The internet is filled with dropshipping success stories and you’ve probably come across a few yourself. Naturally, these stories might have persuaded you to start an ecommerce business of your own.
But, you might have also asked yourself, is dropshipping saturated?
Despite being described as a low risk, low capital business, a dropshipping business still requires time, effort, and resources to start. No matter how small the risk, there’s still that risk.
That’s why, in this article, we’ll be answering that question along with other important points you need to consider before making a huge life decision.
If you want to explore the feasibility of this business opportunity, definitely read on to see whether you want to continue or not.
Let’s get started.
Is Dropshipping Saturated?
A quick answer should be no, dropshipping is not saturated. But to fully understand why it’s not saturated, let’s first define what the word ‘saturate’ really means.
According to the Cambridge Dictionary, saturate means ‘to fill a thing or place completely so that no more can be added’.
Using this meaning, let’s take a look at whether there’s still more to add to the dropshipping industry—or not.
Given these numbers, it can be clearly seen that the market is only expected to grow in the coming years.
Now, the market value gives you an idea of how big the market already is. From these values, we can loosely deduce that there are thousands of dropshipping businesses all over the world contributing to this value.
Going back to the meaning of saturated, does this mean there’s no more room for new dropshipping products and businesses?
These numbers are only indicative of the current market size. They don’t suggest that you cannot enter this growing market.
The success of your business—if you decide to start one—won’t always be dependent on your current competitors. More often than not, it’s about finding how you can stand out.
So, where does the idea of dropshipping being saturated come from?
When people hear the word, ‘saturated’, they often think that it’s because there are already way too many online stores selling the same thing.
However, it doesn’t necessarily mean these stores won’t succeed. Sometimes, they just have different target markets and strategies for similar, or the same, products.
For the past couple of years, it’s been a common mistake that dropshippers target popular niches without having good marketing strategies in place.
While it’s possible to succeed in these specific niches, there’s no denying that it will take a lot of planning and standing out—and sometimes, luck.
Just because a niche is popular, doesn’t necessarily mean it’s saturated. There are tons of products that you can sell, and many ways to attract customers.
You just need to find the right methods and, perhaps, earn a bit of luck along the way.
Is Dropshipping Still Profitable?
By all means, yes! Dropshipping is still profitable, even in 2021. Don’t get intimidated by the number of people wanting to start their own business.
For as long you understand how it works and has a concrete plan in place, you’re off to a good start.
Just keep in mind that all businesses, including dropshipping, require effort and patience, so don’t rush into the process. Do your research and listen to best practices. This business model isn’t a get-rich-quickly scheme, so don’t expect millions immediately.
8 Reasons to Still Start Dropshipping
It’s perfectly understandable that you’re still not convinced. In this p, we’ll enumerate all the reasons for you to start dropshipping as soon as you can.
Time is of the essence. The sooner you begin, the better.
Without further ado, here are the reasons to start dropshipping in 2021:
Increased Ecommerce Customers
There’s no denying that the pandemic has impacted the ecommerce industry.
As people stayed inside, there was a spike in online transactions. A survey was conducted to examine how the pandemic has affected how customers shop.
The results showed that more than half of the 3,700 respondents now frequently shop online.
UN Trade and development experts in UNCTAD have also said that an increase in share, from 16% to 19%, of all retail sales was seen in 2020.
This could be the result of physical stores shutting down during the initial months of lockdowns. Hence, people were ordering online for their groceries and other basic needs.
In 2020 alone, customers spent over $790 billion dollars with US stores.
With more people inclined to online shopping, it’s easy to say that dropshipping businesses will benefit from this as well.
Freely Available Dropshipping Knowledge
Dropshipping has been around for many years now and this translates to a huge database for dropshipping knowledge.
Pioneers have already had their fair share of ups and downs, and some of them gladly share with the world. Reading through their best practices and worst mistakes can be helpful, especially for newbies.
Having access to these pieces of information puts you in an advantageous spot. You know what to avoid, where to start, and what to do. If you ever feel lost, you can just Google questions and you’ll immediately receive answers.
Some of these dropshippers also offer courses to coach you every step of the way. With proven track records, it’s a great option if you want more assurance that you’re doing the right thing.
Better Tools for Ecommerce Businesses
Advancements in technology have paved the way for better ecommerce tools.
Today, ecommerce website builders like Wix and Shopify make it easy for aspiring dropshippers to start their online stores. On top of that, these already have solutions for the most common concerns like POS, shipping, and website design.
Apart from that, there are now tons of options to market for your business. From Google Ads to email campaigns, you won’t have to worry about not having a place to advertise your products.
Variety of Product Options
By now, you’re probably aware that dropshippers sell different kinds of products. One of the reasons you should start dropshipping is that you have a variety of product options.
You’re not limited to just one kind of product, nor one niche. You can explore all niches and see what suits your target market best. This is an advantage if certain products are not being sold physically in your region.
If you know how to package your online store well, you can sell all sorts of products.
Zero Storage Costs
In relation to the first reason, a great advantage of dropshipping is that you don’t have to worry about storing the products you want to sell.
There’s no need for you to find a warehouse or storage for your products.
You can just simply post the pictures of products you sell on your website, and orders will automatically be shipped to your customers.
This is why dropshippers can add as many products as they like without worrying if the products will eventually go to waste. It’s also one of the reasons why dropshippers get to explore different kinds of niches.
Flexible Office Location
Now, we’re not saying dropshippers need to have an office just like the wall street companies. We’re saying that dropshippers can manage their business from any part of the world—with an internet connection.
Since everything is virtual and you don’t have stocks on hand, you have the freedom to choose where you will manage your business.
This also means that you can target customers from a different country or region.
You’re not just limited to your current city or country. The only catch here is you need to ensure there are third-party logistics to take care of your shipping needs—in most cases, you won’t have a problem.
Low Startup Costs
One of the main reasons why people want to start their own dropshipping business is that it has relatively low startup costs compared to other businesses.
We’ve already mentioned that you don’t need a warehouse for your products which saves you a lot of money.
Another cost you can save on is purchasing inventory.
You don’t have to buy products, even when your website is already live. What you only need are trustworthy suppliers and third-party logistics services.
Some of the reasons stated above add up to our final reason: scalability.
Dropshipping’s business model makes it easy to scale. Generally, you don’t have to worry about an increase in costs when you add more products or increase your sales volume.
Increasing your sales volume, however, requires you to check with your supplier if they can handle additional orders. Other than that, you’re pretty much good to go.
Perhaps you might onboard employees to be in charge of customer service or maintaining the website. But this management decision is optional, making the additional expense optional as well.
Can You Dropship a Saturated Product?
Since we’ve already discussed the meaning of saturated, the answer to this question is yes. You can still dropship a saturated, or popular, product.
But the caveat with dropshipping this type of product is that you’re in competition with a number of sellers. For some, this might seem too difficult for their liking. But others may take it as an opportunity.
Why you might ask? Let’s discuss.
Popular products indicate several things:
- Tested and Proven in the Market
- High Demand
- Demand for Complementary Products
Tested and Proven in the Market
It’s quite clear that hot-selling products already show strong demand and market. Those interested in selling these types of products can easily save time and money from testing them.
Your effort will now be redirected to planning and creating marketing campaigns to increase your market share.
Fair warning that this can be challenging. But it’s definitely part of the process, especially if you’re in it for the long run.
A popular product easily indicates that there is high demand, regardless if it’s an evergreen product or a trending product.
Now, the advantage of these types of products is that you know people will buy that product. The disadvantage, however, is that you don’t know if people will buy these products from you.
The opportunity in this gap analysis is that you have to think of sales and marketing strategies that will entice your target market to buy from you.
These could be in the form of free shipping, discounts, coupons, better customer service, etc. You can get creative, for as long as it doesn’t make you lose money.
Another opportunity you can explore is to check if these products reach certain regions. For example, there are tons of buyers within a region, but there’s no direct seller for a certain popular product.
You can explore how to start dropshipping within that region and gain a solid customer base.
Demand for Complementary Products
Complementary products are simply products that add value to another product or service. In other words, these are things that customers use together.
A simple example would be buying toothpaste to use with your toothbrush, or vice-versa.
Understanding what complementary products are to popular products provides an opportunity to sell these products. You don’t have to focus on selling popular products anymore.
Or, if you’re highly inclined to sell popular products, you can just simply add these complementary products to provide more value to your customers.
Taking this route will prove to be advantageous once you know the right complementary products to sell, and how to make customers buy them.
How to Stand Out in A Saturated Niche?
Perhaps you’ve already decided to penetrate a saturated—or popular—niche, and that’s great. Let’s now acknowledge that this is going to be a challenging business move, but definitely not impossible.
So, instead of worrying that you’re not going to make it, let’s focus on how you can stand out in saturated niches.
Here are some best practices you should consider when creating your penetration strategy.
Establish A Memorable Branding
More than just having an attractive website, you also need to leave a memorable impression on your customers. You should make sure they remember your business whenever they want to purchase a certain product or service.
In other words, you need to establish memorable branding.
Your branding will not only set you apart from competitors, but it will also solidify the reason why you’re the better option than everybody else.
When we talk about branding, it’s the collective image and impression you leave on your customers. From customer service to your packaging, your branding has to be comprehensive and clear.
Remember that this will give more value to your business. So take your time to create a branding you can sustain in the long run. Consistency is key, therefore, align your resources and think of a branding that will supersede trends and time.
The next p will also talk about another element of your branding that should be focused on.
Provide Excellent Customer Service
Your branding also encompasses excellent customer service. Nothing beats a business that cares for its customers sincerely.
Regardless if you’re a one-man team, or you have a dedicated customer service department, never neglect this aspect of your business.
Dedicate a page where customers can read FAQs or ask questions about your product or service. Whenever someone sends an inquiry, get back to them as soon as you can.
This can require more effort than you expect but think of it as an investment. Customers appreciate businesses that reply to questions and make them feel heard.
So, invest in improving your customer service and watch your customers become loyal to your company. But of course, this comes hand-in-hand with a great product or service.
Invest In Online Presence
If there’s one thing about ecommerce businesses, it’s that customers need to know your business exists. Having a great website and customer service won’t cut it if you don’t get enough traffic on your website.
When investing in online presence, be visible on social media and look into SEO.
Establishing your social media presence will most probably make you spend a bit, but this is an investment you should make.
Helping people find your business is one of the best ways to drive traffic. Whether it’s through Facebook ads or TikTok Ads, being visible almost always translates to traffic and an increase in profit.
Although, this also requires that you have a good landing page where customers can see your product or service.
Looking Into SEO
If you’re not yet familiar with SEO, it’s one of the best ways to land on Google’s first page—AKA the gift that keeps on giving.
SEO, or search engine optimization, is the process of increasing your visibility and ranking when people look you up on search engines like Google.
Why? Because most people don’t go to the second page of Google. They only tend to click on whatever shows up on the first page. In a way, being on the second page is bad for business.
It’s also better to start a blog and create content relevant to your product or service. The more useful it is for customers, the better.
Your website also has to be optimized so customers can easily look up your business or product on search engines.
Don’t forget to keep yourself updated as search engines like Google tend to release new guidelines. Watch out for trends, as well, so you don’t fall behind.
Benchmark From Successful Dropshippers
Successful dropshippers are successful for a reason—and you have to find out what this reason is.
You can do this by analyzing their website, seeing what they’re doing right, and understanding where they put their efforts on.
Joining dropshipping courses offered by these dropshippers is also one of the best ways to learn from the best. Once you find out what this reason is, a benchmark from that.
But remember, there’s a fine line between benchmarking and just plain copying.
When you’re benchmarking, you analyze the main action or solution, and adapt it to your business, keeping in mind the differences between your business and theirs.
With copying, you’re just simply taking everything they do, not minding whether it applies to your business or not.
So, study successful businesses and see what they’re doing right.
Explore Marketing Strategies
There’s no one-size-fits-all marketing strategy. What works for others might not necessarily work for you, and that’s okay. You don’t have to force-fit this type of thing.
However, this shouldn’t hinder you from exploring all sorts of marketing strategies.
Don’t limit yourself to just one social media or advertising platform. Cast a wider net and see what’s out there for you.
Like product testing, this may be a hit-or-miss activity, especially if you’re new to marketing. But push forward and you’ll eventually reap the fruits of your labor.
You can also opt to hire your own marketing specialist if you feel like they can do the job better.
Regardless, prioritize developing good marketing strategies to support your branding and online presence. Standing out becomes more feasible when you have concrete and effective marketing strategies in place.
Reward Customer Loyalty
Once you’ve established your store and have gained a steady flow of customers, start rewarding customer loyalty. According to customers, loyalty programs encourage them to patronize a business.
Moreover, these loyal customers tend to spend 66% more on businesses they’re loyal to. With these customers, you’re now guaranteed sales.
Let’s take Starbucks as an example.
Starbucks has a great loyalty program where customers get points from each dollar they pay to the business. Refills and free drinks are just some of the things you can get if you reach a certain amount of points.
For a customer who’s looking to maximize their spending, this is a wonderful deal.
In the beginning, hesitation is normal since these rewards seem to go for free. But if you take into account the number of times a customer has returned, your profits will eventually cover these expenses.
So, design a great loyalty program. Reward your customers for coming back to your store.
You might be surprised at just how many customers you also gain, since these people tend to recommend their favorite companies to family and friends.
It’s common to hear people say a dropshipping niche is saturated and no longer profitable. However, in this article, we’ve established that although there are popular products, it’s never too late to be a part of that niche.
One caveat that you should keep in mind though is that starting a dropshipping business—regardless if you’re going for a popular niche or not—requires time and dedication.
You cannot build a successful business overnight, nor can you easily stand out amongst your competitors. This will take planning and lots of patience.
On the bright side, NicheDropshipping has solutions to help you start your dropshipping business. Contact us and an agent will gladly help you through this process.