How COVID-19 Will Affect Dropshipping?

Photo by Parth Patel

Dropshipping is a great business model for new entrepreneurs to start with because of its accessibility. But, that access is no longer profitable due to COVID-19 pandemic.

COVID-19 pandemic has affected millions of local businesses including drop shippers all over the globe. As every nation has sealed their borders for import of goods mainly from China, drop shippers primary medium of inventory has been blocked.

Shopify is known for the largest number of active dropshipping stores all over the internet is being also getting affected in revenue as small drop shippers are leaving due to this.

Meanwhile, Oberlo being the most used Shopify app for discovery and import of the AliExpress products for drop shipping losing their users.

China loses trust from the world

China has the largest number of suppliers who drop ship millions of products every month. Corona Virus outbreak origination was from one of the cities named Wuhan in China. This outbreak created fear in everyone’s thinking of avoiding purchasing Chinese products.

Nowadays, if someone orders any product from an online store and they found out that it is a Chinese product when it gets delivered, then they are surely going to return it. And returning of products means loss of revenue and lots of chaos including waste of time for refund process.

Nobody wants to support China for this big mistake of not warning the world about the Corona Virus. It will take a while for China to get back into the supplier business. Till then, dropshipping is abandoned or maybe overtaken by any other country.

Retailers are going to overtake the Dropshippers

During this ending era, retailers are going to get the opportunity of boosting their online stores who were competing with these drop shippers. Local businesses will be seen overtaking revenues and can be seen making more sales than dropshipping stores.

Also, many drop shippers will convert their dropshipping stores to retail stores so that they can generate more revenue from the retail business. This may cause cutting down in the number of international purchases and an increasing number of local orders can be seen.

India can be seen improving their economy

India is the country with one of the largest numbers of drop shippers and most of them target foreign countries such as United States, Canada, Australia, etc. And here comes the advertising cost for those countries. If the drop shippers move to retail businesses, then the cost for advertising is going to be lesser than before. It may be profitable for an Indian drop shipper to move on to the retail business.

What’s next?

Shopify may giveaway longer time for trials of their product to get the small businesses back on their platform. Somehow, people will be not leaving Shopify as they are seeking for business, whether it is from dropshipping or from retail. More stores will be opening their online stores because they have understood the importance of how delivering items can be easier than renting a physical shop. India can be seen as a supplier for drop shippers after China in near 2021.

So, that’s all folks. This was something about the future of dropshipping.

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Author | Product Engineer at Synup | Founder @quotesdonut

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Parth Patel

Parth Patel

Author | Product Engineer at Synup | Founder @quotesdonut

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