Starting a Dropshipping Business in 2024: Is It Worth It?

Starting a Dropshipping Business in 2024: Is It Worth It?

The global eCommerce boom is unmistakable, especially after the pandemic. However, there are still some people who doubt whether dropshipping is relevant in 2024. It has been a highly lucrative form of retail business where the seller accepts shopper orders without an inventory at hand.

This means the seller and the supplier are two different individuals. The supplier benefits through greater exposure whilst the seller gets to generate profits without really producing anything. Doesn’t this sound like a perfect business model?

It indeed is, since the worldwide dropshipping market size is registering a CAGR of 23.4% between 2023 and 2030. By the statistics, it is clear that dropshipping is nowhere near dead (especially in 2024). It is evolving into more relevant forms with the increased proliferation of technology.

Have you put your desire to become a dropshipper on hold? Then, this is the year to get started! In this article, we will discuss the top challenges of dropshipping in 2024, along with useful tips for market success.

Top Challenges Dropshippers Face in 2024

You might have heard some people exclaim that dropshipping is difficult. There is some truth in that statement. Many people do not embark on their dropshipping journey because of some major challenges involved. These include the following.

Profitable Niches Are Super Competitive

From whence the dropshipping industry started, it has come a long way. One of the main reasons for the fast growth is a small group of highly profitable niches. The issue is that these niches are often very competitive (making product selection a vital process).

Dropshippers may struggle to choose profitable products within a particular niche. This is especially true of those new to this business. To start on the right note, learn more about dropshipping with Importify. Only then will you understand the need to choose a lucrative niche and stick to it.

Opt for items with a solid history of proof of concept. An example would be running a few ads across TikTok or Facebook. Even then, do not pick products with a saturated market. Ideally, the chosen items should be trending but hard to find. They should solve a relevant customer pain point or have a wow factor attached.

According to Importify, some of the most popular niches for 2024 include eco-friendly products, personalized gifts, remote work accessories, home fitness equipment, pet care items, and home improvement products. Choose yours after careful evaluation of profit margins, demand and competition analysis, and product reviews.

Loss of Control over Major Aspects

According to Statista, eCommerce sales are projected to grow at a CAGR of 39% till 2027 (when the global market would be nearly $8 trillion). That’s partially good news for the dropshipper because they have zero control over some major aspects of their store.

These include product quality, supply chain problems, and shipping delays. The aim is to choose products that can secure 300% profits (3x the supplier’s price). After that, focusing on the following strategies should help –

  • Write a compelling product description
  • Add highly professional images that may become viral
  • Understand and highlight the unique value proposition of the item
  • Display the benefits of the product, not just its features
  • Conceal the shipping costs in the price (the ideal is always free delivery based on shopper expectations).

The Risk of Supplier Commitment

Another major risk that dropshippers often run is sticking to a single supplier. That is not a bad practice at all, but it is very difficult to find a good supplier in today’s business scenario. After all, securing a supplier from China will not work anymore.

A better practice is to have at least two to three good suppliers at hand. You must vet all options carefully by asking the right questions, including –

  • Do they provide dropshipping services?
  • Do they have a minimum order requirement policy?
  • What is the estimated shipping cost and time?
  • Who is responsible for paying customs fees and tax duties?
  • Is the supplier also the manufacturer of the products?
  • Are they offering multiple communication channels?
  • Is their inventory always up-to-date and high-quality?
  • How do they intend to manage refunds and returns?

A pro tip would include sticking to suppliers in the local area if possible. This way, there are few chances of running out of inventory or delayed shipping times.

Ongoing Need to Discover New Relevant Products

Did you know that the average lifespan of dropshipping products is only 60 months? This is why another major challenge facing dropshippers in 2024 is finding/discovering new relevant products constantly.

The key is to keep jumping ahead of trends before the market gets saturated. You must aim at securing as many sales as possible before another dropshipper copies your winning idea (this practice is commonplace in the industry).

List products that have reached their saturation at competitive prices. Provide detailed and engaging product descriptions along with clear images taken from different angles. You can get as creative as you like for this step.

Finally, develop a failsafe strategy to get before the right people and maximize marketing efforts. These would include –

  • Posting a mix of paid and organic copies
  • Creating a solid social media presence
  • Sharing relevant content
  • Offering a shopper a streamlined buying journey
  • Learning to capitalize on recurring customers
  • Providing personalized suggestions
  • Offering free shipping after a certain order value

Useful Tips for a Thriving Dropshipping Business

With the above-mentioned challenges, we have discussed ways to overcome them. However, there are so many things to take care of as a successful dropshipper. In this section, we will provide a quick rundown of useful tips for a thriving dropshipping business.

  • Choose a niche wisely. For instance – If bubble tea is an up-and-coming product in your area (and people are talking about it), you can start selling tea-related accessories like mini Boba backpacks, cup and straw sets, plushies, or even bubble tea-themed phone cases.
  • The next tip is to take care of your online store like you would a physical one. This would include editing each photo, proofreading and beautifying product descriptions, etc.
  • Always be transparent with your shoppers through regular interactions. Let your product pages include information like their origins and shipping times. Build relationships through social media and keep the response time minimal.
  • Don’t forget to build your brand’s identity. The only way to thrive in today’s cut-throat market is to have a brand identity and unique selling propositions for the products. This stays even if all your products are shipped from AliExpress. People will only trust you when your brand looks and feels like a legitimate business.

While there are no study findings, it is believed that most dropshipping businesses fail during the first month. The common reasons include choosing the wrong niche, lack of investment, selecting the wrong platform, high prices, and poor customer service.

It is better to wait till the timing is right than to open up a dropshipping store that you seldom invest time, energy, or money into. If only relevance was holding you back, there’s no reason to sit on the fence because dropshipping is as relevant today as it was six years ago.