28th May 2020

How Can Dropshipping Survive the Crisis?

The term “dropshipping” might not sound familiar to many but when we break down its meaning, you’ll probably remember it forever. Why would that be? Because dropshipping is one of the most intriguing business models that have ever existed, giving anyone with an Internet connection the ability to become an online merchant. In this article, we will not only explore the fascinating concept of dropshipping, but we will see how the pandemic has affected it and what it means for its future.

What is Dropshipping? 

In a nutshell, dropshipping allows you to own an online store without ever having to own the stock or physical products you are selling. Your responsibility is to bring people to your e-shop and convince them to buy the products. Once a customer places an order, then and only then will the factory/third party supplier ship the products to the customers. 

You’re essentially acting as the middle-man between supplier and customer, providing the online exposure these products need to get from the supplier to the end-user. This sounds simple, doesn’t it? The truth of the matter is that like with each and every industry, the inner workings of dropshipping are unique in their own right. The supply-chain part of the dropshipping equation is quite elaborate and this is exactly what this pandemic has brought out in the open. 

How is The Pandemic Affecting The Industry?

One one hand, someone could argue that since dropshipping is a digital enterprise through and through, the pandemic should have had a positive effect. That’s a perfectly reasonable way of looking at it and there is a lot of evidence to support this. 

According to Statista’s COVID-19 Daily Barometer, e-commerce shopping appetite and sentiment have grown dramatically in China, Germany, the United Kingdom, and the United States. Similarly, SaaS platform provider Quantum Metric, released some interesting facts regarding online sales from select brick-and-mortar stores, showing they have increased by 52% compared to a year ago, while conversion rates have gone up by 8.8%.

Whilst this is all very positive, there’s a whole other side to this that has been negatively affected by COVID-19. The quarantine measures and the ban of travel means that international and even local delivery systems have been in standstill or have been operating at an all-time low. What does that mean for dropshipping? Major delays in delivering merchandise and even bigger costs associated with them. People might be more eager to shop online but supply chains were built on the premise of a stellar transportation and delivery system. What the crisis is showing merchants is that those who will survive and even thrive, are the ones who will be able to adapt. 

How Should Dropshipping Merchants Respond? 

Branding

The first thing you should do is address the matter at hand. Inform your client-base about the current situation and set expectations about delivery times. Try and be creative and personable in how you message this. Times of crisis are great platforms for branding awareness. Nike released a video about the importance of staying home, making us feel like athletes. They could have released a simple statement regarding the same issue. What they decided to do instead was package their message in a relatable, shareable and original way. 

This is a brand you can learn from and turn a negative situation into an opportunity to promote your shop. Talking of learning, let’s move on to the next section. 

Learn

Take the time to learn. Yes, learn. In a corona-free world, we were all caught up in the rat race, trying to do as much as we could on a daily basis, never having the time to sit back, read and get educated on the matter at hand. Dropshipping has so many facets to it and this is a great time to explore them. 

Read about success stories and learn how they leveraged email marketing as a powerful tool to sell! What about PPC? Do you have a pay-per-click strategy or plan? Maybe now is the time to start thinking about it. Then there’s social media, one of the strongest sales funnels for dropshippers if used correctly. There’s so much to learn about setting up and executing a proper social media marketing plan

SEO & Blogging

The art of SEO is not one many businesses wish to take on. Why? Because it’s a long game, one that needs time, investment and patience. Blogging consistently in order to acquire a digital footprint for your store and subsequently appear in the top searches of search engine machines is a tall task. Here is an amazing resource for the “The Beginner’s Guide to Dropshipping SEO” and how important it is to incorporate it into your business plan. If anything, this pandemic is giving you ample time that you might not have had if you were not home for most of the time. Make sure you use it wisely. 

Funding

Last but not least is a rather important thing called funding. In troubled times, SMEs are the first to be financially affected. Thankfully, during this worldwide pandemic, governments have set aside serious funding to help these businesses get through the crisis. Where can you find the information you need? Luckily, Shopify has created an incredibly useful resource for all the government relief programs, outlining all the relevant information you might need, based on your location. Make sure you have a look.