“Dropshipping is dead?” “Dropshipping is profitable!” “It is hard to make money through drop shipping.” You may have heard or read extreme views about this important topic.
You should look for US dropshipping suppliers if your experience has not been good with dropship suppliers from other countries. There are, still, organizations that provide quality service.
Is dropshipping still profitable in 2020? Should I keep running my drop shipping business? What are profitability projections for the year 2021 for dropshipping business models?
This article explains why dropshipping is still a valuable business model. Continue reading if you want to establish a dropshipping business or if you already running a dropshipping business.
Dropshipping Market Trends for 2020
Some people think that the drop shipping trend belongs to the information age but it is not. The history of drop shipping dates back to as far back as the 1960s when mail-order companies were taking advantage of mail-order catalogs. This concept indeed becomes popularized due to the rise of the internet.
A famous website cloudways.com writers that; “One of the biggest e-commerce business models that made people millions by just sitting in their homes and arbitraging products can’t die so soon… Is it the case? Let’s find out, is dropshipping still profitable!”
Some people are worried about the reduction in this particular type of business growth. There has been a slow period but and good days will come again. It would not be wrong if we say that dropshipping is still going strong in 2020. The truth is; 2020 is still a good year to run a dropshipping business:
- Zero to Little Investment: The upfront cost is almost zero
- Online Payment Transfer: Sending online payments is easy
- E-Commerce Revolution: The world has embraced e-commerce.
- Growing Internet Commerce: More and more people are buying online.
- Paid Marketing Campaigns: It can help with online paid marketing campaigns
- Merchants Trust Drop Shipping: Merchants understand the concept of dropshipping and are willing to work with them
The Profitability of the Dropshipping Model in 2020
Profitability has always been a point of discussion for this kind of business. historically, profits have been high to drop ship-based businesses. Order fulfillment is the main operation that online business has to perform. The rest is taken care of by the online store.
If this order fulfillment process gets outsourced, not much is left for the online store. US dropshipping suppliers have been better than the suppliers from various other companies. That is why people often prefer US-based suppliers. The following factors are disrupting dropshipping businesses’ growth:
- The high cost of goods
- High shipping duration
- Lack of customer support
- Refunds take a lot of time
- Product quality is too low
- Unprofessionalism of sellers
The dropship business model is similar to the retail business model. It is because of the reason that they don’t sell in huge quantities. Therefore, they tend to focus on selling items through these retail e-commerce stores. Here are the top drop shipping service providers from the US:
- Doba
- DHGate
- Salehoo
- Gearbest
- AliExpress
- Lightinthebox
If any of these companies are not suitable for you, do not feel bad and just look for a better option. There are countless options in this space and you will find a partner that suits you fully.
Delays in shipping have been considered as the main drawback of dropshipping. Shipping delays can reduce the number of online customers visiting an online store.
Last Word About Profitability of Dropshipping in 2020
You have read how good the dropshipping business model can be for the coming years. Dropshipping is a new concept and some trends are changing it rapidly. If you want to thrive in this space, you should adopt to those changing trends.
In the end, we can say that drop shipping can be successful if done the right way. The rules that govern this kind of business may vary from one product type to another. If you want to share useful points about this topic, please do not hesitate to share it with me.
So learn the rules of the game first before you start a business. What did you learn after reading this post? You will do much better if you know everything about the space you are about to enter. I wish you all the best with your dropshipping goals.