Is Dropshipping Still Profitable in 2021?

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While dropshipping has technically been around for years, it is a relatively new term for many investors. The idea of dropshipping started way before the launch of the internet. Catalogs that would arrive in homes would showcase items sold by a store that didn’t have a warehouse full of stock. When a customer placed an order, the distributor would fill the order, and no one was the wiser. However, with roots that are much older than anyone realized, is dropshipping still profitable in 2021?

The simple answer to that question is a resounding yes! But, let’s get into why dropshipping is still profitable and a vital part of the future of making money through eCommerce

1. Fast Growing Overall Market

The global dropshipping market in 2018 was valued at USD 102.2 billion, and experts project that the market will have a 28.8% compound annual growth rate (CAGR) through 2025. This fact means that dropshipping is not going away anytime soon and should grow substantially in the next few years. 

Working with a global brand like Amazon to start your own dropshipping business is a no-brainer when you think about how much money you can earn in this hot market.

2. Online Ordering Is Not Going Away

If history has taught us anything, it is that brick-and-mortar stores are beginning to become a thing of the past. Online ordering is a convenient and easy way for people to find what they need and have it arrive on their doorstep with just a click of a button. Amazon and other retailers have been working for years to up their game when competing with the brick and mortar world’s giants. If anything, online ordering will only increase in the future.

A woman opens a box of shipped groceries.

Online orders will more than likely increase in the future.

3. The Pandemic Changed How We Buy

While we can all agree that the 2020 pandemic of COVID-19 put a significant wrinkle in everyone’s lives, it was the catalyst that helped eCommerce grow even more profitable. Consumers ordered a lot online before the pandemic, but now we order even more as the coronavirus is still circulating. People order clothes, household supplies, and even groceries to arrive at their doorstep and keep themselves distanced from others. 

The Coronavirus drastically changed buying habits, and the final figures from 2020 were estimated to end at about $840 billion in eCommerce sales. It also helped final stats blow that estimate away, ending in eCommerce sales reaching $861 billion in 2020, an overall increase of 44% from 2019. 

4. Major Retailers Use the Dropshipping Method

Have you ever been to a popular store site and noticed that the item you chose is shipped by another vendor and isn’t available to purchase in the store? More often than not, that national brand is using the dropshipping method to fulfill their orders. 

Dropshipping isn’t only for the little guys anymore, as even the most prominent brands have realized that it can be a great way to provide products to customers without worrying about stocking them in a warehouse. About 27% of online retailers have used the dropshipping method to boost their sales. So, is dropshipping still profitable in 2021 if big players are using it? The numbers would say so.

5. Top Online Retailers Are Changing

While Amazon continues to secure the number one spot at the top of the online retailer list, it is interesting to see how 2020 affected other retailers. A recent projection from Digital Commerce 360 estimates that other big names have jockeyed for their spot in the overall ranking. Walmart rose to the #2 spot over Apple while Dell stayed in the #4 position. Best Buy and Home Depot switched places at #5 and #6, respectively, which shouldn’t be too much of a surprise given all of the time we had at home this past year for home renovation projects.

This projection’s exciting part is Target upped their game from the #12 spot in 2020 to the projected #7 spot for 2021. It seems that Target has also tried the dropshipping method with their increased online options that aren’t available in stores. 

Kroger is the biggest surprise of them all, jumping from their #13 spot in 2020 to an impressive #9 spot in 2021. Again, this shows that buying power has changed as more consumers purchase items, even their groceries, online.

6. Better Technology Boosts Customer Reach

Hand pushes shopping trolley out of the laptop

Dropshipping allows you to reach a growing number of people online.

To ensure that your dropshipping business is profitable, you need to have a growing market of customers. Technological advances and continuous updates have increased the number of people buying items online. Over 2 billion people worldwide purchased products online in 2020, and every year that number continues to grow. 

Starting your own dropshipping business allows you to tap into this ever-growing market of people who purchase products using their cell phones, computers, or tablets.

7. Earnings Speak for Themselves

When you work with an Amazon dropshipping management service like NextGen, you allow our team of experts to take care of everything for you and ensure that your store is successful. We currently have hundreds of happy clients who make money without having to lift a single finger. Take a look at how our clients’ stores are doing monthly. Investors enjoy a proven source of a passive form of income that is entirely hands-free.

Dropshipping is still profitable in 2021 and will continue to grow substantially in future years. The combination of better technology, buying patterns, and increased global reach can create an investment opportunity that will bring you big profits. 

Learn more about how to make dropshipping work for you by scheduling a consultation today! Our team of professionals is happy to answer your questions and get you onboard to boost your passive income.

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