he ran it pretty much by himself because the business was so hands-off but one holiday season one of his suppliers ran out of stock and forgot to update their systems all of a sudden Jon was getting a ton of orders for products that his suppliers could not fulfill and as a result he had to cancel those orders exceeded the 2.5% limit and got his account suspended now after this one infraction he managed to get his account back after about 3 weeks but soon after another terrible thing happened a snafu with one of his Drop Shipping suppliers caused a series of products to be delivered late his late delivery rate exceeded 4% for the month and he was suspended again but this time for good and JN was devastated now imagine losing an eight figure business overnight based on factors outside of your control well this is exactly what happened to John it's just not worth the risk now here's what I've learned about running a business after running two seven figure businesses for the past 17 years it takes as much effort to run a real long-term business as it does running a get-rich quick type of business so why not invest your efforts into something that is built to last what do you think of these business models anyone out there running a successful business that I mentioned in this video let me know in the comments below but now that you know what businesses to avoid make sure you watch this video here on businesses that never fail

Channel: MyWifeQuitHerJob Ecommerce Channel

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Keywords: make money online, best business ideas, side hustle ideas, how to be successful, profitable business ideas, small business ideas, business ideas 2024, make money online 2024, online business, entrepreneur advice, online business ideas, make money online fast, make money online today, best business ideas 2024, best business ideas for students, side hustle ideas 2024, side hustle ideas online, side hustle ideas to make money, side hustle ideas for beginners

Id: FAEfEpjEgd0

Length: 11min 32sec (692 seconds)

Published: Tue May 28 2024