How Long Has Dropshipping Been Around?

It is very difficult to find the exact moment that dropshipping started. Part of the process of dropshipping is not making the customer aware of the third-party supplier in some context. This allows the brand to manage the transaction and not lose the customer to the actual supplier who might offer the same product at a lower cost.

However, it is generally considered that dropshipping started in the 1960s, long before computers and eCommerce were commonplace in the home. Instead, dropshipping started with mail-order catalogs.

What started was large branded department stores sending out catalogs to customers who can then place orders via mail or over the telephone. One of the employees would then pick the items off the shelf and deliver the products to the customer. It was a simple, effective process, but it had one drawback, it was so popular that department store shelves were being emptied and this was bad as it gave a negative impression to customers walking in.

So they had to come up with a solution and that was fulfillment warehouses. These massive warehouses were designed to store large quantities of produces and speed up the mail-order process.

And this is when dropshipping started to take off.

This is when entrepreneurs saw an opportunity to make money. What they would do is create their own mail-order catalog with the products from the department stores. They would have prices higher than the department store and then they would distribute their catalog. When they got an order from a customer, they would order from the department store and then deliver it to the customer.

The problem was that the larger department stores weren’t aware of what was going on, not in the beginning. But this also isn’t the exact model that is recognized today. It has taken some time to get that. And that did require the internet.

When the internet came about, businesses saw the opportunity to transition to this new medium. It was the perfect way to sell. However, consumers were slower on the take-up. Many consumers felt it was risky to provide card details to someone on the internet and it was much safer to give them to someone over the phone. Nowadays, ironically, the opposite is said.

However, dropshipping wasn’t a complete success. During the 90s there were many new dropshipping businesses online, but while customers started to come around, many were not sustainable and they closed.

However, since then the technology has improved. Amazon and eBay showed how eCommerce could work and then Shopify has developed their software and programming. This allowed for new technology, secure connections and better access to it. And consumers became more trusting.

Therefore, dropshipping became more accessible to the general person and with better globalization, costs for all could be realized. Therefore, dropshipping was finally mainstream.