Is Dropshipping dead? Or at least, that’s what some say about the most recent, digitized development of eCommerce today.
But is that really the case with consumers and store owners alike? What do critics and fans say about the past, present, and future of this generation of eCommerce? And what’s actually going on with the dropshipping store management model right now?
As the first online stores burst on the 90’s retail scene and grew demand for mainstay eCommerce suppliers via Aliexpress and eBay, the popularity of eCommerce stores boomed. Following the rise of social media giant Facebook in the 2000s, social eCommerce began the popularization of Aliexpress and eBay products via personable social entrepreneurs. Even today, eCommerce continues to evolve and develop, and since eCommerce businesses can be built online through platforms like Shopify, it is now easier than ever to start up and run thanks to the plethora of pre-built eCommerce store platforms.
Dropshipping is one of the newest developments in eCommerce, wherein owners manage brands and stores while outsourcing other processes like production and delivery to suppliers and couriers. And the set-up of dropshipping is actually straightforward at each stage, from defining your niche to executing marketing strategies, thanks to Shopify and co. So whether you’re an eCommerce heavyweight like online furniture store Wayfair or a beginner dropshipper harnessing the power of the Tiktok-Made-Me-Buy-It phenomenon, dropshipping is a viable eCommerce store management option for your business.
Recent market analysis shows that the global dropshipping market, valued at US$162 billion in 2021, is likely to only continue growing, reaching an estimated US$621 billion by 2028. This is in the aftermath of the pandemic and amid the staggering recovery process, reflecting how eCommerce is here to stay, and so is dropshipping. As a result, multiple branches of dropshipping have emerged, including automated dropshipping that extends operational outsourcing further, leveraging virtual assistants and freelancers alike.
So, what’s the issue?
Critics of dropshipping cite issues of hyperconsumerism and waste from mass-produced goods in viral, flash-in-the-pan Tiktok marketing strategies and opaque supply chains and unethical private labeling practices, to name a few. In response, increasingly discerning consumers and uncountable competitor dropshippers now pose significant new challenges to the dropshipping store management model.
But isn’t the dropshipping market still growing, with massively successful stores across platforms like Shopify, and thriving demand for Aliexpress and eBay suppliers? How can dropshipping be dying or dead if that’s the case? Who do we believe — the fans or the critics? Is dropshipping still the eCommerce model for you?
To get the answers, let’s look at the boom and not-quite bust of dropshipping and its impact on online store management models across eCommerce.
Is Dropshipping Dead? Dropshipping is a Mainstay of eCommerce
With its multi-billion dollar market and continued growth projections, dropshipping remains an undisputed heavy hitter and industry favorite in eCommerce. On top of enduring and high market performance, dropshipping also remains relevant, with fairly steady growing interest, as shown by Google Trends analysis of the past 5 years.
This is likely driven by success stories and viral ‘hustle culture’ social media influencers, which highlight dropshipping’s key draws of low cost, easy set-up, and minimal product management. Apart from small store owners and entrepreneurs, dropshipping holds interest with export-oriented industry associations looking to leverage the power of eCommerce, including the Brazilian Footwear Industry Association (Abicalçados)’s US Dropshipping Project.
That sounds great, but is the shiny, Tiktok-filtered promise of tastefully styled Shopify stores and easy outsourcing to Aliexpress and eBay truly as good as claimed?
For the most part, yes!
A closer look at Google Trends in dropshipping, for example, reveals that while searches for ‘dropshipping’ have more or less plateaued in the past 12 months (at the time of writing), it does so at a fairly high rate. This indicates that while we can’t expect the same explosive growth in dropshipping and eCommerce, we can expect dropshipping and most of eCommerce, in general, to retain interest from both our consumers and rivals.
Social media marketing and the dropshipping store models that evolved around them universally employ an amplified, digital version of traditional word-of-mouth recommendations and advertising, which reliably establishes consumer trust and interest.
Additionally, just as eCommerce revolutionized itself in order to seize the opportunities presented by the rise of social media, dropshipping variations have developed to find new niches amid market saturation, such as those for specialty, high-ticket items.
As such, various new branches of the classic dropshipping store are constantly emerging, and often make significant changes to the store management model we know and love. The core features of dropshipping, however, remain the same: a streamlined, online-based operational store model on platforms like Shopify and flexible business strategies.
Just as these hallmark store features are a draw for established and greenhorn sellers, several key traits of well-built and well-run dropshipping stores are major selling points for customers. Dropshipping stores that are consistent crowd favorites are often customer-first with their service, proactive with their marketing outreach, and always on the lookout for quality new offerings.
Winning dropshippers ensure their stores are more than just quick cash grabs: they’re a happy marriage of simplified store management, varied consumer choice, and online convenience for all. This approach maximizes the advantages of dropshipping for longer periods of time, enabling dropshipping entrepreneurs to build stores that weather the ups and downs of eCommerce, growing steadily rather than dying off.
Dropshipping’s doomsayers may be right about the problems that come with dropshipping’s unique store management model; it’s clear that store owners willing to put in the work for their store will likely still find opportunities to thrive.
Dropshipping isn’t dead or dying, but mindless, cookie-cutter stores and their careless management sure are.
The Bust? Too Many Competitors, Ghost Sellers, and Discerning Consumers
So what are the main issues people have with dropshipping today? Are these problems with dropshipping or with misuse of the dropshipping store model? How did this happen, given that dropshipping stores use established platforms like Shopify and can easily source from marketplaces like Aliexpress and eBay? And is this all enough to make the call that dropshipping is dead in 2022, or at least dying?
Off the bat, research on the dropshipping market shows that the immense growth experienced by dropshipping in recent years is likely moderated by the pandemic, but not stopped or reversed. Similarly, public interest in dropshipping, according to Google Trends, has steadily increased over the years, most recently reaching a consistent presence. So the market and general interest in dropshipping are definitely not dead or dying, at least any time soon.
But not being dead or dying doesn’t mean the dropshipping market is perfect.
Key problems with dropshipping ultimately hit dropshipping entrepreneurs and their stores where it hurts: consumer confidence and consequently their orders. While the problems with dropshipping are numerous, we’ve identified three main issues that have the most impact on the perceptions of the dropshipping business, and thus, affect the store business itself.
Firstly, analysis of the mainstream categories of the dropshipping market, like Toys, Hobby and DIY has reached saturation. That is to say, these have seen a significant and ongoing influx of new dropshipping stores, complete with different Shopify interfaces and usually the same Aliexpress or eBay suppliers. This divides the same number of consumers across more stores, which may have customized their Shopify template to taste, but not their Aliexpress and eBay inventory.
This unfortunately is a result of a common misunderstanding of the dropshipping model, as an easy, ‘hustle culture’ cash grab rather than the simplified, low-cost way to get your online store up and running, and put your products out there effectively.
While useful, a Shopify store interface and steady supplies of trendy products from Aliexpress and eBay aren’t the be-all-end-all of dropshipping. And novice or careless dropshipping stores that do not realize this end up flooding popular dropshipping market categories with little to no quality control over any of their processes.
Similarly, this has led to the rise of ‘ghost’ sellers and stores: dropshipping stores leaning on savvy social media marketing in order to ride the waves of the latest fads. ‘Ghost’ stores are often set up hastily with expectations of a quick and easy payday without owners needing to invest care into their store and overall business model. As a result, the ever-watchful, eagle-eyed Internet often catches on fairly quickly, and successfully traces the dropshipping supply chain, and finds a $20 hoodie on Aliexpress and eBay from its $70 listing on Facebook Marketplace.
Such careless and questionable misuses of the dropshipping store model, and its immense potential among various forms of eCommerce, tend to shake belief and trust in dropshipping and eCommerce as a whole. This loss of trust is directed to all online stores which adopt dropshipping, even towards principled brands simply expanding operations efficiently with dropshipping, without compromising quality control or ethics.
Consumer skepticism and scrutiny have naturally grown significantly, with online sleuths regularly analyzing Instagram fashion brands and often finding ‘ghost’ dropshipping stores. These are commonly identified as different stores that still all carry the same product sourced from Aliexpress and eBay, complete with copied-and-pasted, unedited, uncurated supplier images.
With the advent of market saturation, ghost stores, and loss of consumer confidence, it’s no surprise that some fear that dropshipping is dying, if not already dead. But while these problems have a significant impact on perceptions of dropshipping by both store owners and customers, they are by no means the death of dropshipping as a whole.
Live dropshipping stores that continue to thrive are those set up with careful and consistent efforts from Shopify store interfaces to product sourcing and fulfillment by Aliexpress, eBay, or specialty suppliers.
Dropshipping Today: Yay or Nay?
So we’ve got our answer: dropshipping as a whole isn’t dead, or even dying. What’s dead and dying is the early stages of dropshipping when it was viable to almost entirely copy-and-paste the store catalogs of Aliexpress and eBay and simply resell on a tweaked Shopify storefront.
And it’s plain to see why and how dropshipping and eCommerce, in general, continue to experience high volume influxes of brands and stores: it’s just that easy.
Platforms like Shopify offer a range of customizations, especially through the many winning app solutions available on the Shopify App Store, and that’s great for any and all looking to sell through Shopify, from established brands like Vogue to younger up-and-comers like Ruggable. This means that even the most green of dropshipping entrepreneurs can, with effort and the right mindset to their dropshipping Shopify store, rival the Shopify fronts of large household name brands.
Similarly, the bad name ghost dropshipping gives to marketplaces like Aliexpress and eBay doesn’t mean serious dropshipping must do without the convenience and variety they offer. Not all Aliexpress and eBay suppliers are cut from the same cloth, so to speak. And with clear product strategies and close communication, dropshipping entrepreneurs can outsource the heavy lifting without compromising product and service quality.
With these, the challenges of dropshipping in 2022 can be overcome to secure and maintain the confidence of customers, the convenience of platforms like Shopify, and supply marketplaces like Aliexpress and eBay.
This is because, at its core, dropshipping is the epitome of everything we love about eCommerce! A variety of good deals are sourced internationally and produced, ordered, and delivered with a few clicks of a button. So while we acknowledge the pitfalls of dropshipping gone wrong, we retain confidence in the potential and power of dropshipping done right.
As such, dropshipping today still holds much of its potential as a newly developed form of eCommerce, that boasts of both ease of use by dropshippers and their customers, thanks to the genius of platforms and markets like Shopify, Aliexpress, and eBay.
These features are perhaps best tapped into by dropshipping entrepreneurs looking to run a dropshipping start-up or side hustle. Dropshipping and its many different variations all offer low overhead costs by replacing traditional rents with Shopify plans or factory Minimum Order Quantities (MOQs) with flexible Aliexpress or eBay supplies.
TLDR; Dropshipping today is very much not dead, or dying. Rather, flourishing dropshipping businesses are now conditional, requiring proactive, committed dropshipping entrepreneurs as well as ethical and responsible store management.
Dropshipping Is Dead? Where Do We Go From Here?
The growth and potential of dropshipping thus far have been impressive and exciting for the dropshipping market and eCommerce as a whole, and so is dropshipping’s future.
As mentioned earlier, an up-and-coming variation on eCommerce’s favorite store management model is that of high-ticket dropshipping.
High-ticket dropshipping is very much a perfect example of how dropshipping can help boost operational efficiency without risking quality or compromising on store owners’ time and effort. The high-ticket dropshipping store management model requires the careful and conscientious set-up of a store and suppliers, from reliable store platforms like Shopify. It also requires the careful discovery and development of market niches, and rigorous, omnichannel marketing strategies much like the rest of eCommerce has employed.
Similarly, another popular and promising avenue for dropshipping businesses is to convert their currently successful dropshipping store operations into a D2C brand. As noted earlier, eCommerce platforms like Shopify are already home to both established stores and new brands. This would allow ambitious dropshipping entrepreneurs to pivot and convert operations easily, a business decision that dropshipping veterans and eCommerce content creators like Jordan Welch have done and demonstrated.
So whether you’re looking to use dropshipping to get your brand off the ground, or carve out a side hustle you can eventually take full-time, dropshipping in 2022 remains a great option!
All you really need to do is to be willing to put in the work needed to carefully start your dropshipping business and properly run the day-to-day of your dropshipping store that can’t be further outsourced.
Dropshipping is very much like the rest of eCommerce businesses, in that honest, straightforward, and yet profitable stores can succeed in the long term. This is done by building up consumer and supplier relations that are responsible and conducive. This also means that the toughest phase for a beginner dropshipping store tends to be the initial phase of gathering information to inform various business strategies.
Let’s give your store the upfront boost it needs to grow quickly yet sustainably, into a lasting, adaptable brand!
Enter the Koala Apps’ very own Koala Inspector!
The Koala Inspector is the innovative new solution to all your dropshipping and eCommerce business information needs. Our app is free to install and use, designed for simple use and navigation, and produces results instantly, making it the app of choice for tracking and finding key business strategies of top-performing Shopify stores.
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