Dropshipping is not saturated in 2024 for Ecommerce sellers that: 

The success of a dropshipping product depends heavily on the digital marketing strategy for promoting the product. Dropshippers that try to use the same marketing channels to promote the same products as everyone else are likely to struggle to succeed in a saturated market. That’s why dropshippers that try to copy the success of other dropshippers by using drop shipping ad spy tools like Dropispy to replicate successful marketing campaigns typically see that these opportunities close quickly as the market becomes saturated with copycats. 

Dropshipping can be extremely saturated when trying to sell to a general market. That’s why most successful dropshippers niche down and focus on a specific target market instead. Focusing on a niche allows you to understand a specific group of people to create a dropshipping store that provides an optimal solution for their specific needs. 

Those that try to start dropshipping without a proper budget of at least $500 to $1,000 are likely to feel that dropshipping is saturated because they won't have the necessary means to test products and marketing campaigns. Dropshipping requires a lot of trial and error to find profitable opportunities. 

One of the best ways to avoid saturation when dropshipping is to look for products that aren’t easily accessible. That could mean finding suppliers with dropshipping products at in-person events like trade shows or contacting manufacturers and distributors that don’t have a strong internet presence. It’s usually best to avoid easily accessible supplier marketplaces like AliExpress these days as too many people are trying to sell these products and many consumers have figured out that they can purchase directly from these sources themselves. 

Many people get into dropshipping thinking that it’s a get-rich-quick scheme. Unfortunately, dropshipping is like any other business model in that you need to work at it for an extended period to be successful. Dropshippers that try to take shortcuts are likely to find themselves in an over saturated market with other aspiring dropshippers that are failing because they have no long-term game plan.  

Many aspiring dropshippers get coerced into trying the business model after seeing social media influencers promoting dropshipping as an easy way to get rich. These social media influencers often promote over-saturated strategies that don’t work well anymore because they want to convince viewers to sign up for their course or use their affiliate link to sign up for a dropshipping platform, like Shopify.

An alternative online business model that is much less saturated than dropshipping is local lead generation. Local lead generation entails setting up websites that attract customers for local service businesses and then selling the leads to real local service businesses for $500 to $3,000/month. Local lead generation is less competitive because it has a slightly higher barrier to entry than dropshipping, as you need some basic SEO and sales skills. 

In the following article, we discuss why dropshipping is more challenging these days and some effective strategies to avoid dropshipping marketing saturation. 

Is Dropshipping Saturated? 3 Reasons Why The 

Dropshipping Market Is More Challenging Now

1. More dropshippers each year

More dropshippers are trying the business model each year. According to the DropShipping Helps website, there are now over 1 million active dropshippers across the world. We also see an increasing worldwide interest value on the search word "dropshipping" on Google Trend. In fact, it reaches a peak popularity of 100 in January 2023.

Meanwhile, numerous YouTube gurus are also sharing their dropshipping experiences and promoting the business model as one of the easiest ways to make money online. This further entices more people to try their luck in the industry.

2. Low barrier to entry

Another reason why dropshipping is getting more saturated is because it has a low barrier to entry. Dropshipping only requires minimal initial investment and overhead expenses, which makes it an attractive business model for beginners. According to an Adobe blog, people can easily "start a dropshipping business" when they "don't have the funds necessary to run a traditional retailing operation."

Moreover, anyone can easily copy what other dropshipping companies are doing. For example, a new dropshipper may sell the same products on their Shopify store, post similar Facebook ads, and even use the same suppliers. So unfortunately, the reason that drop shipping business is so easy & fast to start is also causing the business model to become saturated the quickest. 

3. Winning products are quickly tracked by competitors

Finding a winning product is an important factor of succeeding in dropshipping. However, it's only a matter of time before your competitors learn about it, too. For example, product research tools like EComHunt track successful campaigns in the dropshipping market.

Anyone can easily find top performing ecommerce products and what kind of FB ads they're running. Results will also display details about engagement, product cost, how much they're selling it and where you can find it online. This means you won't be the only one selling your unique product for too long.

4 Ways To Make Dropshipping Work Despite Product Saturation

1. Enhance your product page

In a survey conducted among 2,500 individuals, Stanford University reports that 46.1% of participants say that website design helps them determine a company's credibility. In dropshipping, you want to create an effective product page to gain sales. So use professional product images and write engaging product descriptions. Create urgency and highlight positive customer reviews.

AI can likewise play a fundamental role in your business. Tools like chatbots, AR/VR enhancements, and product recommendations can help with user engagement and expand your customer base.

2. Observe your competitors' marketing strategies

You and your competition are all selling viral products. Product saturation is inevitable in dropshipping, However, your marketing approach can make or break your business. So observe what other brands are doing and try to make yourself stand out from them. 

In a recent YouTube video, professional dropshipper Jacob Collins of Collins Ecom says that to succeed in dropshipping, "10% of the equation is setting up the fundamentals (establishing a Shopify store, finding the product, creating ads, etc). He also adds that "the other 90% of the equation is actually selling and marketing the product."

So learn from what others are doing. Check out what works and what doesn't, improve it, and use your creativity. Use both free (social media) and paid marketing tools (Google Ads, Facebook Ads, etc) to maximize your online presence. Analyzify notes that dropshipping stores with at least one social media account generate 32% higher revenue than those without.   

3. Offer competitive pricing

Buyers want to get the best deals for their money, so take time to research and find the most affordable product options out there. That way, you can offer competitive pricing compared with your competition. Experiment with things like creating bundles and offering customer loyalty discounts.

Undercutting competitor prices is a common practice in the dropshipping industry. Some dropshippers lower the sales price but try to make up for it by increasing the shipping cost, so see what works best for your business. Besides, a research shared by Symson tells us that 80% of consumers "compare pricing and offers of the same/similar product by other brands before buying."

4. Use third party service providers

Third party service providers can take your dropshipping game to the next level. For example, Viral Ecom Adz and DropshipMedia provide dropshippers with high-converting ad packages. Meanwhile, dropshippers can use AdSpy's "largest searchable database of Facebook and Instagram ads" to come up with the best ad strategies.

Through these tools, your dropshipping business can move dynamically and chase opportunities quickly despite product saturation.  

Does Product Saturation Exist in Dropshipping?

Yes, product saturation exists in dropshipping because most dropshippers are selling on the same platforms and are running similar social media ad campaigns. Potential profits heavily rely on selling trending products and the quantity of sales per month.

As an industry, ecommerce market revenue is expected to hit US$3,567.00 billion in 2024, according to Statista. Experts also anticipate that the compound annual growth rate will be at 8.95% from 2024 to 2028. 

Despite the growing market, product saturation can happen when too many dropshipping are selling the same items. Meanwhile, dropshipping cannot technically reach market saturation. This is because it's simply a method of marketing & delivering products to consumers. There's always room for new players, although this makes the market really challenging and competitive.

When others catch on to your trending dropshipping product & effective ad campaigns, some will start using the same selling and marketing strategies. This may eventually result to ad fatigue, which means your potential customer base may lose interest in your products after seeing too many similar ads online.  

It doesn't mean that the product doesn't have anymore buyers. However, it can get to a point where the product doesn't convert high enough for it to be profitable. This can directly affect your dropshipping revenue since you're mostly targeting impulsive purchases from social media sites.

That said, you need to stay ahead and take quick action before a trending item becomes a saturated product niche. Unfortunately, dropshipping isn't the most long-term, passive business because you constantly need to find and sell winning products that immediately grab people's attention.

Is Dropshipping Still Worth It in 2024?

Yes, dropshipping is still worth it in 2024. You can still make money with the business model, although it has become much harder. Dealing with product saturation is part of the game. Your goal as a dropshipper is to generate profit from products that go viral online. However, a winning product will not stay profitable for a long time. There's always so much competition tapping into the same audience with the same product. So once it reaches saturation and stops converting, you should immediately move on to find the next profitable niche.

Moreover, your business success also depends on attracting continuous traffic stream, working with a reliable supplier, and ensuring customer satisfaction. If you can meet these factors, you can look forward to making money despite the saturated market.

Conclusion: Why Local Lead Generation Is Better Than Dropshipping

While dropshipping is still a profitable online business, product saturation has made it challenging for dropshippers to continue earning over the years. 

According to Shopify, experts estimate that only 10% to 20% of dropshipping businesses succeed these days. To put this in perspective, you're going up against 12 to 24 million e-commerce sites worldwide. However, less than 1 million of those sites see more than $1000/year in sales. So while there are a lot of players, very few are making real money with their dropshipping business. 

I say this from experience because I ran several Shopify dropshipping businesses back in 2017. I sold shark onesies in one of my stores and made $45,000 in sales. Ultimately, I found out that local lead generation is a more profitable and sustainable business model. Besides, successful dropshipping businesses can be easily duplicated overnight and so you can expect tough competition within 2 to 3 months. This can negatively affect your potential revenue and profit margin. It's a different story when you're doing lead generation. 

With lead gen, you own digital assets that bring you closer to achieving passive income. All you have to do is to build keyword-based service business websites, rank them on search engines, offer them for rent to local business owners, and then collect your earnings per month. For example, I make $2,000/month from my Grand Rapids tree care website. Overall, I make $52,000 monthly from providing the same service to multiple businesses. Competition is also not as difficult as dropshipping because I'm targeting specific geographic locations. That way, I'm only competing for the same keyword with 5 to 10 local businesses.   

If you're serious about making money online in 2024, I can show you how you can establish your own lead generation business. I teach a course where we provide coaching for students of different levels. Our repeatable 3-step process can bring you $500 to $3,000 per month without having to sell physical products, run paid ads, or join affiliate marketing programs. Contact us and let's get you started in your lead gen journey.