Dropshipping is one of the popular e-commerce business models that made people millions by just sitting in their homes and arbitraging products. The entry barriers of dropshipping are much lower than other business models, many people have the idea of starting dropshipping. However, there is a question that is constantly being asked, no matter which year it is. Is dropshipping dead in 2021, 2020, or 2019…? The answer will always be no. But it will depend on your ability to adapt to the environment.
Is Dropshipping Dead in 2021?
One way to determine if it’s dead or not is by searching its trend on Google.
Search the term “dropshipping” on google trends, the result shows that over the past 5 years, the searching trend of dropshipping went through an upward spiral, showing how popular it has become in the last few years alone.
If check the Google Trends for the US, which is the biggest market for dropshipping, we will notice that more people within the US are searching for dropshipping terms. While it did get a dip in the past two months( It was probably because of the impact of the Christmas season and CNY), it is still going strong, that is to say, it is now on an upward trend, therefore, this is the right time to start a dropshipping business.
And there are hundreds of new users registered on CJ App every day. Over the past year, we had a stable growth per day of new registers.
Dropshipping is not dying, in fact, it is thriving.
Here are some reasons to explain the trends:
- The global economy is growing, and room for e-commerce growth is vast
- The world has embraced e-commerce
- More people are buying online than ever before
- More suppliers understand the concept of dropshipping and are willing to work with it
- The emergence of dropshipping companies makes dropshipping much easier and more efficient
- Consumption potentiality in developing countries is huge to explore
- Development and popularization of online payments like PayPal make online payments much easier
- The upfront cost is much lesser than other models of business
- Rising purchasing power in developing regions
- Automated management solutions
- Value-added services
- Search engines entries
Dropshipping is still profitable in 2021 because of the number of e-commerce activities taking place around the world. It is not only profitable but thriving! E-commerce and dropshipping profits have reached over $4 billion, which is a 7 percent year-on-year increase for the last 10 years.
Moreover, small retailers are seeing an almost 30% increase in conversion rates through smartphones, which is a clear trend for the coming future.
As e-commerce enjoys more popularity than ever, and online payments work universally, more and more customers prefer to do online shopping, and the potential demand is beyond imagination.
The upfront cost is almost 0 because a dropshipper does not need to buy inventory before starting the business, so he doesn’t have to pay money to maintain the warehouse and labor costs. Moreover, the cost of running a store is very cheap, the average monthly fee is only about $30. Then there are only product cost and advertising fee. Compare with traditional business models, the input-output ratio is tremendous.
What Are the Biggest Problems that Dropshippers Face in 2021?
Dropshipping is profitable and thriving in 2021, but there are some problems you should try to avoid or figure solutions to minimize the impact if you want to start with and succeed in dropshipping.
- The quality of the product can differ from what was actually marketed by the merchant
- Shipping delays can reduce the number of online customers visiting your stores
- Your customers may get something else than what they ordered by fulfillment mistake
- More refunds and returns can damage your credibility against payment gateways
- If your suppliers use a trademarked logo on the products, you will be held liable for it
- Difficult to turn your dropshipping store into a brand.
What Are the Solutions to these Dropshipping Problems?
- Build a relationship with suppliers and only work with those who are reliable and provide quality products
- Cooperate with dropshipping company is an easier way to do dropshipping, who is professional in finding reliable suppliers, fulfilling orders, and many other services favor dropshippers
- Research your target market and buy trending products that sell well. This will reduce the money wasted on advertising, and allow you to make more profits
- Try to make your products different from others by making custom products/packaging and logo
- Maintain high standards of online stores, in this way, you will win the trust of customers and convert to more orders
- Treat customers with respect, and offer a good customer experience.
Dropshipping is not dead. It is still a lucrative business model and anyone with the right insights can reap huge profits by using it wisely. Dropshipping is a model of e-commercial business, it usually doesn’t die but changes the way it works. Regret for the past makes no sense, now is the best time for you to do the business.