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What is dropshipping?
Dropshipping is basically a fulfillment process. You sell a product and your supplier directly fulfills the order, without your involvement in storing, packaging, or dispatching the product.
Is dropshipping dead or alive in 2022?
I have been hearing people dropshipping is dying for last 5-6 years.
Just like in 2020 or 2021, even in 2022, some still say it is dying and this business model is no longer viable; while others say it is still working. The best is to look at some data and samples that will speak more than what I could say.
I will start with Google Trends and show you a 5-year graph if it is upward trending or it’s going downwards.
You can see a dropshipping store on sale (as above), making a $21,155 Monthly Net Profit even in 2022. This is crazy!
I have many more such samples, but one should suffice here to give you an idea of how dropshippers are doing even in 2022.
Is dropshipping saturated in 2022?
In my opinion, dropshipping is a business concept and a concept does not get saturated. A product does get saturated when there are too many competitors for one product. If a product is saturated, it is for all alike whether you are a dropshipper or a non-drop shipper.
Products get saturated in the market and their newer upgraded versions come and become sought-after. Those upgraded products again get saturated over time and so on… everyone earns by selling what is in demand.
Apple iPhones come and over time the market becomes saturated. The version is upgraded with better technology and the success story goes on…
Dropshippers have to constantly keep on changing their product strategy, marketing strategy and whosoever does it in the right way will go on winning.
As per a report published in Daily Search Sheets, the dropshipping market was valued at US$ 162.44 billion in 2019 and is expected to grow at a CAGR of 18.3% during the forecast period to reach US$ 591.77 billion by 2027.
In my opinion, dropshipping is not dead in 2022, nor do I see its demise far in the future.
What is Success Rate of Dropshipping?
Frankly, I hardly have the answer. At the same time, I do not know what the success rate of physical store owners is. I also do not know the success rate of online store owners who sell their inventory.
In fact, it should not make a difference at all.
A drop shipper may be far more successful than a physical store owner or someone who sells online with his own warehouse and stocks. The vice versa is also right.
While there aren’t many online shopping statistics to untangle the exact number of online stores; as per an estimate in 2021, there are anywhere between 12 to 24 million online stores.
Among these online stores, Wayfair, a dropshipping website has done one billion in sales using drop ship suppliers from 2012 to 2020. The success rate of this dropshipping store is far more than millions of other online stores that they can only dream of.
Why is it so?
In fact, it hardly matters whether you are dropshipping or selling your own inventory. Your success rate depends on you and your business skills.
Wayfair is not an exception. I can add many more successful dropshipping stores that are successful even if their turnover is less than that of Wayfair’s.
I have found a great number of skilled drop shippers who have hit jackpots even in 2022. The only reason behind their success is they are consistent and know how to do business.
So, the right question should be how to become a successful drop shipper. If a dropshipper is unsuccessful, the business model has not failed, but the person and the reasons may vary.
In my opinion, if you understand your business and have an action plan to start it and then scale it in a disciplined and efficient fashion, you will succeed for sure.
If you go through the data available, dropshipping is still very much alive and will continue to grow over time.