Age 21 Kamil Sattar Is The Founder & CEO of E-commerce Mentoring And The Leading Industry Expert Of Dropshipping
Nowadays it’s difficult to even watch a YouTube video without being hit by the sentiment “Drop-shipping is dead!” Is one of the biggest business models with the potential to turn anyone into a millionaire now over? With the rise of technology creating a low barrier to entry, anyone with a Wi-Fi connection can potentially become your competitor. It’s easy to look at the ease of entry and largest drop-shipping countries and conclude the market is saturated.
So how, even with the modern-day crisis of Covid-19, has e-commerce beat expectations when it comes to spending? The simple explanation is that market changes, such as more people being at home due to a pandemic, will continue to create a need for drop-shippers and avoiding a perpetual state of market saturation.
In its “Digital Insights” report, Adobe shows actual online spend as $77 billion more than expected. Most competition for that spend can be found in “the big five” drop-shipping markets, which, in a 2019 ranking by World Retail Congress, included the United States, China, the United Kingdom, Japan and Germany. Thanks to their embrace of online shopping, these countries are often the first targets of drop-shippers and have high advertising costs compared to other countries. This gives the false impression that marketing as a drop-shipper is expensive, but more markets are emerging as countries have been forced to adapt and increase their e-commerce presence, bringing with them new waves of customers that drop-shippers can leverage.
What about Amazon?
So why would a drop-shipper not just go to Amazon? Even companies like Amazon have gone through distribution meltdowns and, as a result, are being forced to prioritize essential goods to maintain their reputations as dependable providers. I’ve observed some retailers on Amazon are now using “not urgent” discount codes to account for the rise in shipping times. Common drop-shippers have had to hold down the fort and play their role in keeping the economy moving — by leveraging wait times from customers, providing better service and using local suppliers to feed their businesses.
How do you fill the e-commerce need?
The drop-shipping market isn’t saturated — new markets continue to appear. It is also open to more competition because effective marketing campaigns help distinguish market players no matter how many others are on the court. Common drop-shippers focus on selling low-quality products with low-quality marketing. They might try to set up stores quickly, running five-dollar ads in hopes of becoming millionaires.
However, successful, experienced drop-shippers approach the business exactly like it is — a business. They look at supply and demand and where they can add value to the market. When advertising, they have a sufficient budget that they are willing to lose. When marketing, they add variety, use tools like scroll-stopping ads and spend even more time on marketing than they did on the stores.
Professional drop-shippers remember that customers come first and there is no such thing as getting rich quick. This way, they never fall behind. Even if they are advertising the same product that you are, they are miles ahead — simply by being well prepared through investing a little more time and effort while remaining customer-focused.
How can you approach marketing?
Being customer-focused means nothing if you cannot implement it practically or build a store that is unique and provides as much value as possible to the customer. But before we get into that, you need to understand the theory behind drop-shipping.
Drop-shipping is a business that has been around for decades. It does not require you to have a product in-house; instead, you ship a product to a customer for a fee. Almost anyone can do this, but what most people fail to discuss, and what can lead to the assumption that the industry is saturated, is the marketing and advertising element.
When strategizing marketing plans, I find it helpful to reflect on three key points all advertising is based on: health, wealth and relationships. Health is not just about being overweight and wanting to become slimmer. It is about your physical state, well-being and presence. Take a look at Coca-Cola, for instance. It is a marketing master. It has products that can be advertised based on the three key points: personalized labels with names (relationships), Diet Coke (health) and caffeine for increased productivity (wealth).
Another way to look at the products you select to drop-ship and build your business around is through the lens of something all humans were born with: movement away from pain or toward pleasure. Now, look at your product. How does it help the customer? Not only what problem does it solve, but how can you advertise this problem? Does it help customers move away from a certain pain point or toward a certain goal or pleasure?
All products I advertise go through this step-by-step process. I first look at a product and ask myself if it is unique. Does it solve a problem? Then, I complete extensive research in terms of what this product can do for the customer, which problems it solves, which benefits and features it has, and, most importantly, what type of emotional attachment the customer could have to this product.
The key points to remember when considering whether drop-shipping is truly dead in 2020 are that saturation isn’t a concern as long as markets continue to shift — and even in competitive markets, advertising can set you apart. Drop-shipping is a business that will never die as long as the concept of the intermediary exists. The only difference between your product and an overseas supplier is your marketing and understanding of how your product stands out from others.