Is Dropshipping Dead in 2020? Dropshipping and Third Party Sellers Future
Ecommerce has become a trillion-dollar industry and growing at a staggering pace, providing an earning opportunity to thousands of aspiring entrepreneurs.
Entering in the ecommerce industry has become more feasible, especially after the rise of third-party sellers and dropshipping.
However, people are having doubts about over dropshipping business stability in 2020 and rising questions such as; is dropshipping dead or would it become outdated in 2020?
Here is my answer – No, dropshipping will not die and it will be a profitable business in 2020. However, it would definitely become more and more competitive as many people consider it easy an access to ecommerce industry.
Nonetheless, there are some concerns for third-party sellers and Amazon dropshippers that I would like to highlight here.
Third-Party Seller and Amazon Dropshippers
First, look at some numbers of third-party sellers and dropshipping on Amazon.
Third-party sellers and dropshippers are responsible for more than 50% revenues of Amazon. Following the success of sellers, more than a million new sellers have registered on Amazon in 2019 and allegedly majority of them are third-party sellers.
The reason for this huge number of sellers is because it one of the easiest gateways to penetrate into ecommerce industry. The sellers only need to ship the products on Amazon fulfillment centers and display the products online on their store. When customer places an order Amazon take care of everything from packaging and shipping to customer support services.
But, the rising numbers of these sellers have raised some concern for brands and they are not very pleased with it.
Brands Concern About Amazon Sellers
In November 2019, Nike decided to stop selling its products on Amazon. The shoe conglomerate is seriously concerned over third party Amazon sellers damaging its brand image by selling fake items on world’s largest ecommerce marketplace.
This news educated a lot of customers who were not aware of third-party sellers, that is not cheerful news for sellers.
Brands have also raised their concerns on Amazon third-party sellers in US congress antitrust inquiry, accusing Amazon of using the brands’ data to facilitates third-party sellers that led the brands to face tough pricing competition against Amazon sellers.
Another shoe brand Allbird claims that fake shoes are being sold on Amazon sellers under their brand’s name.
The Major Problems
The issues of brand questioning the integrity of Amazon policies for third party sellers are rising some major issues.
First, the customers are getting too much information about dropshippers and third-party sellers. It is hard for a common buyer to identify a third-party seller or bother to search for the real brand as they just go with the name Amazon.
However, after this news, the buyer would get cautious and dig a little before purchasing anything on Amazon and this will definitely affect the sales of third party sellers.
After Nike and Allbirds concerns, there is a possibility that more brands might withdraw their products from Amazon and third-party sellers of those brands would surely be affected.
The Future of Amazon Dropshippers & Third-Party Sellers in 2020
The third-party sellers and dropshippers on Amazon must question whether this business model is sustainable or not.
Well, Amazon might change some policies in 2020 following the pressure of brand’s withdrawing from its platform, but third-party selling is the major revenue for Amazon which will not vanish from this platform, for sure.
However, the question here is that – is it a sustainable business model?
In my opinion, no it is not. You never know when the policies are going to get against you. If you are willing to earn some good money in short time, then it is one of the best options. However, to make a sustainable online business this is not a good option.
So, how can you build a sustainable online business if you are using dropshipping model?
Best Options to Make a Sustainable Dropshipping Business in 2020
To make a sustainable dropshipping business, there are two best options you have to start a dropshipping or Amazon FBA business.
- Private Label products
This is a kind of dropshipping business in which you sell products under your own brand name. You only need to find a reliable manufacturer to make top quality products and put your brand name on them.
Once your product is manufactured, you can sell them on your dropshipping store or by Amazon FBA.
Lately, private label has been showing quite positive signs of growth. In 2018, the market share of private label rose up to 19.3% in US from 15.5% in 2013.
Private label is rising rapidly in ecommerce sector. Just check out the chart comparing the growth in dollar share on some best private label products.
The trends are showing an amazing sign for the growth of private label business. It is also indicating that there are bright chances of success in the private label if you penetrate in the household or baby care niche.
- Print on Demand
Print on demand is undoubtedly, the easiest and profitable online business model. All you need to be creative with your design within your niche and have the product in mind to print your design.
Just keep yourself updated with the trends and you could earn thousands of dollars in a matter of days. No kidding!
In November, an 18-year-old US student cashed-in “OK Boomer” trend and made $25k by selling over 2000 t-shirts via print on demand.
Keep an eye on trends.
The print on demand is expected to become a $10 billion market by 2025.
So, you have a golden opportunity to build a POD empire in 2020 by just following the right trends.
The future of dropshipping is one of the major of aspiring ecommerce entrepreneur and many believe that dropshipping is dead after hearing the failing stories of amateur sellers.
Many newbies come into this business to earn more money with less effort and back-off after minor setbacks and claim dropshipping is outdated.
First thing here to understand is that dropshipping takes time and effort. Yes, it is easy to access but takes an effort in research and marketing. You need to follow the best practices of finding a profitable niche, advertising, and retargeting to become a successful dropshipper.
Dropshipping is a serious business that could help you to earn hundreds and thousands of dollars, in some cases, even millions of dollars but it takes patience and focus to do so.