Is Dropshipping Dead? 5 Reasons Why Most Dropshipper Fails.
- Bilal Uddin
- 1 comments
Here is my answer:
No, dropshipping is not dead and it will be a profitable business in the years. However, it would definitely become more and more competitive as many people consider it easy access to the ecommerce industry.
I have been witnessing a trend every year where an anxiety rise all of a sudden and everyone starts asking, is dropshipping dead?
This perpetual debate about the ‘dropshipping not working’ is becoming more prevalent with every coming year. However, in 2020, the debate catches up more fire due to the after-effects of COVID-19, and the whole world went into lockdown.
Major dropshipping suppliers shut down thier functions at the start of 2020 such as CJ Dropshipping and it seemed that dropshipping was actually about to come to an end.
China was to first to affect with COVID-19 and the majority of dropshipping functions relies on Chinese supplier. However, things take a surprising turn when China overcomes the Pandemic quickly and soon came back on track as normal.
Is Dropshipping Dead in 2020?
No, dropshipping is pretty much alive in 2020. The global lockdown enforces the small businesses to shift towards ecommerce business and what’s surprising is that the interest of people in dropshipping business took an unprecedented rise.
Dropshipping is one of the easiest entrance in the ecommerce industry. Many people see this as an opportunity in the lockdown and more dropshippers come into the market.
The simple answer is that dropshipping does not die it is pretty much working and still profitable, however, the process of working in changes every year.
But if dropshipping is not dead then why do most dropshippers fail to succeed?
5 Reasons Why Do Dropshippers Fail?
Let’s understand some major factors that lead to the failure of the dropshipping business.
1. Lack of Understanding
Many dropshippers jump into this business without actually completely learning ins and outs of dropshipping. A primary misconception about dropshipping is that it is a quick money-making business that does not require any efforts.
Dropshipping is not easy it needs skills that have to be learned.
Various factors determine the success of the dropshipping business including the unique product hunting methods, effective target marketing, and timely shipments.
A decent knowledge of product hunting, social media advertisement, and customer support is required to build a successful dropshipping business.
2. Choosing a Fad Product Instead of Trending Product
I came across many newbie dropshippers who decided to go for the hyped products that soon get saturated.
A few months ago I came across a dropshipper who was selling a Mini Projector and asked for my help in targeting. At that time I did not know about the product.
Initially, we were thinking the problem is in Facebook targeting.
So, we focused on increasing the CTR of ads.
But when I get to know the product, it was not difficult to realize the product has been saturated.
This kind of hyped product may help you to generate some initial profits but soon you will be burning money on Facebook ads and not finding any relevant and will declare dropshipping as dead.
38 Best Dropshipping Products
91 Trending Products to Sell Online
3. Start with The General Product
Trending product + unique element is the ultimate formula for winning dropshipping products. The reason for choosing a unique product is that dropshipping shipment takes more time than ecommerce marketplace shipment. The customer will only wait for 10-15 days if the product is somewhat unique and not easy to find.
Let’s say you have a coffee niche dropshipping store where you sell mugs and other coffee-related stuff.
If you are selling these mugs in your store, do you think your customers will wait 10 days for the delivery? No!
They would rather buy it from Amazon in a single day and maybe for a much cheaper cost. When you give the customer a chance to buy from anywhere then you are in big trouble.
Find Winning Dropshipping Products in 5 Minutes:
4. Wrong Targeting
The most difficult task in the dropshipping business is to drive relevant traffic to your store that could easily convert. Social media advertisement is one of the primary sources to drive traffic in the dropshipping business and I would say it is the most crucial task in the whole dropshipping business.
Running profitable Facebook ads need some expertise. Most of the dropshippers do not have the experience with the Facebook advertisement but try to do everything by themselves and end up incurring losses in thier marketing.
Related Article: How to Advertise on Facebook in 8 Steps
5. Selecting the Wrong Supplier
The supplier works as a team member in the dropshipping business. The majority of the work in the dropshipping business falls in the supplier’s department and if you show some negligence in endorsing the supplier for your business then the whole business is going to crumble down.
Sometimes the suppliers provide low-quality product and take a long time in delivery that seriously affect the business integrity.
Related Article: 40+ Best Dropshipping Suppliers (Niche Based)
The Major Dropshipping Issue in Lockdown 2020
The shipment was the main concern and the biggest challenge for the newbie dropshippers was to select the reliable supplier who were still fully functional in the pandemic.
Aliexpress is one of the primary sources of dropshippers to find reliable suppliers at reasonable rates. Due to the global lockdown, the Aliexpress shipment was massively affected, and in June-July 2020 the average delivery was reached up to 40 days.
Now, it came back down to 11 days that good signs for all dropshippers, which means they can start Aliexpress dropshipping without any hassle.
That leads us to our second major question.
Is Aliexpress Dropshipping Dead?
No, it is not dead, you can still make tons of profits by sourcing the products from Aliexpress. However, multiple supplier options in the market definitely lessen the significance of Aliexpress.
The long delivery time even after ePacket shipment makes a lot of dropshippers to shift towards different Aliexpress alternatives including,
Also, many tier-A countries dropshippers are using local suppliers to source dropshipping products. Check out the list of US-based dropshippers suppliers and Australian-based dropshipping suppliers.
Apart from alternatives, the current trade war between the USA and China also making alot of people about the stability of Aliexpress dropshipping.
So, my response to Aliexpress dropshipping would be nuance. It is still a viable option but only if you can manage to crack a fast delivery option deal with the supplier.
Related Article: Aliexpress Dropshipping Guide 2020
Does Dropshipping Still Work in 2020?
Let’s understand this question with some facts.
- 33% of all online retailers adopted dropshipping as thier fulfillment. That means one-third of the ecommerce industry is running on the dropshipping model.
- Retail suppliers prefer dropshipping model as they get 18.33% more profit when supply to dropshippers.
- Major stores such as Zappos and Wayfair are built on the dropshipping business model.
- Dropshippers can make 50% more profits than traditional stock-keeping retailers.
Keeping these stats in mind I do not think that dropshipping is going to die any time soon.
All in all, I would say dropshipping is pretty much alive, however, there are some expertise, tips, and hacks you’d better learn to make a profitable dropshipping business.
To learn everything about the dropshipping business, do check out these following resources;
What is dropshipping and how does it work?
Shopify Dropshipping Setup Guide
How to Validate a Dropshipping Supplier
Generate First Dropshipping Sale in Just 60 Minutes
If you have any queries regarding the dropshipping business then do mention them in the comments below or join our 5500+ members community.
Great post! 🙂