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It may be a harsh fact to face, but 90 percent of new eCommerce businesses fail within the first four months. The 10 percent that survive are proof that determination and adaptability can overcome the obstacles facing an eCommerce business today.

The typical struggles of a new dropshipping business range from pricing issues to weak website design and lack of marketing . Without the right solutions, these obstacles can be overwhelming to new online business owners, especially dropshippers. 

Luckily, with a little trial and error, access to resources, and perseverance, you can be part of the 10 percent.  

Before we dive into the most common reasons dropshippers fail, let’s address some of the questions that have been buzzing around dropshipping.

Is Dropshipping Dead?

Not at all. If anything, dropshipping has grown exponentially over the past few years leading to more successful entrepreneurs and dropshipping businesses. There are no signs of eCommerce going away; it has become a new-norm and it’s expected to double by 2023! 

That means the demand for online stores and products won’t be going away either.

Need more proof that dropshipping is alive and well? Take a look at this google trend graph showing the trajectory of interest in dropshipping over time. 

Dropshipping began emerging when China became a manufacturing epicentre, and was aided by the UN with subsidized shipping. 

In the last five years alone, the demand and interest in the space has quadrupled. This is certainly due in part to the low barriers to entry and the skyrocketing growth of eCommerce. 

More consumers than ever before are relying on eCommerce to buy their necessities, luxury items and everything in between. In fact, revenue from online sales is expected to increase from  $25.4 billion to $33 billion by 2024. 

Furthemore, Dropshipping is a long way from dead, it is simply changing. Consumers are interacting with stores in different ways, some of changed include: 

• 73 per cent of projected 2021 online sales will come from a mobile device. 
• 62 per cent of online shoppers will watch video reviews of products before they buy. 
• 43 per cent of online shoppers research products on social media before buying. 

Millennials make up the largest generation of adults and they are the first generation of “digital natives,” a group that hasn’t had to adapt to digital era technologies. They are accustomed to using the internet for shopping. 

The eCommerce world is where entrepreneurs in every industry need to be focusing their efforts. With eCommerce’s 17% growth rate, dropshippers need to prepare for the influx of business as the demand for online shopping skyrockets. 

“The dropshipping market is too saturated.”

Some people claim that dropshipping is dead because the market is simply too saturated. All the available business for dropshippers has been taken. That is simply not true. For those looking to be innovative and adapt, the opportunities are endless. 

Dropshipping businesses are attractive to entrepreneurs because of the low startup costs and massive potential profits. But, running this type of business isn’t easy nor is it passive. Its still a business, and it takes hard work and dedication. 

It requires extensive dedication to building trust with your customers and constant evolution to meet their needs. Without intense dedication and innovation, the competition will certainly overtake you. 

The dropshipping model is brilliant for businesses looking to save time and money, and for entrepreneurs looking to create a sustainable business. However, as we’ll discuss below, many dropshippers don’t have what it takes to make this lucrative business model work. 

If you are dedicated to the possible growth in this field, you will outlast the competition and reap the rewards. The opportunities for dropshippers are there; how badly do you want them?

Is Dropshipping Legal?

Yes, dropshipping is a legal order fulfillment model used around the world. However, if aspects of the dropshipping model aren’t handled correctly, there can be legal consequences. 

Like any other type of online business, there are liabilities that owners need to be aware of.

One liability is the risk of selling defected or counterfeit products. It’s shocking to learn that 3.3% of world trade in 2016 was counterfeit goods! If the products you sell in your store are proven to be counterfeit, the liability is on you. Since dropshippers aren’t physically checking or handling their products, this is a serious risk. 

Another potential risk occurs when dropshippers don’t treat their business as a taxable source of income. You may not be required to get a business license in your location, but doing so makes it much easier to abide by taxation rules and be transparent about where your money is coming from. 

Lastly, the types of products you sell can get you in hot water. Let’s say you want to sell phone cases with celebrities’ faces on them. These images are likely trademarked and copyrighted which makes you profiting off them illegal and grounds for getting sued. 

With Spocket, everything is vetted and screened before being placed on our platform. Making these risks miniscule, and leaves you with more time for marketing and building your customer base. Check it out now for free!