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Why is Dropshipping So Popular?
According to estimates, the dropshipping market is valued $200 billion, up 53% from 2020. By 2027, analysts expect it to be worth $500 billion.
The pandemic is largely to blame for dropshipping’s meteoric rise to fame. According to research, 52% of people shopped online more frequently than they did before the epidemic, with one third of them making purchases they would have made at traditional stores.
Why Did It Become So Popular During The Pandemic?
Before the pandemic, dropshipping was beginning to gain traction, but during the lockdown, its appeal skyrocketed. When businesses, stores, and restaurants closed, a lot of individuals lost their employment, which led many of us to consider alternative sources of income. The fact that we were all confined inside made this situation considerably more challenging. Since dropshipping needs little to no initial investment, it swiftly rose to the top of people’s searches for at-home income opportunities.
A reputable dropshipping supplier will not only offer a broad selection of items, but also a variety of support services that will help you operate your business without worry. As a result, you won’t need much business experience to get started.
For instance, at some suppoiers design services for branding, plan photoshoots or films to promote new product launches, and even provide customer care for your customers. You may therefore concentrate solely on developing your brand without having to bother about answering emails and other communications.
Dropshipping Advantages in A Nutshell
We’ll go over it to make it easier for you. These are the main advantages of dropshipping
- You won’t have to purchase stocks until the customer has placed an order.
- You will not be stuck with un-sold products since orders are processed on-demand by your supplier
- The operational costs are minimal because you’re using an outside supplier to handle the logistics
- It is easy to integrate your dropshipping service to the most popular e-commerce platforms (depending on the service provider you choose)
- You can select from a range of White Label products which can be customized (depending on the vendor you select)
- The only thing you need to be focused on are the fun aspects of your business, such as marketing designing designs and building your brand
How do we know that dropshipping will be viable in 2022? Let’s look at some of the information.
Dropshipping Market in 2022
The popularity of internet shopping and working from home seems to have declined as more people return to the workforce and stores begin to reopen. So, even if dropshipping is obviously simple to accomplish and low-risk, is it still worthwhile in 2022?
Let’s go a little deeper. Look at the statistics showing the popularity and expansion of the dropshipping industry
Projections and Growth Rate
According to Market Data Forecast, the dropshipping market was worth around $128 billion in 2020. Dropshipping is anticipated to expand at a compound annual growth rate of 32% between 2022 and 2026.
Similar data can be seen in another Grand View Research analysis, which predicts that dropshipping will continue to increase at a 28.8% annual pace until 2025. Accordingly, the dropshipping industry will grow to $557.9 billion by 2025.
These statistics illustrate that dropshipping (and ecommerce in general) had expanded even after lockdowns were lifted and many of our lives started to return to normal.
However, it’s not only about the market expanding; online consumers continue to be interested in the subject. Let’s look at some statistics from Google Trends:
As you can see, the term “dropshipping” has a rising tendency in general. This indicates that buyers are frequently looking for the term, probably to learn more about it.
The same is true of similar terms like “Amazon dropshipping” and “Shopify dropshipping.” This makes sense when you consider that third-party suppliers who use dropshipping models account for over 50% of Amazon sales. Or that dropshipping retailers are becoming increasingly dependent on the Shopify platform.
What does all of this mean? The dropshipping industry is constantly expanding, and online customers are still quite interested in the concept. It is very evident that launching a dropshipping company in 2022 is still a wise move.
Some Drawbacks of Dropshipping
Even though the business is booming and consumers are interested, dropshippers nonetheless encounter some difficulties. But don’t worry, any obstacles may be easily overcome with the appropriate knowledge and plan. Let’s go over some of the most typical problems and their solutions.
Too Much Competition
That question has just one short answer: categorically not. The data demonstrates that the ecommerce sector is always expanding, necessitating the necessity for an increasing number of shops to satisfy that need.
The challenge of differentiating yourself from the competitors remains, though. All you have to do is select the appropriate niche for your business and conduct thorough research. Find information about the top products in your niche, the people who could be interested in buying them, as well as your competitors.
You can utilise tools like SpyFu, which will display the most profitable keywords used by your competitors, BuzzSumo, which tracks the most effective social media posts, or Se Ranking, which will display the most profitable keywords used by your competitors.
Right Product Selection
In order to run a successful dropshipping business, selecting the correct product supplier is essential. You wish to provide a selection of high-quality products that customers will like. Before choosing a supplier, make sure to request samples and test out the different goods.
The most crucial aspect of deciding what to market is simply to consider your audience: what do they need, what do they value, and how can you make their lives easier? Maintaining client satisfaction should take priority above increasing sales. You establish a strong brand reputation and a long-lasting partnership in this way.
You can use Ecomhunt tool for selecting winning products
Importance of Customer Satisfaction
Customers service can sometimes be neglected by business owners who rely on dropshipping from a third-party supplier. The success of any business depends on taking care of your customers, and a dropshipping business model is no different in this regard.
It can make or break your business to have customer support in place that will alert your customers to any delivery delays, stock changes, or new launches and that will address questions or complaints. It shows your concern for your customers, but more significantly, it shows your professionalism and the reliability of your business.