Is Drop Shipping still profitable? How to create a Brandable store that can scale like a whale!

Businesses model uncertainty is a debilitating fear for digital entrepreneurs. Our understanding of the short-lived nature of digital business models has been sharpened by the fast pace at which technology changes.

What is the reason?

Despite the fact that technology often benefits users and contributes to the development of new ways of conducting businesses, the opposite is also true: as rapidly as it brings in new methods, it obliterates old ones. When SEO (Search Engine Optimization) was fairly easy 10 years ago, it is not as easy anymore. Due to the hundreds of updates released by Google over the past few years, the methods of ranking websites have completely changed.

The same is true of cost per click (CPC) methods, including Google AdSense, Chitika, and BidVertiser, etc. These methods have now been replaced by native advertising and content discovery platforms.

By the time you decide to adopt a business model, most will be outdated.

When it comes to dropshipping, we need to identify viable dropshipping platforms, look for stores that still benefit from dropshipping, and find marketing platforms which facilitate dropshipping.

Dropshipping is still alive, isn’t it? Evidence from Google

Dropshipping on AliExpress is often questioned. By searching for it on Google, you can determine if it’s alive or dead.

The graph shows that the market is still thriving, despite last year’s dip. Moreover, if you look at the trending searches for dropshipping inside the US, you’ll find a greater number of people looking for terms related to drop shipping there. We were taken by surprise by this.

It highlights data over the past five years showing its impressive growth in recent years. In addition, this presents another notion that dropshipping predates AliExpress. Five years ago, AliExpress was popular or not.

The situation is entirely different. Its popularity in the US was higher a few years ago. Currently, it’s declining.

Is dropshipping dead in 2021?

No, in a nutshell. Many statistics indicate that the dropshipping industry is saturated, but it still has plenty of potential and it’s not at the end of the road. According to industry predictions, dropshipping will have a market value of $557.9 billion by 2025.

There’s more:

  • dropshipping is used by approximately 27% of online retailers
  • dropshipping can yield approximately 50% more profit than keeping your own inventory

Dropshipping is being discussed more and more every year. As a result, dropshippers rarely die, but they change their business model instead. Dropshipping was king on AliExpress a few years ago. This has changed in recent years as dropshippers now engage directly with wholesalers for their products.

In similar fashion, buyers and clients are complaining in various forums that dropshipping isn’t dead.

Here is an example:

The viability of dropshipping is very much in doubt among many people. Check out this Quora expert analysis for a better understanding of dropshipping.

Dropshipping is still a popular business model in 2021, as you can see! Dropshipping is a good business to start now. It’s because:

  • Ecommerce is booming
    People are buying more online than ever
  • Dropshippers are gaining popularity and merchants are willing to work with them
  • Makes it easy to send online payments
  • Online marketing campaigns are easy to develop
  • Because of the low upfront costs

Dropshipping Business: 6 Steps to Success

1. Identify your niche.

You need to select a niche that is laser-focused and genuinely interesting to you. Having a wide product range without a focus makes marketing hard. You will be more likely to become discouraged if you are not passionate about the niche you choose, because it takes time and effort to scale a dropshipping business.

Identify your niche with these steps:

  • Ensure that you are able to make a profit
  • Low shipping costs are very important
  • Make sure you target impulse buyers with disposable income.
  • Your product must be actively sought out by people.
  • Brand yourself and sell
  • Sell a product that is hard to find in your area.

2. Conducted a competitive analysis.

Besides other dropshipping businesses, you will also be competing with giants like Walmart and Amazon. Drop shippers often make this mistake, since they look for a product with little competition. There is no demand for that product, which is a sign there is none.

The lack of competition may have many reasons, including high shipping costs, supplier and manufacturing issues, or thin profit margins. It’s a good sign if your product is highly competitive and has a sustainable business model if there is high demand.

3. Ensure your supplier is reliable.

You should take your time when choosing a supplier, as choosing the wrong one can ruin your business. Due diligence should be conducted. Communication within drop shipping suppliers is of paramount importance, and this requires both quick response times and an understanding of each other’s languages. A potential supplier whose communication abilities are not 100 percent strong should be moved on and your search should continue.

Identifying and contacting manufacturers and suppliers has become easier with Alibaba’s online system. In the event that your business grows exponentially, be sure to ask a lot of questions and learn about their production capabilities. If you want them to scale with you, you should make sure they have the means to do so.

Try to learn from other entrepreneurs who have walked this path in the past. There are plenty of information sources available, from business and tech blogs to this subreddit about drop shipping. It’s a popular topic that can help you avoid costly supplier mistakes.

4. Create your ecommerce website.

Drop shipping websites can be launched quickly using an ecommerce platform such as Shopify. The system is simple to use, and many apps are available that can increase sales.

It’s a much wiser move to use a plug-and-play solution, particularly in the beginning, even if you have a large budget to hire a web design and development company to create a custom solution. After your website is established and your revenues begin to flow, you can explore more customization options.

5. Plan how to acquire customers.

Your website and great product are great, but no business can survive without customers. Several methods are available to attract potential customers, but starting a Facebook campaign is the most effective.

As a result, you can generate sales and revenue right from the beginning, which is helpful for quick scaling. With Facebook, you have the opportunity to reach highly targeted audiences with your offer. As a result, you can compete instantly with the biggest brands and retailers.

A big part of your marketing strategy should be search engine optimization and email marketing, as well as immediate results. Build an automated email sequence that offers discounts and special deals from the start. This is an easy way to generate additional revenue without spending additional funds on advertising.

6. Optimize and analyze.

To grow your business, you must track all data and metrics. If you primarily acquire customers via Google Analytics and Facebook conversion pixels, you need to incorporate this into your data collection. You can scale what works and eliminate what doesn’t work when you can track every conversion — from where the customer came to your site to what path they took on your site that led them to a sale.

It is impossible to have a marketing or advertising solution that can be set and forgot. You should constantly test new opportunities and refine existing campaigns, so that you can efficiently optimize or shift campaign spending.

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