Marta Kosmider

Whether you’re just starting your journey with dropshipping or have been in business for a while now, you may be wondering if it’s still a profitable model in 2022. As life is gradually getting back to normal for many of us and the ecommerce boom has slowed, there are rumblings that making money online isn’t such a hot topic anymore. Some may even feel like the dropshipping industry is dead! We’re here to tell you that it’s definitely not, and the data supports this. So if you’re wondering what the market currently looks like and how to make a profit from dropshipping, you’re in the right place. What is dropshipping? A quick recap. Dropshipping is considered to be one of the most convenient, easy, and low-risk online retail models out there. Why is that? It all comes down to managing your own inventory. In traditional retail stores, inventory is kept by the retailer. In the dropshipping business model, however, it’s stored and managed by a third-party supplier. In simpler terms, dropshipping is a way of selling items without having to keep stock on hand. You sell products in your online store, and when a customer places an order, your supplier receives the order and ships it out to the customer. If you’re managing everything yourself, it can get expensive and risky quite fast. You need to pay close attention to your stock and make sure you’re ordering the right amounts. If something doesn’t sell, you’re left with too much inventory and lost investment. With dropshipping, you don’t face that risk at all. You—the seller—don’t handle the inventory. A dropshipping supplier manages the storage, packing, and shipping of all your products directly to your customers. The best part? The customer never knows someone else was involved in the process! Have a quick look at this infographic to understand how the dropshipping business model works: Source: Printful For a more detailed guide, check out our Ultimate Dropshipping Guide. And if your interest is piqued, here are some more in-depth articles that explain the specifics of opening a dropshipping store, setting up the business, and all technicalities that come with it: Dropshipping Sales Tax for beginners 5 Reasons Large Companies are Using Dropshipping to Scale Their Business How to Expand Your Business with Print-on-Demand Products Start dropshipping with Printful! Get started now! Why did it become so popular during the pandemic? Dropshipping was starting to gain traction before the pandemic, but during the lockdown, its popularity skyrocketed. Because many people lost their jobs when companies, shops, and restaurants closed down, the situation forced many of us to think about other ways of making a living. This was made even more complicated by the fact that we were all stuck inside. People started researching different ways to make money from home and dropshipping quickly became a top contender since it requires little to no starting investment. What’s more, you don’t need a lot of knowledge about running a business to get started—a good dropshipping supplier will not only offer a wide range of products, but also various support services that’ll help you run your business stress-free. For example, here at Printful, we help business owners set up their store with Store Setup Services, design your branding with Design Services, organize photoshoots or videos to promote your new launches, and even offer customer support for your clients. That way you don’t have to worry about responding to emails and inquiries and can just focus on building your brand. Plus, we have integrations with all the best ecommerce platforms, like Shopify, Etsy, and WooCommerce, so you can manage everything from just one account. Printful allows you to run your store without having to jump between different websites or keep up with complex processes. Manage your orders, add products, handle design elements, oversee customer service, and take care of all the other important parts of your business from your Printful account. Still not convinced as to why dropshipping became so popular? Keep reading. Advantages of the dropshipping model in a nutshell. We’ll break it down for you even further. Here are the major benefits of dropshipping: You don’t need to spend money on inventory until the customer places an order You won’t get stuck with unsold items because orders are handled on-demand by your supplier. Operational costs are low since you’re relying on a third-party supplier who handles the logistics. You can easily integrate your dropshipping service to popular ecommerce platforms (depending on the supplier you use) You can choose from variety of unique white label products that are customizable (depending on the supplier you use) The only thing you have to focus on are the interesting bits of your business, like marketing, creating designs, and building your brand But how can we be so sure that dropshipping is still worth it in 2022? Let’s have a look at some of the data. The dropshipping market in 2022. As many are going back to work and shops are opening again, the surge of buying online and the idea of making money from home seems to have lost some popularity. So even though it’s clearly easy to do and low-risk, is dropshipping still worth it in 2022? Let’s dive in a bit deeper. Have a look at the data on the growth of the dropshipping market and its popularity. Growth rate and projections. In 2020, the dropshipping market was worth over $128 billion, according to Market Data Forecast. But what about in 2022? The compound annual growth rate for dropshipping is estimated to be 32% from 2021 to 2026. Another report from Grand View Research offers similar figures, indicating that dropshipping will be steadily growing at a rate of 28.8% through 2025. This means that by 2025 the dropshipping market will reach $557.9 billion! Source: Grand View Research As you can see on the graph above, the dropshipping market share has been growing at a steady rate since 2015, and it is nowhere near slowing down. In fact, the world of ecommerce, in general, has been flourishing for years, with profits reaching $4 billion in 2021—a 7% year to year increase over the last 10 years. In 2020 there were 2.05 billion online buyers, whilst in 2021 the number grew to 2.14 billion. These statistics show that dropshipping (and ecommerce in general) has continued to grow even as lockdowns were lifted and life began to return to normal for many of us. But it’s not just about market growth, there’s also continued interest from online users on the topic. Let’s have a look at some Google Trends data: Source: Google Trends As you can see, the general trend for the word “dropshipping” is upward. Meaning, consumers are consistently searching for the term, most likely to learn more about it. Source: Google Trends This is also the case with related phrases like “Shopify dropshipping” or “Amazon dropshipping.” This makes sense when you think about the fact that over 50% of Amazon sales are from third-party suppliers who use models like dropshipping. Or, that the Shopify platform has gotten super popular among retailers who use the dropshipping model. What does this all mean? The dropshipping market is still growing, and the term continues to generate a lot of interest from online consumers. It’s pretty clear that starting a dropshipping business in 2022 is still a great idea. Possible downsides to dropshipping. Even though the market is thriving and consumer interest is there, dropshippers still face certain challenges. But don’t fret, with the right information and strategy, any roadblocks can easily be overcome. Let’s go through some of the most common issues and how to solve them. Is there too much competition? The short answer to that question would be: no, definitely not. As the data shows, the ecommerce market is continuously growing, so more and more retailers will be needed to meet that demand. But there’s still the matter of standing out from the competition. All you need is to choose the right niche for your business and then do some solid research. Learn about the best products in your niche and a potential audience for those products, but also your competitors. You can use tools like SpyFu, that will show you your competitors’ most valuable keywords, BuzzSumo, which tracks the best performing social media content, or Se Ranking, which will show you your competitors’ most valuable keywords. Are all the best niches already taken? That’s the next logical concern. You need to choose a niche, but what if all of the “good” ones are already saturated? Don’t worry, new niches are emerging every day due to changes in demand. In the online universe, innovative ideas are always cropping up, and anything can create the latest product niche—new social media trends, a TikTok video, or an influencer talking about something cool. If you spot a movement happening online, jump on it, and be one of the first to offer new, relevant products. There are various platforms that will help you stay in the loop, like Trend Watching, Trend Hunter, Cool Material, and of course, Google Trends. You can also use Google Alerts for specific words, like brands or product names, to stay informed about any news to do with your niche. How can you make good product choices? Choosing the right product supplier is crucial to having a thriving dropshipping business. You want to offer a variety of quality products that consumers will love. Make sure you get samples and try out the different products before settling on a supplier. In terms of what to sell, the most important part is simply thinking about your customers: what do they need, what is valuable to them, how can you make their lives easier? Don’t focus on the sales as much as keeping your customers happy. That’s how you create a long-lasting relationship and a great brand name. Learn more: Top 10 Trending Products to Sell Online Is customer service important? Sometimes...

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