These are the two questions that come up yearly: Is it too late to start an e-commerce business with dropshipping now? Can dropshipping still make money? Today’s post objectively analyzes these hot dropshipping questions and shares insights from China sourcing experts.
Is dropshipping dead?
No, dropshipping is still alive. However, it’s not as easy as some gurus claim. If it were that simple, everyone would be financially free. Whether you can make money depends entirely on your approach, such as the products you select to sell, your marketing strategies, and your initial reasons for choosing dropshipping.
What are the three modes of dropshipping？
There are currently three dropshipping modes, each with different marketing strategies.
The traditional mode like AliExpress dropshipping
The most familiar dropshipping mode to us is to dropship products from AliExpress and resell them in your store. This approach indeed requires no upfront investment in inventory, making it low-risk. Some people have made money through this mode by listing thousands of products and aggressively advertising them. However, this is only a tiny minority. The majority, around 99%, have failed.
Because this dropshipping mode relies heavily on listing a wide variety of products and continuously advertising to drive traffic. To make money, the price difference between retail and purchase prices must be large enough to cover the advertising costs.
However, the lifespan of products is not very long. Once one of your products starts selling well, many other sellers will quickly join in. At this point, you must search for new products and restart your advertising efforts. You never know when the product you’re selling well will die off. So, you need to continually find new products and optimize advertising strategies.
This is a time-consuming and labor-intensive process. Moreover, it demands a high level of expertise in product selection, advertising, and operations. This is why most people fail and claim that “dropshipping is dead”.
Dropshipping as an approach to test products & markets at low costs
Another popular approach to dropshipping is to test products and markets, rather than using it to make money.
Just like many of our clients starting their e-commerce businesses, they know nothing about products and marketing, so they tend to invest small amounts of money to test selected types of products. Once they discover that certain products sell well, they’ll focus their efforts on these, refining marketing and operations to make profits and build their brand.
This approach is less tiring than the mode of mass product upload and advertising promotion. Not only is this dropshipping mode worth it in 2024, but it’s also sustainable for long-term business development.
Dropshipping as a fulfillment way to optimize the supply chain
Most successful dropshipping sellers will reach this stage – utilizing dropshipping to optimize their supply chain and reduce costs.
Some of our clients entered e-commerce with dropshipping, and as they gained experience, they developed a certain level of product mindset and operational capabilities. They want to improve their supply chain management to reduce product, logistics, and warehousing costs.
Typically, they concentrate on some well-performing products, sourcing and stocking in moderate quantities, such as holding two weeks or a month’s worth of inventory in our warehouse. Through bulk purchasing, they can obtain factory product prices. For their goods, we’ll ship batches to their fulfillment centers as required or help them with dropshipping from China, saving on product logistics and warehousing fees.
Is dropshipping still profitable?
Whether dropshipping can be profitable closely relates to some key factors, including where you sell your products, the type of products you sell, how you market and promote your goods, etc.
Different platforms varying in store operation and marketing
On major e-commerce platforms, especially on Amazon, operational refinement has long been underway. Additionally, most Amazon sellers use FBA or find a 3PL with warehouses in their target markets for order fulfillment.
If your product lacks any significant advantages, using the approach to directly dropshipping from your supplier (like AliExpress dropshipping) will result in longer delivery times for packages to reach customers. More importantly, product quality relies entirely on your supplier, and inadequate after-sales service can lead to poor shopping experiences, making it difficult to compete successfully.
If using Shopify to set up a store on Google and some plugins to integrate the store with the selected dropshipping supplier, you can list a wide range of products, rather than just relying on several items. Under this case, advertising and website operations are very important. Running and optimizing ads on Google and social media platforms require different advertising strategies. So, you must be very knowledgeable about marketing, or have a team to operate it.
For example, we have a client who builds a website specializing in a series of cleaning tools products, with over 100 products. His product selection team consists of 5 people, but the marketing team has over 10 people. They mainly run Facebook ads to test products. Once they identify hot-selling items, they find us for product sourcing and stocking.
Regarding the type of products to sell
Some people are good at spotting hot products and selling them fast, earning fast money. Usually, these trending items can be sold easily with just a bit of ad money. Also, the profits are often good too. After deducting advertising costs, there’s still some decent money left over. Every year, there are always some products that suddenly become very popular.
However, hot items in the market rise and fall quickly. That’s why businesses often opt for a transformation after gaining experience and capital from selling trending products. They switch to private label products, which allows them to build a brand and achieve long-term growth.
Under the private labeling model, Amazon remains a good option among all e-commerce platforms. Despite fierce competition on Amazon, it’s still the only platform where you can make money with just a few or even one product.
How JingSourcing support your dropshipping?
Different from typical dropshipping suppliers, JingSouricng provides more flexible and cost-effective dropshipping services.
Help you get factory price
Be sure to contact us once you have some experience and want to use dropshipping to test products and markets with an order valued at $1,000. We can help you bulk order products directly from the factory and provide factory-direct product prices, unlike dropshipping companies that primarily work with wholesalers.
Lower your logistics and fulfillment fees
About logistics and fulfillment, our charges are cheaper. Because our main goal is to provide convenient logistics solutions for clients, rather than making money from this aspect. As a leading sourcing company in China, our primary service is product sourcing and customization, which is our major profit source. This sets us apart from some dropshipping suppliers that expect profits from logistics.
Enjoy 1-2 months free warehousing and flexible international shipping
For your products, they can be stored for free in our Yiwu warehouse for 1-2 months. Additionally, apart from shipping to your fulfillment centers in batches at different times, we can also deliver your products individually from China to your end customers. In terms of delivery efficiency and real-time package tracking, we are on par with China dropshipping suppliers, as we collaborate with the same fulfillment companies.
Good quality control
Product quality issues can lead to numerous negative reviews and an increase in returns. At this point, sellers face significant pressure in terms of after-sales service, severely impacting store performance.
Our role is to address your quality concerns. We help you follow up on the entire product production process and conduct inspections of final products to control quality, especially to avoid inconsistencies in quality between different batches. We guarantee the quality of your products when you choose our Pro Plan and use our selected suppliers.
For defective products found during the product inspection in our warehouse, we will help you replace them for free. If quality issues are identified within 15 days of receiving the goods and evidence is provided, we will send out replacement parcels.
Ongoing supply chain optimization
On the whole, we can help manage and optimize your supply chains in China, ensuring stable product quality and supply. If there is a sudden surge in orders for any of your products, we can quickly help you find capable factories to produce in bulk. So you can avoid delays in fulfilling your store orders due to insufficient inventory. Additionally, bulk purchasing from factories can lower your product procurement costs, thereby increasing your profit margins.
What are real words I’d like to tell you?
Don’t dwell on whether dropshipping is dead or profitable. There’s no one-size-fits-all answer to such questions. Different businesses use dropshipping for diverse purposes and take different approaches due to differences in available funds and expertise. So, the key lies in your initial intentions for using dropshipping and how you execute it.
Additionally, don’t trust those so-called ‘get-rich-quick tricks’ online. I can responsibly say that 99% of beginners, the information they come across, are often just “gurus” like training institutions, boasting without real understanding. Many of them haven’t even opened stores but are teaching others how to make money.
Truly successful people won’t readily disclose their secrets to success. And those who fail often just claim that dropshipping is dead. In short, you need to think comprehensively about these issues and stay alert.
