BREAKING: The Coronavirus has claimed another victim, dropshipping is dead!
Before we get into this, I must acknowledge the fact that I still own an AliExpress dropshipping business and I still do have articles up showing you how to get started and how to make money with dropshipping.
However, it would be a disservice to you if I do not tell you about the imminent dangers that currently surround the AliExpress dropshipping business model.
In this article, I am going to share with you 6 reasons why I think dropshipping is dead (or nearly dying) however, I must stress that what I’m talking about here is the dropshipping method that uses AliExpress as a fulfillment method.
If you’re dropshipping using US-based products, to US-based customers, you may be alright (for now) but as you will see from my following reasoning, there may be some dangers that can probably bite you in the behind, if you are not careful.
Let’s start with the most obvious one which I think could be a major blow for the entire dropshipping-from-China business model.
I’m not going to lie, when I first heard of the Coronavirus, I immediately assumed it’s some over-hyped up “fake scare” for the media to talk about and for the governments of the world to assume more control to “fight the epidemic”.
While that last point is still up in the air, I must acknowledge that this Coronavirus scare seems to be more real than I initially expected.
I found this out the hard way when last week, I tried fulfilling a $300 order that came through my dropshipping store only to find out all items have been taken off the AliExpress marketplace.
This is because factories are closed down, the stock is running low and workers are not showing up.
There’s also the issue of shipping from China, which has always been a problem but was made worse with this outbreak (more on this later).
In my humble opinion, AliExpress dropshipping is in danger of collapse due to the Coronavirus.
I am still able to fulfill a few orders through AliExpress, but I’m not sure for how long this will be the case and I don’t know if it will get much worse before it gets any better.
This is a major blind spot for me, and when it comes to running my business, I’m usually not a fan of uncertainty and blindspots.
This alone has me thinking about possibly closing down my store for good or scrambling to find new US-based suppliers (which currently I have not found and probably won’t).
#2: Shipping Times Take Longer
If you’re just getting started with AliExpress dropshipping you may not know this, but shipping times from AliExpress to Western countries are horrendous!
(Of course, if you’ve been in this business for a while, you know what I’m talking about here).
On a good day – and if you find a good supplier – shipping can take 14 to 21 days to get to your customer, which compared to Amazon’s one-day shipping, is not a good position to be in.
I would be the first to admit that I’d much rather buy from Amazon than from my own store, and that is heartbreaking. You do not want to be in a business that doesn’t even meet your expectations.
Of course, the mass confusion to the global supply chains due to the Coronavirus doesn’t help either. We’ve already discussed there’s a major shortage of products, no workers in the closed-down factories and shipping times are all out of whack.
It pains me to say this, but this too – in my opinion – can be the nail in the coffin for the AliExpress dropshipping business model.
#3: The USA vs China Trade Deal
One thing you may also not know (if you’re not currently in this business) is that the trade war between China and the USA is already impacting the dropshipping business model.
In the past, you would’ve been able to get shipping from US-based Chinese suppliers and for some reason, these are all gone.
Also, you should know that even though there was a “major phase 1 deal signed” not too long ago, it doesn’t mean the trade war is over. This could go on for another 3-4 years till everything is ironed out.
I’m not taking sides here, but the theft of intellectual property from China must stop, which YES, would greatly affect the products available (for cheap) on a Chinese marketplace like AliExpress or Alibaba.
#4: Facebook Ads Prices Soaring
The business that can spend the most money to acquire new customers, is the business that will survive and thrive even in the worst of recessions.
While that’s very much accurate, the obscene rise in Facebook Ads costs makes Aliexpress dropshipping a very dangerous business to get into.
When I first started with dropshipping in September of 2017, I was able to run successful Facebook Ads campaigns with ease. Today, not so much. In fact, I don’t even run Facebook ads anymore. I get my traffic (and my sales) from free methods such as Pinterest and Google (SEO).
The rising ad costs + all the issues with shipping and a deadly virus on the loose should be enough to make you reconsider this business model (especially if you are starting with zero budget and zero experience) but wait, there’s more…
#5: Customers Are Fed Up of BS
When I got into dropshipping in 2017, the industry was not as “mainstream” as it is today. People were actually happy to see ads of products they like/need and they did not hesitate to hit the “buy” button on these products.
When they did, they were met with tremendously slow shipping times, rude store owners and cheap packaging with Chinese letters all over it (and in some cases, the real price of the product).
Many customers soon found out this whole thing is an orchestrated scam.
Then the gurus came, who made it sound like you can become a millionaire overnight by selling garbage “dog necklaces” to people for 1000X the price.
These promises of quick riches quickly brought in the amateurs with Bezos-levels of hopes and dreams. This contributed to the increase in popularity in dropshipping (thus competition increased) and bit by bit, the consumer confidence in these ads (that also just got incredibly expensive) slowly declined.
I guess what I’m trying to say here is that AliExpress dropshipping may not be dead yet, but it soon will be if these “diminishing returns” continue.
#6: It Was Never Meant To Be A Sustainable Business
Just like you were never meant to raise a family on a McDonald’s salary, you were never meant to build up a long-lasting legacy business with AliExpress dropshipping.
AliExpress dropshipping is a method to get you started, not the final goal. I say this because I too got this wrong.
Even though I was never that into dropshipping to make it my only online venture, I didn’t realize that to secure the longevity of my business, I need to get away from the Aliexpress fulfillment method – and I’m sure I’m not the only one.
While there are others who have done it right by finding US-based suppliers and leveraging the audience they built, many did not do this and thus;
Here we are on dropshipping’s death bed!
All these issues I’ve described above are what I think will cause AliExpress dropshipping to die off slowly, but surely.
I guess the biggest issue on this list is the Coronavirus, and while that may be solved tonight or in 3 years, it is proven to be a major pain-in-the-ass for drop-shippers.
Is Dropshipping Really Dead?
Can you still make money with dropshipping?
As I’ve mentioned at the beginning of this article, I still have my dropshipping store up and running receiving orders so yes, you can still make money with dropshipping.
All I am saying is that there are major issues we’re dealing with here (and plenty more on the way) so you may want to reconsider dropping $1000 on some BS dropshipping course.
While I’m still debating closing down the store, I probably won’t do it just yet as it’s still making me money BUT I am actively and urgently looking to make it an even smaller portion of my monthly income.
Once I see the store has become a single-digit percentage contributor to my monthly income, I may close it down.
These days, I’m happier to not get orders than getting orders and having to deal with absent suppliers, slow shipping times and angry customer emails.
That’s my 2c on this currently, I may change my mind again in the future and I hope I’m wrong about everything I’ve just said because at its core, dropshipping really is a beautiful business model and it is one of the three ways that have made me a substantial amount of money.