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The current state of dropshipping? Plenty of problems and not much innovation, says Why Unified CEO Robert Nikic.
Waves of global supply chain delays, and even recent high COVID-19 cases in China — a major manufacturing hub for popular dropshipping providers — have led to closures, delays, and ultimately, disaster for the dropshipping space. And this is on top of common problems like quality-control issues and marketing challenges.
But don’t be fooled — consumers are well-aware. Thanks to these continued problems, buyers have their guard up when shopping online.
As a result of this failing model, dropshipping storefronts are closing left and right instead of innovating new solutions and creating newer models in the space.
How did the dropshipping industry get here?
Let’s start by looking at the dropshipping business model, and unpack what it is and how it works.
Dropshipping is a popular e-commerce fulfillment method in which a retailer doesn’t keep goods in stock. Instead, they transfer customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer.
While this method can be convenient and cost-effective for retailers, it also has its drawbacks. Aside from the supply chain and pandemic-related issues that are of-the-moment problems, the potential for delay is one of the most common.
Why Unified’s Nikic, says these delays combined with a lack of quality products are the reason why this model is actually outdated.
“In the dropshipping industry, there is really one spectrum,” Nikic explains. “For anyone that wants to get involved with dropshipping, typically they’re resorting to overseas suppliers like Ali Express or Alibaba who run into constraints of shipping times taking two to six weeks. Nowadays it can even take eight to twelve weeks to get a product you ordered online.”
Compare that to the ways in which Amazon has innovated its approach by offering quality products from U.S.-based sellers, backed by the company’s Prime shipping offering.
“Dropshipping lacks every fundamental that Amazon has, and the industry is paying the price as a result,” Nikic says.”
What the next generation of dropshipping looks like
The outdated model that is rife with issues is the reason Nikic has taken his company, Why Unified, in a different direction.
Why Unified is a platform designed to be a turnkey dropshipping alternative for those selling goods online. The company offers two-day shipping and provides access to brand-name products for dropshippers to sell. The platform also gives its sellers access to household products priced lower than retail — a needed approach during these inflationary times.
“We’re bringing the Amazon mode to dropshipping, stepping up to the plate and innovating the industry because no one else is,” says Nikic.
How does Why Unified bypass the same supply chain issues that hinders others? The company maintains direct relationships with brands and acts as a wholesaler. All logistics are managed by Why Unified and its partnerships allow the company to get goods to consumers faster.
“The products we carry are in the U.S. so we’re not sourcing from suppliers overseas,” Nikic says. And because of the company’s long-standing relationships, he says sellers are able to stock storefronts with products from the likes of Crest and Starbucks, offering margins of around 90-200%. In addition, Why Unified users are able to stock up on seasonal and trendy items quickly.
Started in 2011 as a marketing platform, Why Unified released its all-inclusive dropshipping platform to entrepreneurs worldwide in 2018. The platform offers marketing solutions including professional storefronts, logos, branding, product photography, order fulfillment, customer service, and payment integration.
And unlike other dropshipping platforms that charge users a fee for each sale they make, Why Unified runs as a monthly subscription service, allowing users to pocket 100% of revenue generated from product sales.
As we enter 2023 with continued supply chain uncertainty, and rising COVID-19 cases in Asia, Nikic believes that the industry is about to make a major shift from how it has historically done things.
Why Unified’s CEO predicts what’s next for dropshipping
Nikic offers has three predictions about where the dropshipping industry is heading:
1. Dropshipping will die
Consumers no longer want unbranded, not-as-described products that arrive three months after ordering. Nikic says new dropshipping models with faster shipping, and better access to higher-quality products will be introduced, straining international suppliers who continue to follow the traditional model.
2. Innovation will meet dropshipping
Dropshippers will be more inclined to innovate and change how they engage with customers, moving from being an invisible fulfillment provider to an online storefront where customer service and high-quality products are a differentiator. With platforms like Why Unified that is now possible, Nikic says, because the end-user gets great products quickly which builds trust and repeat orders.
3. Today’s dropshippers won’t be here tomorrow
Thanks to media influence and TikTok’s reach there is a false assumption that dropshipping is a way to get rich quickly without having to dedicate time, patience, and investment like any other business.
That will change, Nikic believes, because online consumers will demand it. The next generation of dropshippers will treat their e-commerce stores as a business, focus on building a brand, and recognize you get out of a business what you put into it.
