is dropshipping dead

Is dropshipping dead? This is a question I often receive from our readers.

We’ll go through an overview of the dropshipping business model and address digital entrepreneurs’ concerns on whether the dropshipping business is dead or thriving. 

So, if you are concerned about the dropshipping business’s status, this article is for you. 

In summary, this article will cover:

  1. What is dropshipping?
  2. A brief history of dropshipping
  3. Is dropping shipping worth it? Or it is dead

Let’s get started.

What is Dropshipping?

Dropshipping allows you to sell the suppliers’ products without stocking your shop. Once a customer places an order, you pass it to the supplier who ships the products directly to the customer.

As an entrepreneur, you are an intermediary. You don’t stock or deliver the products. You only list the products in your online shop. You’ll only need a starting capital for your online shop. When it comes to buying the products, you’ll use the customer’s money to place the order, and the difference between the actual cost of the product and the client’s payment is your profit.

A Brief History of Dropshipping 

Long before the internet took root, dropshipping was thriving offline. In the 1950s, dropshipping took place through the mailbox. A company would print a catalog of many products and mail them to homeowners. 

If interested in a product, the homeowner would place an order by mailing back or calling the printing company with their order and the payment. 

The printing company would forward the order to the supplier or manufacturer, who would then ship the products directly to the customer. 

Then it was referred to as mail order. 

Is Dropshipping Worth It? Or It Is Dead

Throughout the years, dropshipping has evolved into what we know today. The internet has replaced the mail order. Now, product catalogs are listed in online stores. You only need to click a button, and you’ll receive your purchase at your doorstep. 

With such advancement, the trends in the dropshipping industry keep evolving. Many people are finding it harder to establish and maintain an eCommerce business using the dropshipping business model. Hence, the question, “is it dead?”

To sort this out, let’s discuss three key areas that have made many people question the validity of the dropshipping business. 

Increased Competition

Dropshipping has been around for ages. Many people have joined the business, and thus it has reached its saturation point. All the profitable niches are taken so you can’t make decent money from it. This allegation could be true, but it isn’t. 

Many business models have been around for ages, whether offline or online; talk of direct sales, brick and mortar stores, or maybe franchising. People replicate these same models every day and succeed or fail. So, the competition problem is not an isolated case to dropshipping. 

It’s only a problem for anyone who set up an online store to make quick money without internalizing the dynamics of the dropshipping business. 

I’ll blame the self-proclaimed gurus who went around preaching “make money easy and fast through dropshipping”. Their chants lured people into thinking you only need to set a shop online, sit back, and money rolls in. What a lie! Many entrepreneurs joined, but only a handful survived.  

Dropshipping is competitive, and small businesses may find it increasingly harder to penetrate the market. However, there are a dozen strategies to differentiate and set yourself apart from the pack. For starters, you can get a niche that focuses on wants rather than needs. Also, stay ahead of your competitors by selling the best and newest brands in town.

Cost of Advertisement

The cost of advertisement on different social media platforms has gone up over the years. Facebook and Google ads are expensive for small businesses to sustain. You’ll need consistent sales to get your ad across a wider audience. 

So, does the cost of advertisement show that dropshipping isn’t a worthwhile venture? Maybe not. Let’s face it. The cost-of-living today is higher than it was ten years ago. In the next decade, it will be even higher. We’ll have to improvise alternative ways to sustain our daily expenses. 

Similarly, you must adjust, learn digital marketing, and implement a marketing strategy that your customers can’t resist. You can also hire an expert to optimize your ads to the target audience. 

This way, when you spend on an ad, there are increased chances of return on investment. Otherwise, you’ll be advertising blindly, which will lead to double loss.

Partnership with Reliable Suppliers

The biggest blow in dropshipping is the duration products take to reach the customer. It could range from two weeks to 30 days. When clients don’t know about this, your social media accounts will be flooded with complaints. Customers will call PayPal or Stripe to report your fraudulent activities. You are a scam to them. 

Many entrepreneurs have closed shops because the complaints led to their Facebook account and payment services being suspended. 

It is important to have a supplier who sticks to their words. Plus, you can seek partnership with local suppliers to minimize the client’s headache of waiting for delivery for ages. A good supplier will also give you an easy time in the case of refunds. Lastly, let your customers know in advance how long delivery takes.

So Is Dropshipping Dead?

Dropshipping is ablaze. If you are passionate about it, you’ll put more energy into creating a real business. Most new entrepreneurs fail because they don’t take the time to understand and implement proven strategies. But you can’t make that mistake because you already know the truth; dropshipping is worth it if you dedicate the time and resources. 

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