Before making that all-important decision to launch your own dropshipping store, you may have asked yourself this question: is dropshipping saturated?
And rightly so!
You don't want to go to the effort and expense of starting up a dropshipping store only to have it fail.
But before diving into the why, let us give you a quick answer:
No, dropshipping isn't saturated. It's true that more people are doing it now, but new products, markets, and customers are always emerging. The key is to offer something special that sets you apart and always watch what customers want.
Overview: Is dropshipping (over)saturated?
Before we dive into the details, here's a quick answer to why dropshipping is not oversaturated.
Dropshipping saturation indicates that there are no (or nearly no) opportunities or demand for (new) dropshipping products.
This is simply not true.
For example, the following wouldn't be the case if dropshipping was saturated:
- The interest in dropshipping is near an all-time high, according to Google Trends.
- Popular dropshipping apps like DSers are getting hundreds of new installs every day.
- Top dropshipping stores like Sage & Sill are getting thousands of daily visitors, according to Similarweb:
This wouldn't be true if dropshipping was saturated, right?
The key to succeeding in dropshipping is about finding your unique path.
Think about what makes you different. Maybe you have a cool product idea or know a lot about a specific hobby or interest. Use that to stand out.
So, don't worry about dropshipping being oversaturated. With the right approach, there's plenty of space to succeed!
Ready to level up? Our ultimate dropshipping guide for 2024 is full of our best insights, ideas, and steps to follow.
What is market saturation?
Let's continue with a definition of market saturation.
Market saturation happens when most of the prospective customers in a current market already use a product or service... and indicates that the demand in the current market is satisfied or nearly satisfied...
Source
So, for dropshippers, saturation would mean that customers no longer want to buy any products they sell.
Again, this would be because customer needs have been satisfied, and the market is saturated to the point where no more money can be made with that product.
But the question "Is dropshipping saturated?" implies that it is dropshipping itself that is saturated.
Here's the thing: dropshipping is a fulfillment method - a method of merchandising that has a history of several decades now.
If we assume that there is such a thing as dropshipping saturation, this would mean that the business model of dropshipping itself is dead.
And it's not!
Take, for example, these nine big ecommerce stores that started with or are still using dropshipping as their fulfillment method.
Yes, ecommerce platforms like Shopify have provided an easy entry point into dropshipping for many of us.
And, yes, this has created a crowded online dropshipping community.
But dropshipping has survived through decades of challenges, and there's little evidence to show it's going away.
Tens of thousands, perhaps hundreds of thousands, entrepreneurs have created successful dropshipping stores:
While a competitive market makes it more difficult to profit, it also opens up opportunities.
It reminds me of the glass half-empty, glass half-full argument.
Believe it (half-full) or not (half-empty), even if a market is close to saturation, you can actually succeed in it!
Either you throw up your arms in defeat, believing there's no room for your company to grow, or you embrace ways to differentiate yourself from your competitors by concentrating on things like:
- Product improvement
- Lower or higher pricing
- Private labeling (you can find a list of private label suppliers here)
- Loyalty programs
... and that's just for starters.
And what about saturated products?
Is there even such a thing as a saturated product?
Some say yes. Others say it's a myth.
So, let's take a good look at market saturation:
Causes of market saturation
Let's start with an understanding of what causes a market to saturate by taking a look at the competition:
1. There's too much competition
If you believe that many dropshippers have crowded the marketplace, that's true.
But consider this.
While it's true that the number of dropshipping stores has exploded in recent years, this isn't reason enough to give up the idea of dropshipping in 2024.
Yes, there are an estimated 12 to 24 million ecommerce stores worldwide, which sounds like a lot of "saturation" and competition.
However, only one million of those stores actually sell more than $1,000 per year!
That means there's lots of room for savvy dropshippers to do a better job.
Many of those millions of stores earning less than $1,000 per year were likely launched with many cheap products in the belief that dropshipping was a "get rich" scheme rather than a business requiring knowledge and effort like any other real business.
So, if you're concerned about too much competition, it isn't as bad as it first seems, especially when you consider that 2.14 billion people all over the world are expected to make an online purchase this year.
The trick is to do your research to find out what product those buyers need or want.
This brings us to the idea of a saturated product - a product that has reached its maximum audience, and demand for it falls.
Some say certain products like "pet beds" or "posture correctors" are saturated because there are so many identical ads for these things all over social media.
But if those products are really so saturated, why do so many retailers continue selling them?
Is it because they don't know what they're doing?
Or is it because they know there is still enough demand for what they're selling regardless of the competition?
I think it's the latter. Even amid competition, you can still make money!
Many people talk about saturation, which is a word I really hate personally because I think saturation is just a synonym for competition, but it’s a much more negative tone.
Ahmed Hadi, Oberlo
Yes, you can beat the competition by first analyzing your competition and then upping your game by being price competitive, unique in your brand, and gaining credibility with user-generated reviews or videos.
2. Technological innovation
Markets are dynamic and always changing for many reasons, but technology has evolved quickly in the last hundred years.
This means that if the product you're selling is outdated, demand for your product will nose-dive.
For instance, Artificial Intelligence is currently trending, and your success as a dropshipper could depend on your efforts to integrate it into your store.
Things like AI chatbots, personalized product searches, and product recommendations can propel you ahead of your competitors.
One more example is Jasper, an AI that helps you write amazing marketing copy!
But it can also help you with things like:
- Writing articles
- Product descriptions
- Landing pages
- Feature to benefit (turn your product features into benefits that compel action)
If you're interested, then check our article here, where we go over an example of how to sell a product with Jasper.
Note: Did you know that Jasper launched Jasper Art? This helps you create images with AI! Check out our in-depth review here.
3. Changing trends
Trends are another way a market can change quickly and send your business into a tailspin.
What was cool yesterday could be dead in the water tomorrow. Literally overnight.
And I'm sure right now you can think of a few examples.
Unlike the more subtle change that happens with technology, trends like Pokemon swell up, make compulsive buyers of many, satisfy the "need," and then fizzle out dramatically.
Remember those fidget spinners that spun into popularity in 2017?
Retailers, both brick-and-mortar and ecommerce, rushed to copy them, flooded the market with them, and reaped the financial reward...for a while, anyway.
Because they were inexpensive and accessible to so many, every cool kid could afford an entire collection of them.
Demand was sky-high. And dropshippers did well.
Then, suddenly, they were no longer cool.
This is not to say that dropshipping a trending product can't be profitable if your timing is right and if you have the right tools.
For example, with a free trial from the dropshipping app Sell the Trend, you can explore many trending and winning products to sell on your store:
It's risky, though, because when trends die, your customer base withers, and your store, well, let's say you might need a fidget spinner or two of your own to lessen your stress.
But if you have a backup plan and you're aware of the pitfalls, trends can provide a viable, although short-lived, way to sell saturated products.
Just be prepared for when the bottom drops out!
How to tell if a dropshipping product is saturated
Picking a winning product to dropship is every dropshipper's challenge, and, ultimately, you'll meet that challenge by doing your research.
That may include finding out if it's more profitable to sell a saturated product or a niche product that doesn't have as large a market exposure.
Can you dropship saturated products?
Many have had success with it, and some will even tell you how to do it.
Either way, you'll want to learn how to identify a saturated product while doing your research using four characteristics common to those products, which you can learn about in this article.
While sourcing cheap items through AliExpress isn't always a bad idea, keep in mind that it is the choice many make because it is the easiest.
For that reason, you'll have a lot more competition, requiring you to cut margins to stay afloat.
But if you choose unique or niche products, you'll automatically set yourself apart.
Discover ways to nicely brand and package your products, offer fast, efficient (and maybe free) shipping, and deliver excellent customer service.
You can be sure your product and your dropshipping method will still be viable in 2024 and beyond.
Reasons why dropshipping is still profitable
When people ask the question, "is dropshipping saturated?" I think what they really want to know is:
- Is dropshipping still a viable business?
- Is dropshipping still profitable?
The answer to these questions is a resounding; "Yes!"
And here's why:
1. Interest in ecommerce and dropshipping
Dropshipping is not dead, and ecommerce is here to stay.
The current interest shown in ecommerce, and dropshipping in particular, remains steady and has trended slightly upward in the past five years:
With global ecommerce revenues expected to rise to 3.6 trillion USD by 2024 and with the number of ecommerce customers on the rise, there are plenty of opportunities for dropshippers to make a successful dropshipping store a reality.
2. Emerging markets with purchase power
Emerging markets worldwide are a great opportunity for dropshippers because they are untapped, growing markets.
While ecommerce has barely scratched the surface of the global markets, it's estimated that emerging markets worldwide represent $22 trillion, one and half times China's GDP alone.
It's also been shown that as global incomes rise, ecommerce markets follow suit.
That's where you come in.
It doesn't matter where you live. You can dropship your products absolutely anywhere in the world.
Incredibly, in 2020 alone, Shopify merchants were responsible for creating over $20 billion USD in cross-border sales!
3. Increasing internet use and ecommerce users
The internet is becoming a bigger part of our everyday lives.
Internet usage is predicted to only increase over time. So, the more users, the better it is for dropshippers.
How do 5.3 billion internet users worldwide sound? That means 65.7% of the world uses the internet!
Are you somewhat convinced that it's possible you could capture just a fraction of that market and still make a profit?
Also, with ever-increasing internet speed, online shopping has become a daily pastime, not just a necessity. If you're like the average user, you're spending about 155 minutes per day on the internet, and it's not just because you have to. You want to!
In those 155 minutes, you can cover a lot of ground if you want to compare products, read reviews, compare prices, or "share" a product of interest with your friends.
Social media is our new mode of relating to one another and is why so many dropshippers successfully advertise on platforms like Facebook, Instagram, and others.
You can see how big this is, right?
If you take 155 minutes times the number of internet users, you know your potential to reach a sizeable market and a very profitable one.
4. The evolution of m-commerce
Mobile phone use (and tablets) is on the rise.
You know this from your own experience. How many people in your circle DON'T have a cell phone or tablet?
There's an excellent chance everyone you know has at least one and/or the other, including children.
For example, it was reported that just over half of all children in the US have a cell phone by the age of 11!
Why should you care?
Well, if you believe the adage "children are our future," these kids with cell phones are the next tech-savvy generation that will make m-commerce not just a new statistic but a matter of fact.
Your market awaits!
But we don't need to wait for the future.
How can your dropshipping store benefit from the early beginnings of the mobile tidal wave?
Again, the statistics speak.
US m-commerce sales have more than doubled in 2022 compared to 2019.
And if you advertise on a social platform like Facebook, inserting a "Buy Now" button on your ad means your customers don't even need to visit your website to make a purchase.
The mobile economy is booming and is sure to bring economic opportunity to dropshippers, even in a saturated market.
Conclusion
Is dropshipping too saturated?
I think the answer depends not on dropshipping or even dropshipping products so much.
I think it depends on you!
Are you the glass half-full?
A go-getter, willing to learn non-stop, do your research, learn from your "mistakes," and create a business focused on serving your customers.
Or the glass half-empty?
Do you run with the crowd, backing away from competition or copying it and unwilling to take on new challenges to keep your store current and relevant?
If you're the latter, chances are you won't make it as a successful dropshipper or as any business owner, for that matter, saturated market or not.
The facts are clear. Look around you, read the statistics, check out the competition, and you'll discover that ecommerce is here to stay - and dropshipping with it.
Consumer spending continues to shift toward online shopping versus shopping in brick-and-mortar stores...
Source: thebalance.com
Cynical naysayers (including the dropshipping gurus) will declare that the only money to be made in dropshipping is by selling courses to dropshippers.
But as our website proves, paying to learn dropshipping isn't necessary. Nor is it a sustainable idea because you can learn everything you need to know about dropshipping here for free!
What do you think? Let me know in the comments below!
Want to learn more about dropshipping?
Ready to move your dropshipping store to the next level? Check out the articles below:
- When Did Dropshipping Start? (A Brief History Lesson)
- Is Dropshipping Still Profitable Today in 2024? Or Not?
- Is Dropshipping Dead in 2024? (Unveiling the Real Truth)
Plus, don’t forget to check out our in-depth guide on how to start dropshipping here!
