Is Dropshipping Dead?

One of the biggest concerns with dropshipping is that there are numerous brands in all the niches that saturate the market. This can cause problems, but that doesn’t mean that there is space for new brands. In fact, new brands can come away from what everyone else is doing and create their own specific niches.

For example, so many dropshipping websites use the same products because they have the key components, when starting, for a good product. They have great reviews, good profit margins and lots of sales. The problem is, that as the product gets popular and more brands sell it, they get competitive and this can cause some brands to lower prices. This squeezes profits to such a point where the product is no longer profitable. But shop owners are reluctant to lose a product that sells high volumes on their website.

However, if you look at it another way, you can sell all the products you want at a $1 loss, it doesn’t make you better than a business that sells very few products at a $10 profit. So always keep an eye on profit margins. Be sure that all dropshipping products have at least 40% profit margins. If someone else moves into your niche and starts cutting their prices, consider pulling the plug on the product.