If you’re thinking about starting dropshipping, or already doing dropshipping, you’ll definitely want to read this article. While it might have been worth it to do dropshipping back in 2015, it no longer works as a viable strategy anymore.

You might have enticed by gurus (that wants to sell you a course) that dropshipping is the end-all, be-all and you can make a lot of money with fairly little effort online.

This can’t be further from the truth. If you decide to pursue dropshipping as the way to make money, you’ll likely end up frustrated and your income will be an even crazier roller coaster than if you had just went all-in on crypto shitcoins (but unlike crypto, you won’t even have a chance for an insane upside with dropshipping).

Why Dropshipping Isn’t Worth It Anymore

Dropshipping is completely dead because it has no longevity.

By definition, you’re trying to charge more for a product a customer can easily get themselves on AliExpress. And instead of providing any value, your customers have to wait 2-4 weeks (sometimes 6-13 weeks due to the pandemic) to get their products.

Would you personally wait 6-13 weeks if you bought something online to get your product? Hell to the NO!

People like you and me are spoiled. We expect are stuff to arrive within 2 days. In fact, I expect mostly for stuff to arrive within the next day with Amazon Prime nowadays. And within 3-4 hours if I’m buying on Amazon Fresh. Worst case: you’ll wait a week for a product to arrive. So how do you expect to build a sustainable business when your customers have to wait up to 30 times longer than your competitors shipping similar products? Answer: you can’t.

The other thing that really sucks about dropshipping is its an old game: more and more people understand and know what dropshipping is nowadays; it isn’t 2015 anymore. Most businesses thrive over time and can thrive by reinvesting in itself. Dropshipping is the opposite: as more and more people know about it, your customer base shrinks. Can you think of any business with any longevity where the customer base actually will shrink over time? I can’t.

Lastly, you have no differentiation with dropshipping. Sure, you can make a pretty website and call it a “brand” – but stop fooling yourself. A brand isn’t in its logos or color schemes: it’s about how customers are engaged and treated over the long run. And without differentiation and a low-barrier of entry, any illusion of a ‘brand’ will be found out after your first 100 customers.

There’s also no barrier of entry because literally anyone with an internet connection can order the same exact item that you’re marketing on AliExpress or Amazon or Ebay or TaoBao. Your only customer base are people who are too lazy to do a reverse image search or any sort of due diligence. People usually don’t like departing with their hard-earned money so that customer base is fairly small to begin with.

So if you’re going to ship things much slower than your competitors, not going to sell anything unique, have a crappy website anyone can build nowadays on Shopify…the only differentiation your dropshipping business will have is that it sucks a lot more than the average business.

In sum, massive competition with very little differentiation and an extremely shallow moat makes dropshipping not worth the effort anymore.

Here Are Some Numbers

Depending on who you ask, the statistics around success rates for e-commerce and dropshipping is pretty different.

According to CoffeeZilla, Amazon FBA (a fair proxy for dropshipping, since a lot of folks dropship with Amazon—except Amazon FBA is more of a real business since their customers don’t have to wait a month for their product to arrive) will make $75K+ profit 2% of the time: https://bit.ly/3rjDsg8

According to Matt Harward, a speaker at an E-commerce conference I attended whose credentials are questionable, he made this chart:

(this data is questionable because he never gave a source for this info—he also mentioned he has 6 successful brands, but doesn’t actually mention any of them which is pretty suspicious).

For a business to be “successful”, you probably would want to scale it to $1MM+ for 1 year+. This is because, at scale, your margins will be between 10-20% which means your take-home pay would be roughly $100K to $200K. After taxes in the worst states (California, New York), you’re pocketing between $50K to $100K a year. So according to the stats above, you have around an 11.2% chance of building an e-commerce business in general, which implies a smaller percentage if you were to dropship (which is pretty optimistic if you ask me).

From my own experience, I’ve tested over 100 products and have build 13 websites – from niche websites, to general stores, to one-product stores…only 1 website and 1 product has worked thus far. And it only barely works. I’ve tested Facebook ads all kinds of ways and Google ads…and only 1 product kind of is working. And by “kind of” working, I mean it is on the verge of scale but we still haven’t scaled yet after a year of our lives dedicated to this product. Building a business is hard. Building a sustainable business is even harder.

Don’t believe me? I’ve got even more math for you to show you why dropshipping as a model isn’t worth it at all. There was a cool guy named “Kevin Zhang” that was spouting some shit about how dropshipping is the second coming of Christ back in 2020. So…I took his course, and in his course, he claimed that he has a 25% success rate. This is actually utterly false. He forgot to censor out some of his folders in his course and I screencapped it back in May of 2020:

I then searched every website to see if it exists and…pretty much only one store exists, which is “arctic parka”:

Kevin Zhang, according to this sample, is 1 for 13. Note: I did this research in 2020, and “arcticparka.com” no longer exists. So in a 3-year timespan, he’s 0 out of 13.

Gabriel St-Germain, another influencer in the dropshipping space hasn’t had a new video in 2 years. And his reason for stopping is so he can work on ‘long-term’ projects.

Read between the lines: dropshipping is a short-term project. It isn’t sustainable. And in his course, he talks a lot about ad fatigue and products “dying off” after a few months.

OK, next influencer: VerumEcom. They admit also in their course that you have to keep testing new creatives in order to keep up. There are a few case studies:

https://mosquitotrapx.com/ and https://mr-posture.com/

What do these 2 stores have in common? They no longer take orders when you go to checkout:

AKA, these sites are kept up for students in their course as a case study but don’t produce revenue. If these dropshipping stores were good for the long-term, why did they shut it down? Do they hate money? Of course not – they’re selling courses! So the only conclusion is that once-upon-a-time these stores were profitable, but now these dropshipping stores aren’t even worth upkeeping since they’re so unprofitable.

I’m not sure about you…but if you’re going to get into a business where your life, and your family’s life, could potentially depend on that income, odds of 7.6% (1 in 13), 11.2%, and 2% is unacceptable. It’s virtually guaranteeing you will fail – not just in dropshipping, but in e-commerce in general.

Further, it makes no sense to me to bet enormous time and effort to something that not only has such a small probability of success, but also pretty much shown in every single example of due diligence that dropshipping has no longevity, even if you do manage to get some initial success. The gurus say so themselves after you’ve purchased their course, and even if they don’t – if you look at their case studies or do due diligence on their websites, you’ll find that none of them exists anymore.

In fact, if you learn nothing from these questionable statistics, at least take away this: don’t trust anyone on the internet that’s trying to sell you a course – all their numbers are skewed. People on the internet claiming revenue numbers trying to sell their course is akin to a criminal claiming extraordinary returns in their ponzi schemes. 200% per week? Sure, buddy. Sure. But that’s another post.

I don’t have anything against dropshipping if it still works. But just looking at the concrete evidence on not just my own results, but also these so-called gurus’ results, one thing is clear: dropshipping isn’t worth it anymore and is not a long-term strategy.

…But You Can, And Should Still, Dropship

So what have we learned here? Dropshipping is bad and isn’t worth it.

But you should still dropship. You’re probably thinking to yourself: “WTF?” but allow me to explain.

Dropshipping is an extremely short-term “business” (if you can call it that), and as such it is a useful tool to use as a short-term test to see if your product has some viability for product-market fit. For example, if your run some ads and you run into initial success the first week, with say, 10 customers on a 4 ROAS, stop selling immediately and just purchase the product in bulk to the US so you can at least provide 2-5 day shipping for your customers when your bulk purchase arrives in the US.

In other words, dropshipping is a great tool to do an initial stress-test for a product so you can justify the inventory risk. After that, you convert your business to a regular ‘legitimate’ e-commerce business and scale from there.

In conclusion: dropshipping long-term is like trying to go over the speed limit by 50 mph in the long-term: you’ll go very fast at the beginning (as you do quick product tests), but you’ll be dead soon enough (you’ll have more chargebacks than any payment processor would allow).

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