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Fanno is About to Shut Down? What Can We Learn?

  • system
  • 2022-07-04 17:53:43
  • 1 min read

Updated: 2022-07-11 09:54:09

Do you still remember Fanno, a shopping app launched by The ByteDance last year before Black Friday? Now half a year has passed, and Fanno seems to be just a flash in the pan.


According to multiple sources, the Fanno team had been disbanded in April and the advertising was stopped. It seems not in a good situation and is likely to be shut down soon.


So what caused Fanno to be where it is today? For dropshipping business, what can we learn?


The Reasons Why Fanno Took a Nosedive?


First of all, there are objective reasons. Fanno, unfortunately, experienced a time when the prices in Europe raise due to the conflict between Russia and Ukraine. People’s willingness to shop online has decreased. What’s worse, while oil prices and freight rates have risen due to the wars, Shanghai was severely affected by the pandemic. The supply chain and logistics of Fanno have been Affected.


As for subjective reasons, Fanno mainly sells light, small, and cheap products. Sellers have little profit margins from products so they mainly rely on platform subsidies. But the subsidies are limited. Therefore, sellers can only reduce losses in other ways like refusing to honor discounts, canceling orders without authorization from the consumer, or persuading consumers to cancel orders for reasons of non-delivery or out-of-stock.


Fanno also has shortcomings in logistics, warehousing, payments, etc. The efficiency of delivery is getting worse and worse. It takes 3-5 weeks to deliver and the packages may lose.


Besides, the quality of the products on Fanno depends on different sellers. It’s hard for Fanno to control, leading to low overall customer satisfaction. When facing the complaints, Fanno's handling of returns and refund applications was not ideal.


Fanno is facing multiple strong opponents, including Amazon, AliExpress, eBay, wish, and other major e-commerce platforms. However, it does not have a mature e-commerce service system and has no strong support in logistics, warehousing, payment, etc. From the current trend, perhaps shutting down Fanno in the future is the best solution for the ByteDance to avoid causing more losses.


For dropshipping business, what can we learn?


There are many people dropshipping on big e-commerce shopping platforms like Amazon and eBay, which have a huge traffic base. Dropshipping stores can quickly get exposure directly through the platforms. Besides, these platforms also provide subsidies and some protection policies for merchants.


Although there may be lots of limits and rules on large platforms, dropshippers can quickly start up their businesses with the help of the platforms, compared to building a store from zero with Shopify.


Fanno had support from the huge traffic of TikTok. It once had the potential to become a large emerging e-commerce platform like Amazon. And those who want to start their dropshipping businesses on large platforms must have been interested in Fanno and have expected Fanno could open the permissions for European merchants to settle in.


Unfortunately, Fanno is no longer possible. There may be other e-commerce platforms similar to Fanno emerging in the future. If so, how to judge whether a new e-commerce platform is suitable for your dropshipping business to settle in?


First, you have to figure out the traffic and audience of the platform. For example, Fanno has huge European traffic and performs best in Italy and Britain. It provides cost-effective comprehensive categories, and its audience is very suitable for most dropshipping businesses. But if you want to dropship high-end products or dropshipping to Brazil or the US, then such a platform is not for you.


Secondly, the platform policy is very important, especially the policy for dropshipping. For example, Amazon has a dedicated dropshipping policy and policy on the categories of products that are allowed to be sold. You need to read these policies carefully to ensure that you can run your business smoothly.


The sales and promotion plans, approval conditions, after-sales policies, subsidy and preferential policies, promotions, etc. are also worthy of attention, which are related to the cost, difficulty, and profit margin of starting your dropshipping store on the platform. And guaranteed profit margin is the key point.


To occupy the market as soon as possible in the exploring stage, the products on Fanno are all cheap and cost-effective. Although Chinese sellers on Fanno seized the early traffic dividends and obtained platform subsidies, the final profit margin was still pitifully low, which led to the dishonesty of sellers to consumers to a certain extent. The final results proved that Fanno was no longer possible or suitable for European merchants or even dropshippers to settle in.


If you are looking for a Chinese supplier suitable for Amazon dropshipping, you can try to upload your orders through SourcinBox and enjoy professional fulfillment services.


For merchants who are dropshipping using Shopify or some other store-building platforms, we also have three tips for you:


Carefully use low-price strategies


Low-price strategies are not suitable for all products and stages. Blindly relying on low prices to attract consumers not only squeezes your profit margins but also reduces consumers' expected value of your products and your store will become cheap.


Therefore, please carefully consider the pricing of your products. The pricing can not be too lower than the market average price while being competitive. You can provide product discounts on the premise of ensuring sufficient profit margins.


Focus on customer shopping experience


Providing consumers with a high-quality shopping experience is one of the keys to enhancing core competitiveness. The shopping experience involves many aspects, including store display, promotion strategy, shipping timeliness, customer service, etc. You can learn about four ways to enhance the customer shopping experience in our article.


Work with dropshipping suppliers with a complete supply chain


As a small business, dropshipping needs to rely on a third-party supply chain and logistics distribution system, that is, a third-party dropshipping supplier. Partnering with AliExpress is a great option, but for lower costs and better delivery and after-sales service, you can check out our list of the best dropshipping suppliers.


Final Words


Matters about Fanno, a hot topic that many people in the e-commerce field are discussing, is worth e-commerce merchants, including dropshippers thinking deeply about. The emergence of new platforms can bring new opportunities, but it will also bring huge challenges. Therefore, whether you choose a dropshipping platform or a supplier, you need to be sensible and weigh the pros and cons.


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