You may be having two problems. The first may be the Rubbing Alcohol.
The commercial rubbing alcohols are Isoproply Alcohol that are only 70%
alcohol, the rest being water. Water in combination with the oil, and
the wax that may be in the in shellac will make for a finish that is
soft with no gloss and a very short life. Better to use a good quality
of Denatured Alcohol, Everclear from the liquor store, or buy reagent
grade (99% purity) Isopropl from the pharmacist. Denatured is the
cheapest source. Alcohol will absorb a lot of moisture from the air, so
buy a small can, keep it closed, and store in a dry place.

The common problem with all friction polishes is one of application.
The objective is to lay down a film of pure uncontaminated shellac on
the wood surface. You are using a mixture of thinned shellac, oil,
water (from the alcohol), and wax from the shellac. Some commercial
friction polishes have added more wax to make them easier to apply. The
application must generate enough heat to bring all of these
contaminants to the surface where they can either evaporate or be
picked up by the application rag. That requires finger burning hot. Hot
enough that you will need a thicker pad under your fingers. Failing to
do this, the contaminants remain in the finish and it will be soft and
dull. I have articles on using Friction Polishes, and finishing pens
and small things that might be useful to you on my Website at
http://www.woodturnerruss.com/FinishingSecrets.html