Dropshipping is getting more and more popular as a business model in a recent couple of years for merchants. The graphic shows clearly the growth of the dropshipping industry. There is a drop in January caused by the virus outbreak, but we can see a rising afterward.
There is a saying that people seem not to purchase goods they need on Aliexpress, instead, they purchase the goods they want. It can be the reason that customers are willing to wait. As an entrepreneur, less investment in inventory and keeping more cash for advertising is a vital thing. Dropshipping business can be regarded as a low-cost, high-return business. Setting up an online store does not require a lot of investment, because you do not have to keep inventory, you do not have to deliver any products, and you do not have to hire a large number of employees. These are just a few of the advantages the dropshipping business has. we will look into them in a more detailed manner.
The Online Ecommerce Users From 2015-2020 And Future
The last two decades of eCommerce has prioritized convenience over price. Digital technology is bringing fundamental changes to traditional transaction models and making consumers more willing to pay the price over time. Some retailers are exploring ways to automatically restock merchandise using things like smart speakers and the Internet of Things. Although some people might think differently about online shopping because of concerns with fraud and receiving the wrong order, to be honest, it's not like carrying cash around is safer and if you want to order you can ask for a sample before ordering your product.
Major Regions Of Dropshipping Market
The global Dropshipping market is segmented into five major regions North America, Europe, APAC, MEA, and SAM. In 2019, APAC led the global Dropshipping market with more than 31.9% revenue share, followed by Europe and North America. APAC comprises a country, such as China, India, Japan, South Korea, and Australia. India and China are the fastest-growing e-commerce markets in APAC. With the rising Internet penetration, consumers in these countries are inclined toward online shopping, which, in turn, is transforming several areas of e-commerce in the region.
The global economy is anticipated to take the worst hit in 2020, which is likely to have an impact on 2021 as well. 53% of North American buyers said that the pandemic has changed the way they shop. The market was valued at US$ 162.44 billion in 2019 and is projected to reach US$ 591.77 billion by 2027; it is expected to grow at a CAGR (Compound Annual Growth Rate) of 18.3% from 2020 to 2027.
Increment of Online Shopping
The pandemic shifted consumer behavior profoundly. Here are some consumer trends spurred by the pandemic. In March and April, with brick-and-mortar stores closed, many consumers turned to online retailers to purchase essentials such as paper towels and hand sanitizer, which also led to an increase in purchases of office supplies. and electronic products. As many consumers choose not to go to the supermarket, orders from online grocery stores have also increased. According to data released in August by the US Census Bureau, consumer spending on e-commerce in the second quarter was $ 211.5 billion, up 31.8% from the previous quarter. By 2021, it is estimated that more than 2.14 billion people worldwide will purchase goods and services online, more than the 1.66 billion global digital shoppers in 2016.
What Then If The Pandemic Stops?
Will online shopping be doomed? Just like there is a need for product variety in the market because of different consumer tastes and habits, we habit, we also believe the same applies to different types of markets. If the traditional market is getting saturated why not have another option?
Pros & Cons Of Dropshipping
Dropshipping can be regarded as a good start for managing a passive income, which is a low-risk and flexible business model, it requires less time to manage compared to owning a brick-and-mortar store which does save you a lot of money and stress. Another thing is, once the stores go well, you can make good money from the online business.
1. Start Easily
You don’t need to be a business guru or a successful merchant to get started. You don’t even need any business experience! If you are willing to take some time to learn the basics, you can get started quickly and get the rest as you go along. Less capital is required. All of this means that you can start your business anytime. You can start getting everything up and running within a matter of hours.
That is one of the attractive benefits. You can get to be your own business and set your own rules. It’s by far one of the most flexible careers that anyone can pursue. You can run your dropshipping business anywhere with an internet connection. As long as you can communicate with suppliers and customers, you can run and manage your business.
3. Wide Selection
Since you don’t have to pre-purchase the items you sell, you can offer a variety of trending products or what dropshippers call "HOT products' ' to your potential customers. If suppliers stock an item, you can list it for sale on your online store at no additional cost.
4. Easy To Manage And Grow
Since it doesn’t require you to make any commitments, you can manage everything with little hassle. Once you’ve found suppliers for your dropshipping store, you’re mostly only responsible for your online storefront. As you grow up, your business model doesn’t have to change very much at all. On the contrary, you have to put more work into sales and marketing as you grow, and pay more attention to your customers and products.
There is an increment of micro-brands and the ease of setting up and maintaining e-commerce stores and today's market is filled with fierce competition and reduced customer loyalty. Customer behaviors show the demand and need for product variety in the market.
1. Low Profits Of Set Up
More importantly, you'll notice that profit is primarily dependent on traffic, so if you're building an eCommerce brand from scratch, it will take a long time to build your customer base.
Of course, since you don't have to manage or store inventory, the overhead costs are low, as is the return.
The money you invested has decreased, but you have decreased your investment. This means you have to do a lot of business to make ends meet, let alone turn a loss into a profit.
2. Competition Is High
There will always be overly optimistic entrepreneurs who only focus on the "low-overhead" part and ignore the clear evidence above.
Since the funds needed to start a direct selling business are very small, a lower barrier to entry means a lot of competition, and the most popular markets suffer more than other markets.
Basically, the bigger the company, the more it can reduce the markup to deliver the lowest price.
3. Search For Good Dropshipping Partners
In standard e-commerce, if customers complain about product quality, speed of execution, or return policy, they can solve the problem themselves.
In direct shipping, you are more or less at the mercy of the supplier, but you have not directly communicated with the customer.
The shipper is essentially trapped, hoping that the supplier will solve the problem while assuring the customer about things beyond their control.
In addition, as the delivery person goes back and forth between the customer and the supplier, there is also a delay in communication. If the response is slow, all communications will stop and troubleshooting will take longer.
4. Branding Isn’t An Easy Thing
Like a ghostwriter or a lyricist behind the scenes, the agency must understand that the credit for their work is given to others.
If a product you sell is great, your customers will primarily focus on that product's brand and completely forget the shopping experience. After all, this isn't the logo on the box. So you have to spend a lot of time promoting your brand and building a good brand reputation.
Choose The Best Services Providers
Wiio understands the pain point as a drop shipper. That’s the reason why Wiio is here to help.
First of all, you can find a very bargain price on the Wiio product section that is much cheaper than other dropshipping agents. Owing to this, we collaborate with many local suppliers and to get a better price for our clients. In the second place, Wiio is a trustworthy dropshipping platform that you can find our price unbeatable among some dropshipping platforms.
Dropshipping is great for merchants because it is not as demanding as the traditional business model. The merchant is mainly responsible for gaining customers, keeping in touch with customers, and choosing products in trends, meaning you will be an effective middleman. With dropshipping, you can build a business that’s sustainable in the long term right from your laptop or mobile. In terms of logistics, to provide stable and quick shipping, Wiio established long-term partnerships with more than 30 domestic suppliers, including well-known DHL, FedEx, CNE, UBI, Yuntu, Yanwen, and other well-known suppliers.
Our customers come from all over the world, especially America and the European customers are in the majority. Besides, we provide different modes of transportation for different types of customers.
Wiio does branding for you that we do product quality checks and repackage your product from the original one. In the meantime, we provide print-on-demand services that we can place a thank you card and promotion card in the parcel. Many customers feedback that this is a good idea for them to reconnect.
With Wiio you will get more profits and also build your brand image. Although the competition is high in dropshipping. Owners of e-commerce companies have an advantage over traditional retailers. Using Wiio dropshipping services can automate the business and make you focus on gaining traffic.
We have witnessed the revolutionary impact smartphones have on the buying and selling of goods through the internet with numerous mobile applications to make the experience easy and convenient for consumers. The rise of dropshipping came with the growth of the eCommerce trade of which we believe are potential markets and untapped markets awaiting us in the future. The world is gaining more and more access to technology and the internet and smartphone users are bound to grow in number which does avail a potential market for instance in places like Africa and other parts of Asia, who knows what this industry might grow into? All we know is there's a world full of possibilities and heights to reach.