Is dropshipping dead in 2021? It could well be but the chances of dropshipping dying out completely is almost zero. Online dropshipping has been around since the mid 1990’s and since then people have been speculating and predicting its dead ear in and year out.
If you are thinking about starting dropshipping in 2020, rest assured that you are not entering a dead business model.
However, you are entering a very fast moving and evolving business model. The fact that the barrier to entry is low bring a lot of newbies and competition (many crash and burn) which means you have to be one step ahead at all times.
If you are doing in 2021 what you did in 2019 then you will most likely not survive.
So, is dropshipping dead in 2021? Only if you do it wrong!
There are 5 things that will make you fail in dropshipping in 2020.
Long shipping times no longer acceptable
Dropshipping products from Aliexpress was pretty much the norm during the dropsipping boom. With ePacket shipping you can get parcels to your customers in about 15-20 days.
What most dropshippers do not understand is that Aliexpress sellers are actually also dropshipping. Very few of them stock the products they sell.
This means that it can take 3-5 days for them to get your product sent out to your customer. It will then take another 2-3 days for you to be able to give your customer a tracking number. It can then take another 2 days for these tracking details to populate and show up in a parcel tracker.
In a world where most people are getting used to Amazon’s super fast shipping, this is no longer acceptable. Customers are impatient and no matter how many disclaimers you have on your store, slow shipping times will hurt you.
It will hurt you with refunds/returns
It will hurt you with repeat customers
High refund rates can cause a lot of issues with Paypal and in many cases they will hold large percentages of your money for months.
Repeat customers is the lifeline of any online store in 2020 and beyond. With rising ad costs, it is no longer viable to only make money at the front end.
Poor quality products no longer tolerated
In the heyday of dropshipping, poor quality products was tolerated simply because they were either very unique (not available in stores) or very cheap to buy.
In 2020 and beyond, the standard is much higher. Poor quality products are no longer tolerated. With rising ad costs, dropshippers have to price their products higher. The result is that customers pay more – and they demand more.
With social media, people talk and a poor quality product will quickly get called out on social media. You can try and manage this to some extent but ultimately a poor quality product won’t work long term.
You need to order the products you intend to sell and do your own quality checks. Alternatively you can use an agent to do this for you. It seems like a costly and time consuming task but in the long run it will be worth it.
Facebook Ads stepping in
Facebook ads is still the preferred ad platform for selling drop shipping products. In many ways, it is the perfect platform for impulse buyers. In the last year, Facebook started cracking down big time on dropshippers that don’t offer a great service to their customers.
Facebook introduced a quality score (customer feedback score) for ad accounts to help them pinpoint advertisers that either don’t ship in a timely fashion, don’t offer good customer support or don’t offer quality products.
Facebook has also been on a rampage in shutting down ad accounts for many dropshippers. If you are selling in any health niche and your products make bold claims then you could be in trouble.
If you are copying other dropshippers’ ads then you will also get your ads throttled or even shut down.
There is no more hiding for advertising poor products on Facebook. If you are lazy then dropshipping will be dead for you in 2020.
Same/similar products spamming people
This follows on from the previous point and both Google (and more particularly Google Shopping Ads) are good at identifying the products that are being advertised.
Ultimately they want to offer their users a great user experience. If their users are getting spammed with multiple ads for the same products then they will quickly identify it and put a stop to it.
To succeed with dropshipping in 2020 you need to focus on quality products AND unique and high quality ads (videos and images). Building a brand and setting yourself apart from the competition is crucial.
Spammy Shopify Stores
During the dropshipping boom, Shopify stores looked very spammy. There were many apps that was designed to boost conversion rates by doing all sorts of chenanegance. From fake scarcity to countdown times and sales pop-ups.
They really worked.
Over time they were abused and started being less effective. Many newbie dropshippers still use them but the problem is that their stores look spammy.
A clean, well designed and professional looking Shopify store is the way to go with dropshipping in 2020.
Less is more.
Remove everything that does not have a definite purpose on your store. It is easy for Facebook or Google to detect these spammy apps on your site – and they can penalize you for it.
Aliexpress & Wish.com
Five years ago nobody knew of Aliexpress except for dropshippers. Times have changed and the general public is now much more aware of Aliexpress.
Trying to sell an Aliexpress product for 3x the cost to someone who is aware of Aliexpress is near impossible.
Marketplaces like Wish.com has also become hugely popular. You can find almost all the Aliexpress products on there for nearly the same prices as Aliexpress.
Trying to sell products that are freely available on Wish.com will be near impossible simply because everyone knows it and have probably seen it.
It is important to always be looking for new and exciting dropshipping products as Wish tends to be slow at adapting and it will greatly improve your chances at being successful with dropshipping in 2020 if you sell products that can not be found on these sites.
If you think that dropshipping is dead in 2020, then think again. It may be sick but its not dead. You will need to adapt and change if you want to be successful with dropshipping in 2020 and beyond.
You need to focus your efforts at being unique and setting yourself apart from the pack. There are a number of ways to do this.
Sourcing unique dropshipping products outside of Aliexpress will become the new norm in 2020. There are a lot of sourcing agents that can be great to work with but the barrier to entry is much higher.
The vast majority requires a minimum of 50 orders per day.
Using your own product photos and shooting your own videos is also a huge benefit. You really can make your store and your brand stand out and be unique without spending much.
Offering fast shipping however is the biggest thing. Sourcing products locally or using a fulfillment center can make all the difference in the world.
Don’t be lazy! Don’t be afraid to try something different.
Long live dropshipping.