Is Dropshipping a too Saturated Business Model?

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Dropshipping success stories are all over the internet, and you may have even come across some yourself. These stories may have inspired you to open an ecommerce store of your own.

You might also be asking yourself: Is dropshipping saturated?

Dropshipping is a business that can be described as low-risk and low-capital, but it still requires effort and time to start. No matter how low the risk, there is still risk.

This article will answer that question and provide other useful information to help you make a big life decision.

You can explore the possibility of this business opportunity by reading on.

Let’s get started.

Dropshipping is it a saturated industry?

Dropshipping isn’t saturated, that’s the quick answer. To fully understand why dropshipping isn’t saturated, let us first define the meaning of “saturate”.

According to the Cambridge Dictionary, “saturate” means “to completely fill something or place so that nothing can be added”.

Let’s use this to mean, let’s see if there is still something to be done in the dropshipping market.

The global dropshipping market was valued in 2020 at $128 billion. It’s still expected to reach $200 Billion in 2026 with an estimated growth rate of 51%.

These numbers clearly show that the market will only grow over the next few years.

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The market value is a measure of the market’s size. These values can be used loosely to deduce that thousands of dropshipping companies all around the globe contribute to this market value.

Do you think this means that there is no room for dropshipping new products or businesses?

Absolutely not.

These numbers only reflect the market size at present. These numbers don’t mean that you can’t enter this expanding market.

Your current competition won’t be a determining factor in the success of your new business, if you choose to open one. It’s all about how you stand out.

So where did the idea of dropshipping becoming saturated?

People often believe that the term “saturated” refers to the fact that there are too many online shops selling the same product.

This doesn’t mean that these stores will not succeed. Sometimes they have different strategies and target markets for the same or similar products.

Dropshippers targeting popular niches has been a mistake for the past few years. They don’t have good marketing strategies.

It is possible to succeed in these niches. However, it is not impossible.

A niche that is well-known doesn’t necessarily make it saturated. There are many products you can offer and many ways to draw customers.

It’s not difficult to find the right techniques and maybe even have some luck.

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Is Dropshipping Still Profitable?

Yes, by all means! Dropshipping continues to be profitable even in 2021. Do not be intimidated by the sheer number of people who want to start their own business.

As long as you have a plan and understand the basics, you are good to go.

Remember that dropshipping is a business like any other. It takes time and effort so take your time. Listen to the best practices and do your research. This is not a quick-fix business model. Don’t expect to make millions right away.

8 Reasons Why Dropshipping is Still a Good Idea

It is understandable that there are still doubts. We’ll be addressing all the reasons why you should dropship as soon as possible.

It is important to start now. The earlier you start, the better.

Here are the top reasons to dropship in 2021.

Ecommerce customers are increasing

It’s clear that the pandemic has had an impact on ecommerce.

Online transactions increased as people stayed in their homes. To find out how the pandemic affected customers’ shopping habits, a survey was conducted.

The results showed that over half of the 3,700 respondents shop online.

UN Trade and UNCTAD’s development experts have also stated that a rise in share from 16% to 19% of all retail sales in 2020 was expected.

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This could be due to physical stores closing down after the initial months of lockdowns. People ordered groceries online and other essential items online.

Customers spent more than $790 billion in 2020 with US stores.

Dropshipping will be a lucrative business model as more people are inclined to shop online.

Dropshipping knowledge available for free

Dropshipping is a practice that has existed for many years. This has led to an enormous amount of dropshipping knowledge.

Pioneers have had many ups and downs. Some of them are willing to share their experiences with the rest of us. For newbies, it can be useful to read through their worst and best practices.

These pieces of information are invaluable. These pieces of information will help you know what to avoid and where to begin. You can search for your questions on Google if you feel lost.

Many dropshippers offer courses to help you along the way. It’s an excellent option if your goal is to be more confident that you are doing the right thing.

Better tools for Ecommerce businesses

Technology advancements have opened the door to better ecommerce tools.

Ecommerce website builders such as Wix or Shopify today make it simple for dropshippers to launch their online shops. These builders already provide solutions for common issues like POS, shipping and website design.

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There are tons of markets available for your business. You don’t need to worry about your products not being advertised via Google Ads or email campaigns.

There are many product options

Dropshippers can sell many different products. Dropshipping offers many product options, which is why it’s a good idea.

There are many niches that you can explore, so there is no limit to the type of products and products you can make. Explore all niches to find the best fit for your market. This can be a benefit if you don’t see certain products in your area.

You can sell any product if you are able to properly package your online shop.

Zero Storage Costs

Dropshipping has a number of advantages.

You don’t need to locate a warehouse or storage facility for your products.

Simply upload the images of products that you are selling on your website and orders will be automatically shipped to your customers.

Dropshippers have the freedom to add as many products they want without worrying about whether or not the products will go to waste. Dropshippers can also explore new niches because of this.

Flexible office locations

We’re not suggesting dropshippers should have an office like wall street businesses. Dropshippers can run their business from anywhere in the world, provided they have an internet connection.

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Everything is virtual, so you can choose where to manage your business.

This allows you to target customers from different countries or regions.

This doesn’t mean you have to limit your options to just your local area or country. There is one catch: you must ensure that third-party logistics are available to handle your shipping needs. In most cases, this will not be a problem.

Start-up costs are low

Dropshipping is a popular option for people who want to start their own business. It has low startup costs in comparison to other businesses.

We have already said that you don’t need a warehouse to store your products, which can save you lots of money.

You can also save money on inventory purchases

Even if your website is live, you don’t need to purchase products. Trustworthy suppliers and third-party logistics are all you need.

Highly Scalable

These are just a few of the many reasons that contribute to our final reason for scaling: Scalability.

Dropshipping’s business model is simple to scale. You don’t need to worry about increasing your costs if you add new products or increase sales volume.

To increase your sales volume, you need to verify with your supplier whether they are able to handle additional orders. You’re good to go.

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You might consider hiring employees to manage customer service and maintain the website. This management decision is voluntary, so the additional expense is also optional.

Is it possible to dropship a saturated product?

We’ve already covered the definition of saturated. The answer to your question is yes. Dropshipping a saturated or popular product is possible.

Dropshipping this product type is not easy. You will be competing with many sellers. This might be too much for some. Others may see it as a chance.

Possibly you are wondering why? Let’s discuss.

Many things are indicated by popular products:

  • It has been tested and proven in the market
  • High Demand
  • Complementary Products in High Demand

It has been tested and proven in the market

It is clear that the most popular products are in high demand. These types of products are easy to sell and can be tested by anyone who is interested.

Now, your efforts will be directed to creating and planning marketing campaigns that increase your market share.

This can be difficult. It’s part of the learning process, especially if it’s for the long-term.

High Demand

Popular products indicate high demand regardless of whether they are an evergreen or trending product.

These products have the advantage that you can be sure that people will purchase them. However, you can’t predict if these people will purchase your products.

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This gap analysis presents you with the opportunity to create sales and marketing strategies that will attract your target market to purchase from you.

These could include free shipping, discounts or coupons, better customer care, and so on. As long as you don’t lose money, you can be creative.

You can also check to see if the products are available in certain areas. There may be many buyers in a particular region but no direct seller of a popular product.

Learn how to dropship within the region and build a loyal customer base.

Complementary Products in High Demand

Complementary products simply refer to products that are added value to another product, service, or product. These are products that customers can use together.

One simple example is buying toothpaste to go with your toothbrush.

It is possible to sell complementary products by understanding what popular products are. Selling popular products is not enough.

You can also add complementary products to increase your customer’s value if you are inclined to sell popular products.

This route can be very profitable if you are able to identify the best complementary products and how to get customers to buy them.

How to stand out in a saturated niche?

You might have already decided to enter a popular or saturated niche. This is a difficult business move but not impossible.

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Instead of worrying about whether you won’t make it, let us focus on how to stand out in saturated niches.

These are the best practices to consider when developing your penetration strategy.

Establish A Memorable Branding

You need to make your customers remember you more than just having a beautiful website. Customers should remember you when they need a product or service.

Also, create memorable branding.

Your branding will set you apart from your competitors and make you stand out among them.

Branding is the collective image and impression that you create for your customers. Your branding must be clear and comprehensive, from customer service to packaging.

This will add more value to your company. Take your time to develop a brand that will last. Consistency is important. Therefore, align your resources to create a branding strategy that will outlast trends and time.

Next, we will discuss another aspect of branding that you should focus on.

Provide Excellent Customer Service

Your branding should also include exceptional customer service. A business that truly cares about its customers is unbeatable.

This aspect of your business should not be neglected, regardless of whether you are a solo entrepreneur or a team with dedicated customer service representatives.

A page should be created where customers can ask questions or read FAQs about your product. When someone sends you an inquiry, respond as quickly as possible.

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Although it may take more effort than you expected, consider this an investment. Businesses that respond to customers’ questions and make them feel heard are appreciated by customers.

In fact, 67% customers will pay more for better customer service. This will allow you to retain customers, which will help increase your profits.

Invest in customer service to increase loyalty and build trust with your customers. This goes hand-in-hand, however, with great products or services.

Invest in Online Presence

Ecommerce businesses must have customers. If you don’t have enough visitors to your website, even if you have a great website, customer service and all that good stuff, it won’t matter.

When you invest in your online presence, make sure to be visible on social media. Also, consider SEO.

Visible on Social Media

Although you will probably spend some money to establish your social media presence, it is a worthwhile investment.

One of the best ways to drive traffic is to help people find your business. Visibility almost always leads to more traffic, whether it’s via Facebook ads or TikTok Advertises.

This requires you to have a landing page that customers can view your product or services.

Looking Into SEO

SEO is a great way to get on Google’s first page. It’s also known as the gift that keeps giving.

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SEO or search engine optimization is the process of improving your visibility and ranking for people searching you up in search engines such as Google.

Why? Because most people don’t visit the second page of Google. They tend to click only on what appears on the first page. Being on the second page can be bad for business.

A blog is a great way to create content that’s relevant to your product. Customers will appreciate the more useful content you provide.

Optimizing your website is essential to ensure that customers can find you and your products easily on search engines.

Search engines such as Google are known to change their guidelines frequently so make sure you’re up to date. Be on the lookout for trends to ensure you don’t get left behind.

Benchmark from Successful Dropshippers

Dropshippers who are successful have a reason. You need to discover what that reason is.

This can be done by analysing their website and observing what they are doing well. Also, you will get a better understanding of where their efforts are going.

Dropshipping courses run by dropshippers are a great way to learn from the best. This will be a benchmark once you have figured out why.

However, benchmarking is not the same as copying.

You benchmark your business by analyzing the solution or main action and adapting it to your company, taking into account the differences between yours and theirs.

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Copying is simply copying what others do. It doesn’t matter if it applies to you or not.

Study successful businesses to see what works.

Learn more about Marketing Strategies

There is no single marketing strategy that works for everyone. It’s possible that what works for one person might not work for another. That’s fine. This doesn’t mean you have to force fit this type of thing.

This shouldn’t stop you from exploring other marketing strategies.

You don’t have to stick with one type of social media or advertising platform. Broaden your search and discover what is out there.

This is similar to product testing. It can be frustrating if you are new to marketing. Keep going and you will eventually see the results of your efforts.

If you feel they are capable of doing the job better, you can hire your own marketing expert.

No matter what, you should prioritize the development of effective marketing strategies to support branding and online presence. Effective marketing strategies will help you stand out.

Reward customer loyalty

After you have established your store, and gained steady customers, reward loyal customers. Customers say loyalty programs encourage them patronizing a business.

These loyal customers also tend to spend 66% more on businesses that they are loyal to. These customers will guarantee you sales.

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Let’s use Starbucks as an example.

Starbucks offers a great loyalty program that gives customers points for every dollar they spend. If you accumulate enough points, you can receive refills and free drinks.

This is a great deal for customers who want to maximize their spending.

At first, there will be some hesitation as these rewards appear to come for nothing. However, if you consider the number of customer returns, your profits will eventually offset these expenses.

Design a loyalty program that is memorable. Reward customers who return to your store.

It’s possible to be amazed at how many customers your company also gains, as these people tend to recommend their favorite companies family and friends.

Closing Thoughts

Dropshipping is a popular niche that’s saturated and not profitable. We’ve shown that even though there are many popular products, it’s not too late to join that niche.

You should remember that dropshipping is a time-consuming business that requires dedication and hard work, regardless of whether you are targeting a niche that is popular.

It is not possible to build a business that is successful overnight. Neither can you stand out from your competition. It will take planning, patience, and a lot of planning.

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