Is Dropshipping Dead in 2024?
By Sonaksh Singh Rawat on
Dropshipping has its place among the most successful business models to start and run an online business. It allows individuals to earn from the comfort of their homes, it makes running an online business much easier, and is a great business model to increase revenue.
But is dropshipping on its way out?
The answer is no, dropshipping is not on its way out! Regardless of what people say, dropshipping is an extensively used business and is extremely successful, especially when there is thorough planning and execution involved.
It goes without saying, online businesses have a huge responsibility on their shoulders, from keeping up with ever-changing business trends to staying sustainable in this fast-paced environment. Apart from running a sustainable business, they also have to constantly work towards increasing their revenue!
In the same way, CPC or cost per click which includes the use of online tools like Chitika, BidVertiser, as well as Google AdSense is on its way out and their places have been taken over by different types of content discovery/delivery platforms and native advertising.
This means, without thoughtful strategizing and proper planning, any business model becomes outdated. So let's take a look at a few things you need to keep an eye on if you want your dropshipping business to be successful in 2024.
Google Trends and Dropshipping - Is Dropshipping Dead or Alive?
Using Google Trends is a great way to get a good understanding of how Dropshipping works in favor of people's interests. In fact, the word “Dropshipping” has seen a steep boost in Google searches.
With AliExpress being one of the most prominent dropshipping platforms, it naturally leads to people asking words such as “Is AliExpress dropshipping dead?” and the answer is no. On the contrary, the term “AliExpress dropshipping” has seen quite a surge in the last 5 years! This is because of the fact that it is a great platform for dropshipping, because it is reasonably priced, and individuals can find a multitude of product choices.
On the other hand, the trend/search for the term “Alibaba” doesn't seem to be up there. Among the many reasons, the one that stands out is the fact that Alibaba caters only to businesses (B2B) whereas AliExpress also caters to individuals as direct customers. Furthermore, AliExpress also offers more payment options as compared to Alibaba.
A similar question is “Is Amazon Dropshipping profitable?”
Shapon, without a doubt, is a stellar Dropshipping platform but when you compare the growth of the term “Amazon Dropshipping” with that of “ AliExpress dropshipping”, it experiences low growth. In addition to that, Amazon charges money on FBA while also levying storage fees. The storage fees could increase if it is stored for a period of six months or more.
Is Dropshipping Still Worth in 2024?
If your objective is to generate good revenue by starting an online business, then dropshipping is definitely the way to go. But remember, in dropshipping, it takes a certain amount of time to become profitable. If you want to generate a lot of revenue in a short period of time, then dropshipping may not be the best choice for it.
Listed below are some of the factors due to which dropshipping seems to be failing:
- Prolonged shipping times
- Customer support is either bad or non-existent
- High product prices
- Poor product quality
- Online merchants not maintaining a professional standard
In any business model, the needs of the customer come first and the above factors point out that the reason why dropshipping is failing is because online businesses neglect the needs of the customers. Most online sellers nowadays don’t tend to focus on their customers nor do they maintain professional standards.
This also points out the fact that they don’t get repeat customers and subsequently end up creating a poor brand image for themselves.
To ensure that doesn’t happen, businesses need to make sure that they focus on their customers and remember, that customers can either make or break your business.
Will Dropshipping Survive in 2024?
Yes, dropshipping is here to stay. Of course, the dropshipping market is saturated and there is a lot of competition, but there are brands that stand out and do way better than most businesses. Similarly, if you do things the right way and focus on the needs of customers, then your online business can stand out from the rest.
In addition to that, market evaluations show that the dropshipping industry is going to reach $557.9 billion next year (2025). Also, let’s not forget the fact that nearly 27% of retailers out there use the dropshipping business model. Moreover, due to the lack of investment in warehouses and products, it could help online merchants increase their profit by 50%.
If you’re pondering on “whether you should start dropshipping or not?”, then remember that it is a great
model that can help generate revenue with the least amount of investment. here are a few reasons why you should consider dropshipping:
- People make online purchases now more than before.
- Dropshipping can help in running an online business with no hassle
- It requires almost no financial investment
- Online transactions are a breeze and convenient
- There are a lot of third-party suppliers that can help you with your dropshipping business
Why Do Few Dropshipping Businesses Do Better Than Others?
The main reason why some dropshipping businesses do better than others, and that is because they offer a way better overall customer experience. Here are a few ways how brands can offer a better overall customer experience:
- Take into account, the needs of customers
- Offer excellent customer support
- Make sure your online businesses offer refunds and more
- Offer discounts
- Send personalized SMSs and emails.
How Profitable Is Dropshipping in 2024?
Dropshipping is extremely profitable and that goes even without saying. It's a great business model that allows individuals to start an online business without hassles. This is one of the reasons why people moved from AliExpress to this business model. Here are a few stats to back that statement:
- Small online businesses are witnessing a staggering 30% increase in smartphone conversion rates.
- Dropshipping profits have reached an estimated $301 billion
Now let’s take a closer look at how the profit is made through dropshipping.
For instance, if an online merchant is selling a product worth $40 but sources the product from a platform like AliExpress for just $20, and after you take into account the delivery and marketing, the online merchant still makes a profit of $15.
So if you want to generate a revenue of over $100,000 annually, then you should sell 1000 products every month. Here’s a calculation of the same:
$15 (Profit) x 1000 (Products old) = $15,000
$15,000 monthly x 12 = $180,000
Your profits will depend on the product you sell and the volume you sell as well. So if you do it the right way, then dropshipping can help you generate high revenue.
Dropshipping vs Affiliate Marketing - Which Model Offers More Profits?
Affiliate marketing is a great business model that works on a commission basis. So if you have to make even $100,000, assuming that your commission is 5% for every sale of $100.
So, if you want to earn $100,000, then you will need to make $1000 every month without fail, this comes up to $340 every day. So if you’re getting a 5% commission for every $100, then you need to make a sale worth over $7000 every single day. It goes without saying, dropshipping is way more profitable and hassle-free.
But there are few who say otherwise too, but it all depends on how you run your business.
AliBaba Dropshipping - Is It Worth Using In 2024?
The dropshipping model does not require online merchants to stock up on products and products are sourced/manufactured only if there is an order placed for it. But AliBaba requires online businesses to buy/sell in bulk, which becomes financially burdensome as well as risky.
But platforms like Amazon, AliExpress, and similar other platforms make it easy for individuals to sell products online, without having to spend money on products, inventory management, warehouse, and more. Therefore, AliBaba may not be the best choice if you aren’t dealing with bulk quantities.
Challenges That Dropshippers Encounter In 2024?
Here are a few of the challenges that dropshippers face:
- Prolonged delays in shipping can lead to a decrease in repeat customer
- There are times when the intended customer doesn't receive the product
- There are several online merchants who don't’ follow dropshipping protocols, which makes tasks a lot more tedious.
Here are a few things you can do to overcome these challenges
- Work only with suppliers
- Before listing products look for products that are trending it will increase the sales rate and subsequently revenue as well.
eBay and Amazon Dropshipping: Can You Start Dropshipping With These Platforms?
There are quite a few people who think it is not possible to start a dropshipping business with eBay and Amazon, and the truth is that you can start an online dropshipping business. Although there are certain platform restrictions, they can all be worked on!
The main restrictions are, with eBay, you need to be living in the US and eBay does not allow products from China. Amazon requires that deliveries be done within two weeks. These and similar other restrictions are the main reason most online businesses avoid these two platforms.
Is Dropshipping Legal in 2024?
Dropshipping is absolutely legal, but if you’re starting a business, you need to make sure you are well aware of business/tax laws and regulations of the region you’re starting the business in. This is extremely important, failure to comply with legal tax and business regulations can lead to heavy penalties.
Here are two things you need to be aware of:
- Make sure you always sell good quality products, if you advertise great products and sell poor quality items, then your business could face legal repercussions for false advertisement.
- You should always be aware of all the laws of the region you’re residing in.
Wrapping Up
Well, the answer to the question “Is Dropshipping dead?” Is NO, dropshipping isn’t dead and it definitely isn’t going anywhere. On the contrary, the dropshipping industry is expected to grow significantly in the coming years.
So if you’re planning on starting an online dropshipping business, you should definitely go ahead and do it. But also make sure you do things the right way and then you can also churn a good chunk of revenue regularly through it.
