The Future Of Shopify Dropshipping (2021)

Find out about the future of Shopify Dropshipping Below!

The Future Of Shopify Dropshipping

A lot of people are under the impression that dropshipping is dead. The statement may seem valid, but it can also come from a set of people who have tried dropshipping and failed at it. Apart from that, people who want you to change your line of business and do something that would benefit them may also put you under the impression that dropshipping is dead.

However, dropshipping can build a profitable business if done right. You do need to spend some money while getting into the business and maintain steady cash flow until you become profitable. But to understand if dropshipping is really dead or not, we will have to study deeply about the feature.

We need to understand how Shopify Dropshipping started, how it became popular, what are its problems and if the business model works well in the current scenario. With the rise of eCommerce, dropshipping may or may have a future.

What is dropshipping?

Dropshipping is a unique business model where you play as a middleman between the supplier of the product and the customers of the product. In simple terms, you will market the products of a particular supplier to receive orders from potential customers. After these customers have given you the orders on the products, you will send them off to the supplier. The supplier will then ship these products to the customer. This way, you won’t ship the actual product or would have to hold the inventory for the same. All you have to do is market the product and somehow, brokerage its exchange between the supplier and the customer.

Dropshipping is of different styles but the core functionality of the business model stays the same. For example, in Private Labeling, the supplier makes the products that have specific brand names and labels them. However, it is still the supplier who sends out the products to the customers.

The best part about dropshipping is that you don’t hold any inventory of the product or handle its shipping. You also don’t need to invest too much in the stock, but just source purchase orders. You set an amount on the product with the supplier and charge the customer a lot more. This way, you keep the difference, i.e the profit with yourself.

The history of dropshipping

Dropshipping is a business model that ages back to the 1950s when it was known as the mail order. Many businesses and individuals distributed product booklets and catalogs of the products amongst potential customers. These companies neither made the products nor sold them. They just printed the catalogs, distributed them and collected orders from the customers, if any. If any of the customers liked some products, they would place an order via phone or mail the payment for it. The catalog business would then call the supplier to place the order, who would send it directly to the customer’s doorstep.

The future of dropshipping

The rise of the internet, lucrative returns and amazing platforms like Shopify have made dropshipping an incredible way to conduct business.

Amazon was one of the first companies to tap into the potential of dropshipping in the last decade. Though the model has slightly changed over the years, it started off as a dropshipping one and still remains one at its core. Amazon grew over the years to become an eCommerce giant through dropshipping alone. It used to list products of thousands of retailers and inform the suppliers whenever a customer placed an order on the website. Several companies thus took a page out of Amazon’s book and started building the same model.

It is safe to assume that the benefits of a dropshipping model are way too many for it to die in the next couple of years. Several big players of the industry run on this model and if numbers are to be believed, it is here to stay.

How dropshipping became popular

The ability of the suppliers to source the raw materials or the actual products at an extremely cheap rate was pivotal to the success of dropshipping. The multinational eCommerce sites like Alibaba and AliExpress today can ship their product all around the world. Since most of these products were manufactured in China, they were extremely cheap to purchase. Apart from that, the manufacturers promise to ship them anywhere in the world, making it accessible as well.

However, the problem that dropshipping faced was an individual website and store. It isn’t easy to create one and it takes a lot of time as well. Earlier, all the orders too had to be placed manually and the payment structure was too complicated to function. But Shopify made all of this a lot easier.

How Shopify dropshipping started

Shopify launched its eCommerce model in 2004 and has a dropshipping platform that is no different from the others. The Shopify platform is used by the dropshippers to put up a store and sell their products.

Shopify has made the process of building and managing an eCommerce store simple and easy to use. Shopify provides all the features that a dropshipper may need under one roof so that they don’t need to worry about technical expertise or any extra tools.

The low costing, functionality, and ease of use made Shopify an ideal platform for dropshipping, making it a prime choice for many. This meant that these people no longer had to write an HTML code to build the right store with product and payment integration. Shopify did this all for them at a reasonable price. Shopify thus grew to become the #1 platform for eCommerce and dropshipping.

Shopify’s growth

Shopify made building an eCommerce store online much easier for everyone out there, and thus, has become a leading platform that supports over 600000 businesses across 175 countries. Currently, Shopify has over 425000 active stores in which over 1 billion orders have been placed till now. The company has seen consistent growth since its debut in 2004 and recorded a revenue of over $1 billion in 2018.

Shopify stats

Most of the businesses today are focusing all of their energy online as it has proven to be a great space for generating revenues. Retail shopping is on a decline and the customers want to stay at home and buy as many products as they can. By the end of 2017, the revenue that the online stores in the US generated was over $100 billion. Therefore, many brands today are choosing to close their brick and mortar stores to focus their entire business online and generate revenues from there.

The rise in the number of people willing to buy their products online has also given rise to dropshipping. Most of all, the orders that come in from different countries are also getting cheaper, making the users buy products from all over the world. The customers now prefer to wait for their product to arrive and love testing them out instead of going back to their old, trusted brands. Thus, the rise of eCommerce has also made dropshipping grow.

The future of Shopify dropshipping

The ease of dropshipping and the ability to generate quick results with orders and revenues is the reason why it got so popular. This made a lot of people take up the drop shipping opportunity and try the business model for themselves.

However, one shouldn’t get into dropshipping with the sole purpose of making quick money. People who have tried their hand at this business model without a viable strategy or plan have failed miserably. Dropshipping is more than just setting up a store and listing some products online. Not only do you need to understand your product well, but you also need to understand your audience. This way, you will be able to set up your products right and get good returns.

Another major aspect of dropshipping is to build a relationship with the customer. If you are not on good terms with your potential customers, you will never be able to sell them a product. Therefore, only the people who haven’t understood the full potential of dropshipping or have tried it as a business opportunity have failed at it. These are the ones who continue to say that dropshipping doesn’t work and is dead.

Conclusion

Shopify dropshipping is dead only for the ones who tried it and failed. For others, failure is a part of the process and you need to give a business model some chances before you finally succeed. Dropshipping, as a business model, requires a lot of time and energy. Therefore, you will really have to wait to see the good results and a 7-figure payment. You can also test some products on a niche market and see if they work out. You can then prioritize them on your store list. This way, you will also be able to put your most popular work in the front but also get rid of the old things that didn’t work. Shopify can be great for your dropshipping journey if you give it a fair chance.

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