Is Dropshipping Dead?

(For the ones that don't know what dropshipping is. It basically means you promote a product of which you don't own stock and once you get the order you ask a supplier to ship it out on your behalf directly to the end consumer.)

Is dropshipping dead? It is very cliche I know that. But I still get this question in almost every interview I do. I will give my answer soon, but let me ask you a few questions first.

Do YOU believe dropshipping is dead?

You clicked on this question for a reason. Somewhere inside you have a doubt or perhaps other people have asked you this question and you don’t know how to answer this. 

Let me ask you another question. 

Do you think you will stop buying online?

Do you think you will stop buying any product recommended by someone?

Do you think that social media will stop triggering people to buy products?

If your answers to these questions are NO then you might be able to answer the question yourself by now as well. But I want to take you one level deeper. So stay with me ok?

Do you think people will buy a product quicker in a search engine such as Ebay and Amazon or when it is promoted on social media?

Exactly! The largest growth is driven by social commerce. The growth of centralised platforms Amazon and Ebay is declining. It is the decentralized platforms that are growing. Social media will change how the game of dropshipping is being played on these decentralized platforms. It is changing the dropshipping game into social dropshipping. You or an influencer promote a product on Instagram, Tiktok, Pinterest or any other channel. The consumer likes, clicks on it enters a conversion channel such as Shopify and buys it. Once the order is paid you pass on the order to your supplier. You can integrate Shopify with TikTok so each order is managed and stored. No need for a strong landing page, no need to run heavy ads just need a conversion window. You change cold leads into warm leads with the use of influencers and social media. In the end most purchases are impulse buys.

Then the most challenging part comes. You will need to keep your promise and delivery a high quality product. As you don’t touch the product yourself you need a supplier you can rely on. The dropshipping fundamentals are the same. Just the tools to generate demand has changed. Get familiar with that and learn how to create a demand. The biggest difference is that you cannot win with social dropshipping without the support of your supplier. You don’t play the game yourself anymore. You play the game with a supplier you trust.

After all social media can make or destroy you. To solve this problem you need to run the campaign only after you have a supplier that is prepared for what is potentially coming. That doesn’t mean you need to buy stock in advance. Most of the time there is stock, but simply not enough. The biggest issue you will have is to have orders, but no supply. 

In China this whole business model in creating a demand is already existing. There is even a separate name for this, knowing KOL. Short for Key Opinion Leaders. These individuals are asked to promote a product to their followers in their own style. These campaigns can generate millions of orders in a matter of seconds. What a lot of people don’t know is that the supplier has been preparing batch 1 already long before the promotion started. Sometimes it is even mentioned that only a limited quantity is available and if more orders are sold you will get the goods from the second batch and the consumer can still decide if they still want it but need to wait a little longer. How awesome is that! This is what I mean with social dropshipping. It is not a one click it is a full integration of engaging with both the consumer as well as the supplier.

Let me tell you. Dropshipping is not dead, just the game has changed and you need to (re)learn how to play this. It is not dead and you are not too late. Think about it. On most social media it is not possible to purchase a product yet. Social dropshipping is just beginning.

If you think this is valuable information please do share with others and sent me a DM. We are on your side and would love to help you on your journey to start with social dropshipping. Most dropshippers are looking for an agent that gives them best price, but sometimes you simply forget that having a partner that is on your side might be worth much much more. 

Simon de Raadt