Is dropshipping dead in 2021?

Is dropshipping dead in 2021?

By Manuel Becvar
By Manuel Becvar

Table of Contents

Introduction

First off I think I should let you know that I have never done dropshipping. For some reason it never seemed appealing to me. 

Low quality products from China that I can’t inspect, long delivery and possible upset customers that can kill my dropshipping business days after I started. However dropshipping can be great when you are just getting started and have a low budget. 

Having said that, there are ways to make money with dropshipping. So is dropshipping dead in 2021? No, it is very much alive and in this post I want to share some ways on how to succeed in dropshipping. So lets get into it. 

Disclaimer: Some of the products may contain an affiliate link and we may make a commission if you click on it at no additional costs to you.

What is dropshipping?

Simply put, dropshipping is selling other brands products on your own website or store. A customer comes to your website and buys a product that you sourced from somewhere and put on your website. In most cases this will be Aliexpress or perhaps Oberloo.

The product you are promoting and selling on your site is then shipped to the customer from the original supplier. In many case you will have to place the order at the supplier yourself or if you are using an integration/automation the supplier gets the order electronically and ships it to the customer. 

Sounds great actually, no? Well, this may have worked 10 years ago and many people did very well with dropshipping. Especially in the pre-Amazon FBA and Shopify times. Customers weren’t used to 1 day or free shipping. There wasn’t much competition online for a new product. So customers were also willing to wait 7-10 days for shipment. 

The problem is and always has been for me that I can’t control the quality of the product. Sure, I could get a sample first and check it. But I never know what the supplier will send out to the customers. He could have just sent me a “golden” sample. This kind of trust is silly to me. I need full control over quality. What’s more, these dropshipping suppliers have stock, meaning they’ve produced the item I want already and its laying around somewhere in their warehouse. 

It could be in a Chinese packaging or from some other customer that I don’t know. Imagine you’re getting a product that you bought online and the entire packaging and instruction manual is in Chinese. 

And as I’ve mentioned already I am not sure if I want to wait 7 days for something not knowing what I’ll get. Me personally, if I buy online I buy directly at the brand (e.g. Adidas or Amazon). And these guys ship in 1-4 days and I know I can return the item if I want. 

Thats another thing with dropshipping. You basically have to offer free return (perhaps shipping is paid by the customer) and I can’t get the money back from the supplier. Completely different to Amazon FBA. If the item gets returned I get the money back from Amazon. 

If the money gets returned and the customer claims its broken I will claim it back from my supplier in terms of a refund of free unit on the next order. E.g. if I sell 1000 units of a product and 60 are returned from the customer claiming they are faulty I will ask the supplier to give me 60 units for free on the next order. As support I will email him the Amazon return screenshots from customers. I mentioned this clause every time before I place an order, be sure to do the same on your next order.

Succesful dropshipping business models

I initially said dropshipping is not dead. So who are those people that make money with it? For me there are only 3 ways to have a successful dropshipping business:

  1. High price items with a local dropshipping company

  2. One hit wonder products

  3. Clear communication to customers on delivery times

High price items with a local dropshipping company

Probably the best way to go is to find a local company with higher priced items (like outdoor furniture).

First off you don’t need to make many sales to make this profitable as compared to an item that makes you 1$ per sale. If you sell 50 items with 1$ profit per sale you probably only need to sell 1 set of garden furniture to make 50$ in profits. And it is probably easier to sell 1 set of outdoor furniture every other day than selling 50 fidget spinners. 

Second, if you deal with a local company, shipping times will be much faster, quality is likely to be better and their customer service is probably better orientated to get you back fro repeat business. You could possible even visit the company, meet people in person, see the samples, negotiate deals etc. 

Johnny from JohnnyFD talks about this extensively. I dont know Johnny personally but I’ve seen his content and he talks about this extensively and explains in details how you can build a dropshipping business with local suppliers and high priced items. He’s been rather successful with his dropshipping business for many years. 

One-hit-wonder products

Just like that 1 song from that band you never heard of again. This is a very short lived success but may very well pay off. I am talking about products that only you sell and hopefully you’ll be the only one for a while that are a true hit. Things like a fidget spinner. If you were among the first ones you probably made very good money. When the competition came in – like 30 days later the product was dead. 

Granted, this could work well but you are not really establishing a brand or doing anything meaningful. You would always be on the lookout for that next hit and thats very stressful. And we all know how well that goes with musicians for example. 
 
I prefer building a brand and having a fanbase of customers who will buy from me again and again. 

Clear communication to customers on delivery times & customer support

If you do find a low/medium priced product and a quality supplier (which is entirely possible) then I would want to make sure to communicate to my customers that it takes a certain time to deliver. 

I asked Nichedropshipping the other day what their outlook on dropshipping is. Here’s what they prepared for me that I wanted to share with you: 

Dropshipping is simply a way of running an ecommerce business without having to handle the products personally. It’s a simple approach to selling online, especially for startups on a tight budget. But, despite the ease of entry, success doesn’t come easily.

When it comes to succeeding in dropshipping, we’re not talking about getting rich quickly; instead, we are talking about building a legitimate, sustainable, real business. 

To be successful, it takes more than a research-backed niche, a user-friendly store, good suppliers, and effective marketing campaigns. The core of success is to care about your customers.

As a dropshipping agent, we have witnessed quite a few times that our clients had to shut down their stores due to poor customer feedback. However, you don’t have to suffer the same failures if you keep the following in mind.

  • Sell products that add value to customers and never compromise on quality. 

  • Instead of exaggerating the benefits of your product or promising over-optimistic shipping time, stay honest and set clear expectations for your services. 

  • Provide exceptional customer services. Answer customer queries timely and remain proactive in providing solutions if unforeseen issues arise such as inventory shortages or shipping delays.

We can see that dropshipping is not dead but growing. However, you’ll only see growth in your dropshipping business if you constantly strive to refine your strategies and remain client-centric.

If you are interested in dropshipping and need to look for quality suppliers and products I suggest you visit Nichedropshipping.

Where can I find dropshipping suppliers?

Having said all that, while dropshipping is not for me, it can work for many people. So here are some resources to find suppliers:

  1. Nichedropshipping.com

  2. Aliexpress.com

  3. Goten.com

  4. Inventorysource.com

  5. Oberlo.com

There are others of course, but these are the ones I know well and recommend.

Final Thoughts

So should you give dropshipping a try? Why not. The initial investment capital & the risks are low. you could try several product categories until you find your niche. And if you do make some money why not take the profits and start your own private label to sell on Amazon or go into higher production quantities with a unique product 🙂

I hope above helps!

All the best,

Manuel 

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