“Is dropshipping dead?”
This is the burning question I always get a lot.
I get it — dropshipping sounds like the easiest way to make a million dollars.
It used to be true. A lot of online entrepreneurs found massive success in dropshipping.
But times have changed.
Dropshipping is NOT as lucrative as it was before.
So, to put the question to bed…
Dropshipping is dead in 2021!
But, do not take word my word for it.
I will explain in a bit why dropshipping is no longer a viable business model.
By the end of this blog post, I will answer these questions:
- Is dropshipping profitable?
- Why should you avoid dropshipping in 2021?
- What are the best dropshipping alternatives? (!!!MUST-READ!!!)
Ready? Let’s get started!
What Is Dropshipping? How Does It Work?
Dropshipping is an ecommerce business model where you sell a variety of products online and take orders, but it is your manufacturer or supplier that ships the product to your customers.
Most of these manufacturers and suppliers can be found on Chinese online marketplaces such as Alibaba or AliExpress.
You can sell the products on online marketplaces like Amazon, eBay, and Etsy.
Or you can set up your own website to sell them.
Once you accept customer orders, your manufacturer or supplier takes care of your packaging and fulfilment for you.
This means you do not have an inventory…
…and you do not own anything.
While this sounds like a dream business model, dropshipping has sort of lost its magic.
Over the years, it has been oversaturated and over-hyped.
And eventually, it has gotten a bad reputation for a lot of reasons.
Later you will find out why.
Is Dropshipping Still Profitable?
That is the short answer.
The long answer is: dropshipping is quite a tricky business to navigate these days.
Back in its early days, it was so easy to break into dropshipping.
But as time went time by, the competition started to get fiercer.
Many customers are now aware of it. And it does not sit well with a lot of them.
They feel like they are being duped for paying for crappy outsourced products.
Even if your product is protected by intellectual property rights, often this does not apply, especially in China.
So, your competitors are free to steal your product ideas.
The money and effort you spend on research and development are just gonna go down the drain. Just like that!
Nevertheless, there are probably people who can and will succeed in doing dropshipping.
The chances, however, are very slim!
5 Sad Truths About Dropshipping (Reasons to Avoid It!)
In case it’s not yet obvious…
I do not recommend dropshipping anymore.
A lot of dropshipping gurus out there will MOST CERTAINLY come at me reading this.
But it is the reality they are all trying to mask.
They want you to believe that dropshipping is still a thing…
Something that will make you rich quick!
Because they want you in their membership circle…
…they want you to pay them thousands of dollars to buy their courses, to become an exclusive member of their group.
So, is dropshipping dead in 2021?
I will burst your bubble — dropshipping is dead (for the most part).
It deserves its place six feet under. So, put it to rest already.
To justify my stand against dropshipping, here are some reasons you ought to know that those dropshipping gurus never tell you:
1. Low Profit Margin
What made dropshipping so attractive back in the day was its high profit margin.
It was easy then to find direct manufacturers and suppliers.
This means you get rock-bottom prices for a lot of goods. And sell them for at least 5x the factory price.
Today, the dropshipping’s profit margin is in stark contrast with that of 10 years ago.
You can barely make a profit out of dropshipped goods.
Because chances are the “manufacturers” you will find now are just middlemen.
These people also try to make a profit out of you.
2. Unsustainable and Unscalable
As I said, dropshipping does not require you to buy an inventory.
Dropshipping gurus always use this as their main value proposition to market their courses and whatnots.
No inventory, no stress — they say.
All you have to worry about is your online store and the marketing that goes into selling the product.
Once you get the order, your manufacturer or supplier ships the product directly to your customer.
But with so many people doing dropshipping, this value proposition is nothing but a hackneyed phrase that has lost its meaning.
And it backfired!
No inventory means you have no product.
No product means no full control over what you are selling.
No full control means it is impossible to sustain and scale your dropshipping business.
In the end, it is better to own your product…
And be able to innovate and expand from there.
3. Bad Customer Experience
In many cases, dropshippers pick their products from random suppliers abroad.
And that means quality control is far from your hands.
This is why dropshipped goods get so many complaints demanding returns or refunds.
About 10 – 15% of your customers are expected to ask for a refund or return your product.
A lot of customers have to wait patiently for 3 weeks to months to get the product…
Only to be surprised by the product’s poor quality.
If you want to do dropshipping as a passive source of income…
It is counterintuitive!
The back and forth between responding to your customers’ complaints and communicating with your supplier can take a serious amount of time.
4. Anybody Can Easily Steal Your Product Ideas
Dropshipping was so popular that it created a new critical job title — product researcher, product sourcing specialist, or whatever they call it.
The main responsibility?
To find a winning product.
This is an additional overhead cost for you.
But no matter you find the “winning product,” as soon as your competitors see it, that product is bound to be stolen.
Heck, they can even copy your online store’s design, product copy, and Facebook ads!
And the sad truth is — you can’t do anything about it.
Because you do not own that product!
The next best thing you can do is to find another winning product that is bound to be stolen again.
It’s a vicious cycle!
5. Highly Dependent on Facebook Ads
In order to generate buzz around an unknown product, dropshippers need to double down on Facebook ads.
And let’s be honest here…
Running Facebook ads is costly. And it is far from being perfect.
To make your Facebook ads successful, you need to bankroll thousands of dollars to achieve optimal results.
If you are just starting out…
If you do not have the financial backing…
Dropshipping is going to be an uphill battle.
Even if you have the moolah to support your ad spend…
Facebook ads can be confusing and downright difficult to manage.
Ad accounts suspended out of nowhere…
Constantly changing rules…
Costly cost-per-click (CPC) bidding system…
These are just three common complaints about Facebook ads that can put your dropshipping business at a great disadvantage.
Is dropshipping dead?
Dropshipping is DEAD!
Do you have other online business ideas?
Top 4 Best Dropshipping Alternatives
This is the right time to venture into other online business models…
…business that you have full control.
…business that you can call your business.
Check out these best alternatives to dropshipping here:
1. Amazon FBA
Fulfillment by Amazon (FBA), popularly known as Amazon FBA, is a massive upgrade from dropshipping.
Unlike dropshipping, though, you own your product with Amazon FBA.
You can manufacture your own product.
Or buy an existing product and put your brand on it.
Your inventory will be stored at Amazon’s fulfillment centers, where applicable.
They will pack, ship, and accommodate your customers throughout the process.
Your job is to find the best products to sell on Amazon.
It is much easier to scale an Amazon FBA business…
…simply because you have full control over it.
Amazon FBA is easy to start and grow.
You only need to learn the basics of how to sell on Amazon.
Don’t know how or where to start?
Check out the 5 Best Amazon FBA Courses!
2. Affiliate Marketing
Another dropshipping alternative that gives you real assets is affiliate marketing.
Setting up an affiliate website is easy to do.
Then you only need to pick a niche and populate your website with blog content.
After that, you can apply for affiliate programs to start monetizing your website.
Within your blog posts, you can recommend products that you are an affiliate of.
But which affiliate programs should you sign up for?
Here are some recommended readings:
- 10 Best Affiliate Programs for Beginners
- 10 High Ticket Affiliate Programs
- 10 Affiliate Programs That Pay Daily
But it is best to have your own asset, like a website, and use these social platforms to support your website.
There are so many available resources out there on how to do affiliate marketing.
If you are looking for the best programs to enrol yourself…
Check out the 5 Best Affiliate Marketing Courses!
For me, building funnels is the GOAT of all online business models.
It offers various avenues to make money.
Building sales funnels generate income through…
…automating lead generation
…acquiring new customers
…designing and selling high-converting funnels for others
What I like most about funnels is that you can use, re-use, and redesign them easily.
ClickFunnels is one of the best sales funnel builders out there.
Apart from the above-mentioned methods to make money…
These tools have high-paying affiliate programs to incentivize you.
For instance, ClickFunnels’s affiliate program is one of the most generous out there.
4. Lead Generation
Lead generation is a long game.
This is why it is not as popular as dropshipping and other online business models.
Lead generation requires a serious amount of work.
People these days want the easiest way to hit 5 figures every month.
Lead generation can help you achieve that.
But you have to put in the work.
You attract people and get their email address or contact numbers.
You can rent these assets to companies that might be able to benefit from them.
Both having an affiliate website and building sales funnels can also help you generate leads.
Once your lead generation business takes off…
You are guaranteed to have a consistent stream of passive income.
Final Thought: Is Dropshipping Dead?
I call it — dropshipping is dead.
Dropshipping gurus will be so mad at me for saying this.
But it is the reality that they do not want you to know.
Dropshipping’s heyday is over. So over.
Sure, there might still be people who could find success in it.
But it will be tricky.
Dropshipping is only good…
…IF you have more control over the quality of your products.
…IF you are selling high-ticket items from local suppliers.
Otherwise, I would not recommend dropshipping.
If you are treading the old path of finding cheap, generic items from China…
You are going to lose!
I hope I helped you clear your mind.
What do you think of dropshipping?
Let me know in the comments!