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In the Face of Uncertainty: Is Dropshipping a Viable Business Model in 2020?


In the Face of Uncertainty: Is Dropshipping a Viable Business Model in 2020?

If all successful e-commerce entrepreneurs have one thing in common, they can satisfy their customers.

After all, repeat customers are critical to the success of any business. Unfortunately, until a few years ago, e-commerce entrepreneurs thought that the supply of customers was nearly endless, and what few were lost due to neglect would eventually be replaced by others. It didn’t take long for the lack of good customer service caused many businesses to falter.

If e-commerce-; both the good and the bad-; had one thing in common, it’s dropshipping, a business model that many had considered to be dead, but has recently enjoyed a resurgence due to new websites that have made it an easy way to do business, not to mention to provide better customer service.

The good news in all of this is that there are those in the business of making the dropshipping work for e-commerce businesses.

These include, most notably, Sharp Commerce and others.

What is Dropshipping, and How Does It Work?

There are several viable dropshipping methods, but its most basic form consists of a business that sells its products but does not have physical possession. Instead, as the company takes orders, those orders are communicated to another firm, whether it be a manufacturer, a wholesaler, or another retailer, who then ships the product to the customer.

There are several reasons for using this form of business. Among these are liability, not having to deal with physical inventory and ease of doing business.

Does Dropshipping Work?

There was a time when the dropshipping method of doing business worked for many different types of companies.

Unfortunately, with as many advantages as there are to doing business in this manner, several downsides emerged that slowed the pace of using dropshipping as a method of doing business.

These included:

1. Low product quality

2. Refunds took too long

3. Unprofessionalism of sellers and drop shippers

4. Lack of customer support or inefficient customer support

5. And more

Make no mistake about it, dropshipping as a business model can work. As a result, it can be worth the money to use it, but it must be done right. This is where selecting not only the right drop shipper but the right dropshipping consultant can make the difference between success and failure.

Anyone who is focused solely on making a lot of money quickly is not worth it. On the other hand, anyone who wants to build a profitable business with a focus on excellent customer service would is well served by using dropshipping.

Anyone who expects to use dropshipping should expect to invest money, time, and effort.

Is Dropshipping as a Business Model Dead in 2020?

It’s hard to listen for long to a discussion about business models without hearing someone chime in that dropshipping is dead.

Fortunate for many successful e-commerce entrepreneurs, this is not the case. Instead of dying, the dropshipping model of business is thriving, especially among those who have changed their focus from just making a lot of money quickly, to making money with excellent customer service. This approach not only promises the delivery of a quality product but on customer satisfaction that brings return business.

Why Should a Business Embrace Dropshipping?

There are five primary reasons why a business should adopt drop shipping as a model:

The world of e-commerce is thriving. Experts agree that e-commerce is thriving. It is projected that e-commerce will encompass more than 16 percent of retail sales by 2023, an increase of more than 10 percent over 2018.

People are buying online more than ever before.

In only the past few decades, online shopping has gone from being virtually nonexistent to being a multi-billion dollar a year industry. Buying online has become commonplace for millions of people around the world.

There is a growing awareness of the benefits of dropshipping on the part of merchants. Whether a merchant works in a brick and mortar store or online, more sellers are finding out about dropshipping as a model for doing business and how it can help them become more successful.

Upfront costs are very small or nonexistent.

Products remain with the manufacturer or are moved to a warehouse where they shipped. Costs only begin after sales are made.

Making payments online is easy. Until work starts, no money changes hands, and when it does, funds are transferred electronically.

How to Be a Dropshipper Who Thrives

Becoming a drop shipper that thrives depends almost exclusively on the approach used by the entrepreneur. Whether that entrepreneur works online or from a brick and mortar store, to be successful, the focus must be on good customer service since this is the only way that has been proven to bring in repeat customers.

The seller who ignores providing excellent customer service does so at the detriment of their business since an unsatisfied customer will not return.

When a seller can take the focus of their business away from shipping their products and place it on providing excellent customer service, a business will thrive.

Can Dropshipping Be Profitable in 2020?

Dropshipping can not only be profitable to the entrepreneur who employs the method but can also help them thrive. Mainly due to the success of e-commerce, dropshipping has grown by more than seven percent over each of the last several decades until it has surpassed more than $4 billion in profits.

The profitability of dropshipping is superior even when compared to other business methods, including affiliate marketing.

This is so since affiliate marketers only take a small commission from each of their sales as compared with drop shippers who retain more of their profits while paying a commission to those who move their products for them.

Simply put, dropshipping is thriving, but for 2020 and for the foreseeable future, it will continue to grow at an astonishing pace. Dropshipping is enormously profitable for virtually anyone who chooses to use it as a business model and uses it to focus on the most important part of the equation, excellent customer service.  For this, there is no substitute.

I am the founder of Startup Today. I am the main writer and have put in many hours of work into creating this blog. If you want to find out more about me then lets get in contact.

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