The dropshipping theme is buzzing.
This revolutionary business model has been going on for several years now; and, in the past few years, a considerable number of people have jumped on the ship.
A large assortment of products can be sold and many businesses with low investment begin, thanks to dropshipping. In addition, the packaging and shipping process does not have to be handled—because it does not exist here in Dropshipping. It costs close to ‘INR 0’ to start because, for every delivery from a manufacturer to a consumer, you act as the middleman. This phenomenon especially filled the minds with those who came up with new business ventures.
Dropshipping is perhaps one of the most profitable means of getting started in the eCommerce industry, although the market competition of other giants in the market may overtake you.
But still, a question arises from many parts of the industry.
Is Dropshipping profitable in 2021?
Read this article to get the best answer for this.
So,
If we look into the statistics representing the journey of the dropshipping industry, it is estimated that the dropshipping business will gain a market value of $557.9 billion before 2025. What else you need to confirm an assured growth in here?
Let's start by figuring out what dropping is for you to know exactly what it is.
What is Dropshipping?
In simple words, it is just a business concept that offers entrepreneurs e-commerce prospects in a better way, that too internationally. It involves running an online shop without any headaches of managing inventory. It helps you to directly sell products to customers from the wholesaler. As a dealer, you just need to have an online store with an array of captivating products even though you need not hold stock instead. On each transaction, you can generate a marginal profit and have no need to spend anything on the storage and packaging of your products.
But, never think it is an easy process. Everyone with WiFi is a potential competitor for you because of the ease of access. Almost all the niches you could think of were filled by expert drop shippers. Also, we saw in the past that around 27 percent of online retailers had dropshipping operations, thanks to the fact that drop shippers could make more than 50% profit from their inventory management.
Why do new start-ups in eCommerce do dropshipping? Of course, there are some greatly discussed advantages.
The key advantages of Dropshipping are;
- Low entrance barrier
- Infinite resources to begin
- Less capital required
- Lesser Monthly Overheads
- No holding stock; no inventory costs
- Automated solutions for business processing and transactions
Dropshipping, on the other hand, is widely rumored to be dead. But is this true?
Is Dropshipping Dead in 2021?
As we all know, The world has become a world community with such cutting-edge technologies in our hands. Therefore, it is a fact that a new conversation or transformation takes place every year on dropshipping. However, dropshipping do not usually die but change their manner of operations.
To be frank, there are ups and downs, as in other industries, but in 2021 dropshipping can still be a viable strategy for business. So dropshipping is now at a stage where it can create great successes ahead. On the Internet, all the statistics indicate that the market is saturated and competitive, yet dropshipping is not dead. In reality, in recent years, the decline in business models has seen a tremendous rise.
However, many people have endless doubts about whether it is profitable today. Let's see.
Is Dropshipping Profitable?
Know that dropshipping will not be sunshine always. It has its own share of the issues as with commercial approaches. As we all know, it has undoubtedly grown too much with small-scale control over it. Although many people fail at this, many still consider drop-shipping as a meaningful action plan to maintain an active business. Since it's a cheaper and more returnable business, you don't have to invest much in a dropshipping because your stock doesn't have to be managed, you don't have to manufacture a product, and usually don't have to hire many employees.
In light of all this, do not know why many still believe that dropshipping is not profitable.
According to today’s market conditions, you must spend a lot of time on the market, on behalf of nurturing branding in your niche. You will be doing marketing a lot of proper promotion activities. So, a dropper today faces many challenges. But, experienced people say that it is very easy to reap the benefits if they can be overcome.
“ As you sow, so you reap.”
So let's see what those challenges are and how to overcome them?
Product Supply challenges
A challenge that new business owners face is getting products from genuine suppliers. It is not rare nowadays that unprincipled vendors may meet you and try to fool you with low-quality products. So, always beware of fraudulent suppliers who demand permanent charges and sell their items aggressively to everybody with the so-called wholesale prices. Start your search and brainstorm with directories of the provider—directories of suppliers list where you can choose according to your business requirements.
Out of stock Issues
Items with high demand may sometimes get out of stock, and there is a chance to receive bad customer reviews and feedbacks. Customer likes a product and finds it unavailable will no be having a happy ending. This can sometimes make a terrible decline in your business value. Although you have no control over the availability of products, customers won't understand this; what they see is only your website.
The most convenient technique of dealing with stock losses is to partner with numerous suppliers with enough products in stock. Another method would be to ensure the consumer is provided a substitute item.
Getting Leads
Finding prospects and getting leads exists as a great challenge in dropshipping as same as other kinds of businesses. Many companies embark on the right track. However, lead generation takes a back place when it comes to marketing and attracting customers. So it is now highly essential to use appropriate techniques to seize and convert your prospects to increase the leads.
Most of your marketing strategies for dropshipping are identical to those that you promote for any internet company. You just have to look at your options and see what works for your company. Your success lies in exploring your options and finding what works for your business.
Bad Customer Experience
Customer satisfaction matters everywhere in the market today. Every consumer opts for or needs a return on money if the product doesn’t offer them satisfaction bv as they expected. The reasons are many. Maybe the consumer could have a different expectation or the supplier could not provide a genuine product. No matter why you should apologize, as a business owner, for the issue that happened and for failing to fulfill the expectations of your consumer.
Managing Customer Complaints
Dealing with customer complaints can retain your customers and protect the business to some extent. As we all know, social media is now a great platform for any customer to directly reach the brands and register their complaints publically. Your reputation is in danger and you don't know how to cope effectively with publicly voiced harsh comments. In addition, potential clients who read your business evaluations will distrust your credibility. So, consumer complaints should be responded to every time.
How Do You Get Your Payments?
When we talk about eCommerce stores, if we continue to add new payment options, there is usually a great chance of drawing more clients over time. Because processing online payments are easier than ever, while companies like PingPong help drop shippers receive their international payments effortlessly, they can now be a bit relaxed than before. These movements make dropshipping easily possible for people from different corners of the world. As we are one of the pioneers in the industry, PingPong can best assist you in processing your international payments online with maximum efficiency and better cost-effectiveness.
Dropshipping vs Affiliate Marketing
You should know this whether or not you are dubious of dropshipping. Affiliate marketing is profitable too since you may succeed very well without a lot. Both can be put on the same level, but in terms of acceptance, the graph of drop shipping is slightly higher than that of affiliate marketing.
Especially, in affiliate marketing, the inconvenience of relying on other businesses is disproportionately borne by the money you can lose. For this reason, it is better to have a dropshipping element even if you continue to promote affiliates. It can help ensure your business has a stable money flow.
Final Words:
Having genuine will always be profitable for you for sure. Dropshipping is still a viable strategy to build a profitable way to gather many successes. And today, as covid 19 dwells everywhere, particularly because most people stay home, it’s the best time for dropshippers to generate more income and profit. When it comes to examining if dropshipping is actually profitable in 2021, market saturation is not truly an issue as long as markets keep changing.