Dropshipping. Hard or easy in 2024? +Practical Tips

Dropshipping has become increasingly popular in the contemporary world nowadays. It has penetrated everywhere – into the economic systems and networks of large markets. But what is dropshipping? Is it easy to develop this concept and the principles of its work, or is it very difficult, almost impossible in 2024?

• Dropshipping (especially for beginners) presents a myriad of challenges, including a significant lack of control over various aspects of the business. This makes it difficult to manage inventory, ensure product quality, and uphold delivery times. Furthermore, the most profitable niches in dropshipping are fiercely competitive, which means standing out and securing a market share requires substantial effort and resources.
• In 2024, the landscape of dropshipping has become even more challenging. The competition has surged, yet consumer demand has not seen a corresponding increase. According to Statista, nearly 23% of all online sales are now fulfilled by dropshipping. This indicates that while the model retains significant market penetration, the majority of sales, 77%, are still dominated by industry titans like Amazon and other well-established e-commerce platforms.
• Committing to a dropshipping supplier poses its own risks. An unreliable supplier can result in poor customer experiences due to delayed shipments or low-quality products. Dropshippers must also face the formidable competition from Amazon Prime, which offers lightning-fast shipping speeds and a seamless customer experience. This is a high standard to meet for most small online retailers.
• Moreover, dropshippers require a consistent influx of traffic to achieve significant sales figures. The saturation of the market means that nearly every product you wish to sell is already being offered by hundreds of other dropshippers, making the discovery of “hot” products challenging. By the time a trend is identified, it is often oversaturated.
• Additionally, operating a dropshipping store demands a significant time investment in social media marketing. According to a study cited on Oberlo, dropshipping businesses with an active presence on at least one social media platform tend to see a 32% increase in revenue. This highlights the importance of social engagement and brand visibility in driving sales. However, maintaining such a presence can require anywhere from 10 to 50 hours of work per week.
• Other difficulties that dropshippers face include the rising cost of paid ads and frequent platform bans, which can stifle marketing efforts and result in sudden disruptions to business operations. Without careful management and strategic innovation, these factors can severely impact profitability.

Despite these hurdles, there are ways to alleviate some of the challenges inherent in the dropshipping model. By exploring partnerships with reliable suppliers, focusing on niche markets, and adopting creative marketing strategies, aspiring dropshippers can carve out their own space in this competitive industry. Read on to discover more about the obstacles to dropshipping success and explore three strategies to potentially simplify this complex business model.

5 Reasons Why Dropshipping is Challenging and Practical Solutions

1. Dropshipping is Challenging Due to Lack of Control

While eCommerce sales were projected to grow by 10.4% in 2023, dropshippers face unique challenges because they have minimal control over critical components of their online business. Issues such as supply chain disruptions, unpredictable shipping times, and inconsistent product quality are significant obstacles. According to eMarketer, these factors underscore the necessity of having high-quality products – without which, the business cannot thrive.

To navigate these challenges and improve your competitive edge, aim to sell products that can be marked up by 300% of the retailer’s price. This requires strategic marketing and positioning, focusing on elements within your control.

Consider the following strategies:

• Craft Engaging Product Descriptions: Engage potential buyers with compelling and informative descriptions.
• Utilize High-Quality Visuals: Incorporate professional-level images or videos that have the potential to go viral, capturing consumer interest.
• Develop a Unique Selling Proposition: Create a unique angle for your products that distinguishes them from competitors.
• Emphasize Benefits Over Features: Clearly highlight how your product can improve customers’ lives, prompting immediate purchases.
• Incorporate Free Shipping: As revealed by a Baymard Institute study, free delivery remains a powerful purchase driver, so consider embedding shipping costs within the product price to incentivize buyers.
• Use professional dropshipping plugin for WordPress to automate your daily dropshipping tasks like correct product prices, stock, etc.

By focusing on these strategies, you can mitigate some of the inherent challenges of dropshipping and drive sales despite having little control over various aspects of your business.

2. Dropshipping is Challenging Due to Highly Competitive Profitable Niches

The dropshipping industry has experienced significant growth, increasing its value by 3.5 times since 2020. Industry analysts forecast that by 2026, the global market size will reach approximately $476.1 billion, marking a staggering increase of $347.5 billion over six years. This growth has intensified competition, particularly in profitable niches.

To succeed in this dynamic marketplace, it’s crucial to leverage research tools like Google Trends, Google Search Console, etc. These tools can help you uncover valuable insights such as:

• Search Volume Trends: Understand the current and historical search volume for specific products or categories.
• Economic and Seasonal Fluctuations: Identify spikes in search interest that may be driven by economic conditions or seasonality.
• Related Queries and Underserved Markets: Discover potential opportunities to fill gaps in the market by exploring related searches and topics.

Analyzing Amazon’s Best-Seller list and top products on platforms like Etsy and AliExpress can provide further insights into what is currently trending. Consider how you can differentiate by offering similar products with improvements or added value.

The goal is to identify an evergreen niche with low competition and high search volume. This niche should ideally encompass a variety of products, increasing your potential sales opportunities. Product selection is critical: aim for items with a proven track record (typically 1,000-5,000 orders on platforms like AliExpress) and test their viability with targeted ads on platforms like Facebook or TikTok.

Additionally, focus on products that are not yet saturated. Seek out items that are either hard to find, have a significant wow factor, solve a common problem, or are on the cusp of becoming trendy. This approach increases your chances of standing out in a crowded market and capturing customer interest.

3. The Dropshipping Business Model is Challenging Due to the Risks Involved with Suppliers

Committing to a reliable dropshipping supplier is a critical and often daunting aspect of the business model. Traditional methods of sourcing suppliers from China have become less viable due to slow shipping times and frequent supply chain disruptions. These issues can lead to inflated shipping costs and a wave of customer complaints. Notably, research indicates that 66% of online shoppers are likely to switch to a competitor that offers multiple shipping options.

Adding to the complexity, a recent study found that 84% of dropshippers identify sourcing a dependable supplier as one of the most challenging aspects of their operations. To mitigate this risk, it is crucial to engage multiple suppliers (ideally 2-3) and vet them thoroughly.

Important questions to consider when evaluating a potential supplier include:

• Do they provide dropshipping services?
• Are they the product manufacturer?
• Is there a minimum order requirement?
• What are the estimated shipping costs and delivery times?
• Who is responsible for duty taxes and customs fees?
• Do they offer multiple channels for communication?
• What is their policy on managing refunds and returns?
• Can they assure high-quality inventory and professional packaging?

Since 2024, AliExpress has been making strides to address these common concerns. They’ve introduced the AliExpress Choice, marking sellers who meet higher standards for shipping time and quality. Additionally, they have expanded their warehouse presence in Europe to enhance shipping efficiency to those destinations. It’s advisable to thoroughly examine seller information and reviews on the AliExpress portal, conduct test orders, and discuss refund policies with potential sellers before committing. These steps can help you navigate the risks and build a more resilient dropshipping business.

4. Dropshipping is Challenging Due to Competition with Amazon Prime

One of the major hurdles for dropshipping businesses is competing against the speedy delivery promises of services like Amazon Prime. As consumer expectations for expedited shipping rise, data shows that 62% of shoppers expect their orders to arrive within three business days and often expect free shipping as part. This makes it crucial for dropshippers to be transparent about delivery times and competitive in other areas.

To remain viable against this backdrop, consider offering either a more attractive price point or superior product quality compared to what customers might find on Amazon. Developing a unique selling proposition can also set your business apart; for example, emphasize cost savings over convenience, or promote sustainable delivery options to capture the eco-conscious market.

Customer service plays a pivotal role in distinguishing your business. Be proactive and responsive if a customer experiences issues with shipping or product quality. Consider offering incentives like a free sample or discounts on future purchases as a gesture of goodwill. Validating your buyers’ concerns not only demonstrates attentiveness and dedication to customer satisfaction but also helps build trust and loyalty.

By enhancing these aspects of your business, you can drive more online traffic to your dropshipping store and potentially increase sales, even in the competitive atmosphere dominated by Amazon Prime’s rapid delivery services.

5. Dropshipping is Challenging Because Generating Traffic is Essential for Sales

Driving traffic is a critical component of success in the dropshipping industry. Research indicates that approximately 62% of dropshipping stores are based in the United States, with Shopify reporting that there are 875,000 U.S. accounts, making up 50% of its total merchants.

To capture customer attention, it’s vital to excel in marketing rather than merely mimic other dropshippers. Create tailored ad copy and unique video content that highlights the benefits of your products instead of just their features. Adding a WOW factor or a creative twist can help your marketing stand out and capture potential customers’ interest.

Additionally, focus on on-site optimization. Given that many customers may not make a purchase on their first visit, employ retargeting strategies using SMS and email marketing to re-engage potential buyers effectively.

The competitive landscape of dropshipping has intensified, leading to a saturation of the market. The sheer volume of stores promoting dropshipped products means that in 2024, it’s becoming increasingly challenging for new entrants to distinguish themselves and achieve success. Dropshippers must be prepared to invest significant time and effort into crafting a unique brand identity and marketing strategy to stand out from the competition. As the marketplace evolves, those who innovate and connect meaningfully with customers are more likely to thrive.

How does dropshipping work?

Have you ever wondered what this whole process looks like from the dropshipper side, for example, the same Aliexpress? Let’s take a look and see if the principles of dropshipping work are easy or it is very difficult.

1. The creator of AliExpress at the beginning of his journey chose a niche in which he wanted to trade, which later developed into a variety of things sold.
2. Then, the service found a supplier who will provide him with the entire product.
3. After approval, AliExpress posted a catalog of its products on the website of its online store. The company sets the price with its own margin, the amount of the margin of which will then go to its capital.
4. The creator carries out an advertising campaign for his online store in all possible ways to attract the attention of buyers and convince them to purchase goods.
5. The buyer came by advertising, put the product in the basket, issued it and paid
6. AliExpress notifies the supplier about the registration of the goods. The supplier from his warehouse sends the goods to the customer through a logistics company.
7. The company paid the goods to the supplier at the wholesale price, and itself took a percentage of the margin as a profit.

As you can see, the scheme of the principles of dropshipping is quite simple. But each simple scheme has its own nuances, and dropshipping is no exception to the rule. It has both advantages and disadvantages. On the one hand, the obvious advantage is the minimal costs of organizing such an enterprise, the absence of responsibility for the design, packaging and delivery of goods and the absence of a specific geographical reference to the store. And on the other hand, everything is quite complicated here. Firstly, there is too much competition between sites, and in the case of large sites – between suppliers’ goods. Also, in case of any problems, it is the online store that will be responsible, not the seller.

Thus, dropshipping outwardly seems easy to master, but in fact it is very difficult. Even entrepreneurs who are knowledgeable in marketing and have the right personal qualities face problems. But there is a way out that will greatly facilitate the work of an online store running on dropshipping. We present to you AliExpress plugins, which you can read in more detail at the following link . Plugins will save you time and fill your work with only positive emotions from using them. Many dropshippers started their journey with their help. Why don’t you try it too?