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Is It Too Late To Start Dropshipping In 2022? (How To Succeed With New Methods)

May 10, 2022

It's not too late to start dropshipping in 2022 because the e-commerce market is growing, with the dropshipping market forecast to reach $196.78 billion in 2022. There are also more suppliers offering to dropship their products. And the attention that social media captures is only increasing. So there will always be an opportunity for dropshippers to advertise on these platforms and sell trendy physical products.

But dropshipping has gotten a lot more competitive than 3-4 years ago. However, most drop shippers are lazy and don't understand the business model. But in 2022, the market does require a strategy to be profitable.

You need to create impressive and professional-looking video ads. With a Shopify store and brand that resembles a real company. You also need to master the skills you need to become a marketing master. Where you can consistently publish scroll-stopping content. Copy that convinces people your product and brand are unique.

Is Dropshipping Still Profitable Or Is It A Saturated Market?

Dropshipping is a straightforward business model. But this simplicity is the biggest problem with the business model. You don't hold inventory, and you require very little upfront capital. However, because the barriers to entry are low, the result is a competitive landscape. 

But dropshipping's not a saturated market. You just need to be able to move into trends quickly. Create a better marketing trap than the competition. Scale your ads and stay one step ahead of the competition. Use research tools like Dropship Spy and Sell The Trend to spy on your competitors and analyze:

  • What are your competitors selling?

  • What price points do they offer?

  • How are their ratings?

  • How many reviews do they have? 

Even if you can carve out a sliver of the e-commerce pie, you can succeed with dropshipping. But you need to recognize that this business model takes time. It requires trial and error. Research, and testing multiple products to find a winner. You're looking for trending products with virality potential. You need to move quickly and maximize your profit potential. Know when to shut down your ads and look for your next hot-ticket product.

Dropshipping is super repeatable. What's challenging is figuring out the winning formula for your business. The key is to start with a good product in an evergreen niche (like the baby or fitness market). Target products that have a WOW factor or fill a gap in the market. Check out platforms like TikTok Made Me Buy It. Or software like Ecomhunt and FindNiche to find the best dropshipping products to sell.

Here's an article where we list all the dropshipping niches to avoid.

Is The Dropshipping Market Flooded To The Point Where It's No Longer Worth Getting Into?

Dropshipping has challenges, and there are a lot of players in the game. But the market's not flooded. You just need to be better than the competition at selling the right product. Dropshipping takes time and daily grind to be profitable. So if you want to succeed you need to learn the fundamentals and treat this like a real business.

Start by building a legitimate-looking brand with a user-friendly and easy-to-consume website. Stop using spammy sales features and clunky themes. They were popular in 2018, but they're not cutting it in 2022. Instead, use a modern and aesthetic theme (like Dawn on Shopify-plus it's free).

Your Website Should Include:

  • A focused home page that is super simple with minimal information.

  • Create a profitable product page. The star of your show should be your product page and needs:

    • Customized and unique product descriptions.
    • Emphasis on what the product does. 
    • Have high-quality images
    • Include a headline to grab your customers' attention and explain your product's unique selling points.
    • Use GIFs and break your product page by using headlines. 
    • Explain how your product works and include instructions.
  • Customer reviews to boost your conversion rates (organic and believable).

  • Easy to read and understand. Without extra information and unnecessary details.

This store Warmly Decor does $1 million in sales per month, take a look at this homepage and notice how clean it looks and the use of great looking photos

You also need to know how to run profitable Facebook and video ads. Tap into customer psychology to create ads that stop mindless scrolling. People buy with emotion so you need to trigger a response that will result in a purchase.

Use a compelling hook that dives deep into their pain point and highlights how your product can solve their problem.

Pro Tip: Go to Amazon and find your product. Read comments and reviews. Use this information to create your marketing angles.

Amazon Reviews


What Causes Product Saturation In Dropshipping?

The same research software that lets you spy on your competition can also tell you what the newest hot-selling product is in dropshipping. Software or a dropshipping app like EcommHunt and SaleSource identify the most popular, in-demand, and right items to sell in your online store.

Trending product ideas that are almost guaranteed to sell well. But the issue with this is that thousands of people subscribe to these tools. So, thousands of people get notifications around a potential dropshipping product that's selling now and run with it. 

Depending on the dropshipping niche, most run to Facebook and set up multiple campaigns to capitalize on the trend before it fizzles out. Then, all the competition needs to do is find a high converting ad. Copy what's working, list it at a lower price and offer faster shipping. So it's up to you to find dropshipping products that will sell before the competition floods the market. Or come up with a marketing angle that will make your dropshipping store stand out and be different from the competition.

How To Find The Best Products To Sell On Your Dropshipping Store:

Use tools like Google Trends to gauge the best time to start selling (before products become saturated). You can also use tools like Dropship Rabbit to simplify product research. Find winning items across multiple platforms like TikTok Made Me Buy It and Google Keyword Planner. Determine if there's a market or niche for products you're thinking about selling and access:

  • Is there a community around this niche or product? 
  • Do they have a following of passionate consumers? (example: pet niche and dog owners).
  • What is the sales volume? Conversions? 
  • Seasonal or evergreen?

Research your competitors' sites and search their collections to find best-selling items. Look at their top-selling products and take advantage of what's already selling the best. Consider showing these products on the top of your collections. Or spending more ad budget on these items because you already know they sell.

Additional competitor research should include:

  • Order their product.

  • Read their socials.

  • What do their customers say?

  • What makes them unique?

The goal is to make the most money in the shortest amount of time. Before the trend dies out and people are no longer interested in buying it. Find products with high conversion rates and low customer acquisition costs to minimize expenses and maximize your profit margins with techniques like: 

  • Build a legitimate-looking e-commerce store.
  • Secure reliable suppliers.
  • Modify your offer.
  • Be on-point with your advertising strategy. Test campaigns using tools like Freshmarketer or Optimizely.

What Are The Biggest Problems That Drop Shippers Face In 2022?

New challenges are emerging in dropshipping. This means that a lot of the old methods don’t work. But the biggest problems dropshippers face in 2022 are things like:

increasing facebook ad cost

Facebook & An Increased CAC:

Paid advertising is the fastest way to broaden your reach and get traffic coming to your dropshipping store. The number one choice for dropshipping is Facebook. But these ads come with a price tag and the average customer acquisition cost (CAC) is around $10.

Factors that impact ad spend include:

Timing & Bidding Strategy

Placement & Relevance Metrics

Target Audience

Facebook is run on an auction-style platform. So the more engagement (likes, comments, shares) your ads get, the lower your advertising costs will be. But you need to be aware of their compliance policies or risk your account being banned.

You also run the risk of Facebook ads being banned for things like:

Violating community guidelines.

Negative reviews and poor customer experiences.

Questionable profile.

But Facebook isn't your only advertising option. Test multiple platforms like YouTube and Instagram ads or creating videos on TikTok. Or even google ads and 9GAG. This will build your social proof and diversify your paid traffic. Find out where your target market hangs out. This is where you need to focus your advertising efforts. You also need to create a clear offer and meet objections head-on. We have a list of 11 effective ways to advertise your dropshipping store.

Use retargeting systems with software like AdRoll or MailChimp to increase your sales volume with discounts or special promo deals. SMS and email messaging are also one of the best ways to build engagement and consumer trust.

“Retargeting is the key to re-engaging the 98% of potential customers you lose after their first visit to your website”. Rebrandly
china shipping

Shipping & Why You Need Local Suppliers:

Competing with free and fast shipping times from Amazon is another challenge for drop shippers. Sourcing inventory from China with 4-6 weeks shipping doesn't work anymore and 63% of consumers expect a standard delivery to arrive within three days. But there are ways to expedite the process like:

How To Secure Faster Shipping As A Dropshipper:

  • Pay for express shipping from China which takes 1-5 days and costs $5-$9/2 lbs.

  • Secure a reliable dropshipping supplier in the country you are selling or live.

    (Use sites like AliExpress or Oberlo to filter wholesalers located in the USA. Or where you plan on shipping your inventory). You can check out our list of US dropshipping suppliers.

  • Look for VIP suppliers on AliExpress or Alibaba and order a sample product to see how long it takes to ship.

  • Use supplier platforms like CJ Dropshipping or Spocket.

  • Use Google search engine to look up images or keywords of items you want to sell. Determine if wholesalers or a supplier offer the option to dropship or are open to negotiation.

Supply Chain & Logistical Issues:

There's also the ongoing situation around breakdowns in the supply chain. Or limited inventory that could affect the profitability of your dropshipping store. So dropshippers need to secure more than one supplier and vet each potential wholesaler thoroughly:

  • Do they have enough demand for their inventory? 
  • Too much demand? 
  • Is there a minimum order requirement for shipping products?

Software like Shipedge and Multiorders can help track inventory and supply issues. But your best line of defense is to have consistent communication. Take the time to build a trusting relationship with your supplier(s).

Dropshipping is a way to set up an ecommerce store without needing inventory. But as a dropshipper you should never leave the supply or order fulfillment component of your dropshipping business to chance.

3 Reasons Why It’s Not Too Late To Start Dropshipping:

There has been a massive shift in the market, but it's not too late to start dropshipping. Online shopping has exploded and only continues to expand. With retail ecommerce revenues heading for values of $5.4 trillion by the end of 2022. This growth has propelled new niche and sub-niche opportunities. Other factors to support that it's not too late to build a dropshipping business include:

More Marketing Alternatives:

  • Facebook has been replaced by TikTok as the best advertising platform to acquire sales for your dropshipping business.

  • TikTok's algorithm makes it so easy to have a video go viral and get advertising for free. Instead of paying for Facebook ads or Instagram influencers.

  • You can also use traditional sales channels including email marketing, SMS marketing, and messenger apps with tools like JookSMS and Text Magic.

The Availability Of Local Suppliers:

Use sites like Wayfair or Walmart to look for a product you want to sell. Determine who their supplier is and contact them directly. Find out if they are open to negotiating dropshipping or will allow you to sell their inventory in your store.

Or  connect with supplier directories like Salehoo and World Wide Brands that easily integrate with your Shopify store and offer a ton of options for USA-based wholesalers.

3 Reasons To Believe It’s Too Late To Start Dropshipping:

The low barrier to entry is a drawing card for many people looking to start an online business. But the dropshipping model isn't as easy as some of the gurus would like you to believe. Here's why:

Super Competitive:

Shopify has over 700,000 sites. And an estimated 75% of those are dropshipping stores.

Thousands of people are conducting product research and connecting with suppliers on AliExpress. Or utilizing sites like Importify and Oberlo.

If you can't differentiate from the competition. Even if you find a winning product. It will be a challenge to compete in the market & stay profitable long-term.

Low Conversion Rates:

The goal is to secure 50% conversion rates. But most drop shippers are lucky if they hit 1%. (So for every 100 people you pay through advertising to come to your site. Only 1 person is buying your product).

Several factors result in low conversion rates for dropshippers, including:

Shipping times: 3-4 weeks to ship items from China.
Poor customer service or overall experience.
Lack of trust and negative reviews.
Poor quality aesthetics of the site

Nominal Profit Margins:

As the competition grows, your profit margins get smaller. 

Need to spend more money on advertising to secure a steady traffic volume to your site.

You might also need to reduce prices or offer discounts to maintain your sales volume.

Spend additional money to cover costs for faster shipping times.

Is Dropshipping Worth It in 2022?

Is dropshipping still profitable? Yes-100%. As an industry, it's thriving and continues to grow. But you need to be willing to put in the work. Be prepared to plan, test, and implement new methods. Invest the time in market research. Source products that meet a real demand or fill a gap. Solve problems and appreciate that dropshipping isn't about making a quick buck.

Make your online store sustainable by creating a user-friendly website and superior shopping experience for your customer. Sell quality products with fast shipping times. Establish social proof and stay one step ahead of the trends and you will see success with dropshipping in 2022.

How Do You Make Your Dropshipping Store Profitable In 2022?

Spend time on growing your business, pivot with trends, and stay ahead of new techniques and issues like:

Supply Chain & Inventory Shortages:

  • Sell for enough suppliers and have enough choices to offer your customers.

    Pro Tip: Aim to connect with 20 suppliers per niche store to help negate issues with the supply chain or lack of stock. 

The Economic Landscape:

Inflation rates are skyrocketing, and this will directly impact the retail industry. Costs are increasing for materials, and as a result, wholesaler costs will go up. You need to sell for the minimum advertised price (these will go up too).

Profit margins might stay the same, but it will depend on:

  • Wholesalers using pricing controls (MAP policies) and raising prices accordingly.

    • But if other dropshippers don't raise their prices, your profit margins will get squeezed.

    • Or your sales volume will go down because consumers can't afford to buy.

Advertising On Social Media: 

  • Start diversifying and stop relying solely on Facebook and use sites like Google ads, TikTok, etc.

  • Test campaigns and be aware of what’s going on. Then, make changes ahead of the curve to keep your dropshipping store profitable.

Conclusion:

It's not too late to start dropshipping, and you can still be profitable with this business model. But old methods aren't good enough. You need to provide your customer with the best online shopping experience possible. Consistently land trending products, and create an effective marketing strategy that's better than the competition. Master the skill of creating beautiful looking stores. Establish social proof and outplay the competition. Differentiate your business and you will be successful with dropshipping in 2022.

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