Every dropshipper is always eager to find new countries they can target to get better sales and succeed with their Shopify dropshipping store. That's a good approach and you should always be on the look out to test new options which is the core of any successful dropshipping business.
Having said that, there are certain countries which will give you peace of mind when avoided with your Shopify dropshipping store. There is always good and bad in every business and the same goes with dropshipping business.
We've looked at the best countries to target in our last post other than the USA to achieve better profit margins.
Now, let's see which countries you must avoid for your Shopify dropshipping store in 2020 & 2021.
Dropshipping Countries to Avoid:
Mexico is a country with the highest number of fraudulent orders every year and there is a high probability of chargeback flood if your dropshipping store accepts orders from Mexico.
The payment security for online transactions in Mexico is not great and still in it's starting stages which is the key reason for high amount of fraud.
I'd highly recommend to stay away from targeting or accepting dropshipping orders from Mexico to be safe.
This is another country that needs to be avoided in your dropshipping business at all costs.
Again, there is a high rate of payment fraud and chargebacks with Indonesia and you will end up with a lot of mess if you accept dropshipping orders from Indonesia.
Although you might see a couple of orders with high AOV (Average Order Value), don't get excited and start accepting them as it might bite back in the form of chargebacks and disputes for your dropshipping store.
India is a country where it's difficult to find high quality customers for your dropshipping store mainly because of it's vast population.
It's not worth your time and money to target such a huge country with very less number of people who are likely to convert. By the time your ads find them, you'll end up losing a lot of money.
Other thing is that most of the people in India prefer Cash on Delivery method which might not be possible to offer through your dropshipping store. And there are high number of returns and disputes as well sometimes.
You will also end up receiving a lot of cheap traffic as people are very much likely to click but not buy that leads to poor conversion rates and ad spend for your dropshipping store.
For these reasons, I'd recommend avoiding India for your dropshipping business.
This is kind of a no-brainer as China is the hub of dropshipping business and this is the place almost every dropshipper starts with. China is the home to many large dropshipping supplier companies like AliExpress, CJ Dropshipping, UDroppy, Banggood, Chinabrands and a lot more. It is also home to the largest wholesale supplier company Alibaba.
You must avoid China for your dropshipping store in your Facebook Ad targeting as people in China are more likely to buy the same product at a much cheaper price locally than you could offer.
Afghanistan is another country with a high payment fraud rate. You might even observe that the buyer tried to use multiple cards and information trying to make a successful payment.
There will be a lot of disputes, chargebacks and fake orders from Afghanistan and would recommend you to avoid this country in your Ad targeting and not to accept any orders from here especially ones with high order value.
Malaysia is another country where you can see a lot of traffic but very little conversions and that too with high amount of chargebacks and disputed which you'd like to avoid.
Avoiding countries like this will also save you a lot of Ad budget and instead you can spend this on countries that are worth targeting.
Another country where you might end up getting a lot of cheap traffic and no conversions. The population in Pakistan is big enough and it's not worth your time and money trying to get some dropshipping orders from here.
This middle eastern country is quite similar to other Asian countries where you would get a lot of cheap click through rate but no conversions.
E-commerce is not mature enough in Iraq and it's worth avoiding this country for your dropshipping business.
Brazil is another country that is quite similar to Mexico in terms of the high number of fraudulent dropshipping orders. There could be a lot of order disputes and chargebacks as well if you accept orders from Brazil.
Although Brazil is not as bad as Mexico in terms of payment fraud, it is still recommended to stay away from any country that exposes your dropshipping store to fake orders and payment disputes.
Last but not the least, Russia is another dangerous country in terms of high online order fraud as many dropshippers complained about being attacked with high value fake orders from Russia.
Avoid Russia for your dropshipping store at all costs.
Above are the countries with highest risk you must avoid in your dropshipping business. End of the day, you want to avoid any damage to your reputation in front of your payment processors as they will not hesitate to ban you completely if they get a good number of chargebacks or disputes from your dropshipping store.
It's important to keep your orders and customers in good standing at all times to sustain in the dropshipping business.
It's also important to know about chargebacks and how fraudulent orders are placed online to be able to identify and act on them when in doubt.
What is a Chargeback?
Chargeback, also known as a payment dispute is applied by a cardholder when he/she questions a particular transaction and asks their bank to reverse the transaction. There could be 2 key reasons for a cardholder to raise a chargeback.
- Unaware of the transaction
- Product Not Received
Unaware of the transaction
This could happen when a fraudster or a hacker stole a person's credit card and placed an order online using their billing details. This is the biggest pattern we see in most of the fraudulent orders placed online.
For this reason, I'd recommend using the below settings on your Shopify dropshipping store to avoid fraudulent orders.
- Login to your Shopify Dropshipping Store
- Click 'Settings' on bottom left and hit 'Payments'
3. Click 'Manage' on the Payments page
4. Once you are on the Manage page, scroll down till you see 'Fraud Prevention' section.
5. Make sure you check both these options which will protect you from most of the fraudulent orders placed through your Shopify dropshipping store.
The 1st option above 'AVS postal code verification' will verify the postal code entered in the order billing address against the original billing details stored by the bank which will only match for genuine orders as the original cardholder is only aware of the correct postcode.
The 2nd one 'CVV Verification' verifies the CVV information on the card with the card issuing authorities. In case a card is stolen, there are chances that the fraudster has access to the CVV as well. In this case, most of the popular card issuers have security measures to verify the online dropshipping transaction by either sending an OTP to a previously verified phone number of the card holder or some other methods.
Out of these 2 verification methods, the 1st one 'AVS postal code verification' is a much stronger one as the billing address is never present on a card and in cases where a card is stolen, the fraudster will not know the correct billing address and will most likely enter a wrong AVS postal code.
Make sure you check the 1st option as that's the one which will save you from most of the fraudulent dropshipping orders placed online.
Having said that, I did have both these payment security options checked for all my dropshipping stores and I hardly have any fraudulent orders. I probably have 1 or 2 fake orders a month on all the stores combined which is great.
As mentioned above, it all depends on what countries you target through your Dropshipping store. If you steer away from the dangerous countries mentioned above, your Shopify dropshipping store should be safe!