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A lot has been said about dropshipping, and critics have said that dropshipping on Shopify might be on a downward trend. However, from an expert’s point of view, this has never been further from the truth.

In this article, you will find all you need to know about Dropshipping in 2022 based on a Shopify Expert review.

Is Dropshipping Dead in 2022?

2022 as a year can be described by many as unpredictable. The persisting pandemic has seen the prevalence of different strains of the virus, and in the process, a spike in infection numbers. Political unrest has also sent rippling effects to businesses all over the world. In addition to this, the enactment of a new set of policies governing the operation of businesses has put the world of business in a tumultuous state.

With all these factors, running any form of business is proving difficult, but what does this mean for dropshipping? Is this the last nail to the coffin? The answer is a resounding no. Contrary to this, the pandemic has seen a boom in eCommerce platforms and dropshipping has greatly benefited from it. Safety measures instigated by the government saw a drastic drop in shopping malls and other physical shops. This in turn created a gap between the suppliers who had their products tucked away in warehouses and consumers that could not access these products conventionally. This gap has effectively been filled by eCommerce platforms, including dropshipping platforms.

[.highlight-text-box]Consequently, the profit margins realized by dropshipping have been relatively high as compared to previous years, and under the current circumstances, this is a big win for the dropshipping industry.[.highlight-text-box]

So yes, Dropshipping is still alive and it will always be!

Is Dropshipping Still Profitable?

Despite the spike in the net profit and sales, the question of the overall profitability of dropshipping still remains at the back of the minds of prospective entrepreneurs.

Dropshipping, despite being less demanding in terms of money and resources, still requires a significant amount of diligence to be profitable. Therefore, the success and overall profitability of a dropshipping business primarily lie with the owner. However, with this in mind, when all factors are kept constant, dropshipping is a very profitable venture, when done right.

Unknown to many, dropshipping is a business like any other. Careful management and investment are directly proportional to the amount of profit realized. Many get into dropshipping expecting to realize large amounts of money, all while making little or no investment. Such people, after no time in the industry, will always realize the graveness of their misjudgment and sometimes end up packing up shop and leaving the business. These people might unknowingly conclude that dropshipping is a white elephant.

On the other hand, with the right attitude and skillset, entrepreneurs can begin working in dropshipping and end up reaping profits by the boatload. This can be achieved by following a few rules and doing proper research beforehand. Basic business knowledge is also important in getting profits to pour in. Fulfilling these minimal prerequisites can therefore be the difference between success and failure in the cutthroat business industry.

[.highlight-text-box]To directly answer the question of the degree of profitability of dropshipping, then the answer is definitely yes. When done right, dropshipping is a golden goose.[.highlight-text-box]

But it's still a bit harder to be successful in dropshipping. Let's see why.

Why is Dropshipping harder in 2022

The advantages to dropshipping might be enticing, especially in 2022 but there are a lot of stumbling blocks, but not any more than every other business out there. Among the numerous problems encountered while engaging in dropshipping are:

Too many competitors

The opportunity to realize a lot of profits is analogous to honey attracting a swarm of bees. Many entrepreneurs want in on the action. This has an undesirable effect on other dropshipping businesses. An influx of other interested parties in the industry leaves the others at a disadvantage.

Also, Dropshipping has been a real trend since a few years now and a lot of contents on Youtube has been shared to millions of people. So everyday, there are hundreds of new people launching their Dropshipping store on Shopify.

Running a dropshipping platform rarely demands large amounts of capital investment. This is both a blessing and a curse. The blessing lies in the fact that for an entrepreneur, the risk factor in starting and running this business is greatly reduced. On the same front lies the curse. The minimal amount of capital investment also means that it is possible for competitors to sell products at ridiculously low prices, this is all in the name of attracting a large number of consumers. This might hurt other businesses that cannot afford to operate under similar conditions.

Large amounts of dropshipping platforms also provide the opportunity for the creation of substandard business platforms. These dropshipping platforms usually have poorly developed websites and sell poor-quality products. The effect of this is that consumers lose faith in eCommerce, which translates to fewer sales and consequently less profit. This unhealthy competition also nurtures an environment that takes out any well-invested businesses.

Consumers are more aware of Dropshipping stores

Dropshipping stores are digitized middlemen. What they essentially do is make a profit from connecting the seller and buyer. This usually elevates the price of the product from the original price offered by the producers. When people find this out, they tend to cut out the middleman and go straight to the supplier. Working around these dropshipping stores cuts out the profit they are set to gain.

More and more people learning about how dropshipping stores, how they are operated, and how to to identify them reduces the chances of them making purchases from them.

Top 5 Biggest Changes in Dropshipping

As earlier stated, dropshipping businesses are dynamic. Over the years, the methods of operation have changed drastically, usually to match the changes in the external environment of the businesses. There have been a lot of changes witnessed in the dropshipping store business, many of which were previously unprecedented. Examples of these changes include:

You need to build a real brand

In the past, starting up a dropshipping store was as simple as going online and starting up a website from which clients could make orders, and after-sale services were minimal or non-existent. This trend is however impractical today. In a world where a five-star rating is the goal of every business in operation, sales alone are not enough to attract and retain trustee clients.

For dropshipping stores of the present, building a trusted name brand, with clear brand positioning is more than necessary. This, however, is not enough to stay afloat. Increasing customer engagement is another important aspect to cultivate. People want information about the products you have for sale, the time taken for shipping, the aftersale services offered by the store, and a lot more. For any successful dropshipping store, defined values and engagement all demand the owner’s attention. A look into the past shows that this has not always been the case in previous years.

You can’t sell cheap products

Running the store can be difficult even for the most experienced. Single purchases are not sufficient to maintain the business at a break-even point. Selling cheap products usually translates to poor-quality products. These products may attract consumers to your store at first, but returning clients cannot be obtained from this method. In simple terms, people will not buy from your dropshipping store twice.

Selling cheap products also affects the business’ reputation. For any entrepreneur worth their salt, the knowledge of the pivotal role played by reputation affects the number of customers and sales of the business. Reputation is significantly more difficult to build and maintain, and just like a house of cards, a jab from the wrong direction will have everything crumbling down. Reputation affects the number of clients that make purchases from a recommendation basis. It also positions you strategically when dealing with unknown customers, who might have been channeled from an online advertisement campaign, or any other advertisement campaign of similar nature.

[.highlight-text-box]In the past, selling cheap products in dropshipping stores was not only possible but also widely practiced and accepted as a profitable method of operation. This idea is slowly being disproven, and an emphasis on better quality is gradually being adopted.[.highlight-text-box]

You have to Optimize the Retention more than Acquisition

Getting customers to actually buy products from your dropshipping store is difficult. This might involve a lot of strenuous processes such as running advertisement campaigns, having holiday offers and other attractive discounts, establishing a customer loyalty reward program, or even offering cashback options and after-sale services. This is an expensive undertaking, and should, therefore, bear fruit by attracting more clients to the business.

To validate taking such big steps for organic advertising, one has to ensure that they not only attract these new clients but also maintain them as regular paying customers. Running the dropshipping store on a short-term basis is difficult, and therefore focusing on making your customers buy again becomes a priority on the entrepreneur’s to-do list to improve the customer’s lifetime value.

This has not always been the case for dropshipping stores. Optimizing customer retention has only recently begun to become a priority for businesses of all nature and dropshipping in particular.

You must offer fast delivery

Competition for dropshipping does not always come from other dropshipping businesses. Same-day delivery offered by other eCommerce platforms drives clients to consider them as the best option. In a time when physical stores were the only shopping method available, dropshipping stores would have been able to experience delays in delivery and still maintain customer approval. Those days are long gone and to stay above water, dropshipping stores have to ensure fast delivery of products.

To achieve this feat requires flawless communication between the store manager and the supplier, but once this is mastered, the benefits to be enjoyed are in plenty.

You need to find other ways to acquire new customers

Most dropshipping stores promote their products by Facebook Ads and influencers to attract customers, but this is now too expensive and only ended up lowering the profit realized by store owners.

For this reason, you have to find and test other channels such as Tiktok, Snapchat, Youtube and many other to reach customers and by doing so increasing the number of new clients for your store. You have to be smart, most advices from Dropshipping Youtubers are now outdated

[.highlight-text-box]If you want to succeed in Dropshipping Ecommerce, you have to think Out of the box.[.highlight-text-box]

Should You Launch a Dropshipping Store?

If you are looking for a profitable business that requires minimal capital to set up and operate, then a dropshipping store might be what you need. This store will allow you to make profits without having to deal with stocking complications, and greatly reduces other risk factors from a diverse field. However, as previously stated, like any other business, it is imperative that diligence and dedication be the pillars on which your store is built.

Making quick money is not an option when it comes to these dropshipping stores, and if this is your main area of interest, then an alternative business might suit you better. Dropshipping businesses are only profitable in the long run, and this is only possible when you work hard to make them a success.

In conclusion, the year 2022 has a lot to offer, and it might not all be a bed of roses. Selecting a business venture is difficult, and the risks arising from the currently murky waters of business offer no consolation. Setting up a dropshipping store, however, reduces the risks while maximizing the profit and should therefore be considered among the top choices for business ventures to consider.

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