Drop shipping has been gaining traction in the e-commerce industry over the past few years. Analysts said it will increase popularity in online selling despite opposition and scrutiny of its business model.
When drop shipping first emerged, many e-commerce experts expressed doubts over the non-traditional business model that it presented. However, it is expected to haul in more entrepreneurs this year as online training sessions for interested sellers increase.
Franklin Hatchett created the eCom Elites course for beginners who want to establish a well-planned drop shipping business. Tim Sharp also came up with a set of courses called the Complete Shopify AliExpress Dropship Course that new online sellers have been using in the first stages of their business development.
It is also expected that the drop shipping model will be popular among small and medium-scale online sellers largely due to its simplicity reduced cost offering. Furthermore, many entrepreneurs have testified of the ease in setting up online stores that rely on drop shipping.
Some analysts pointed out that this particular supply chain management model offers bigger chances of profit from the beginning. While every business poses a financial risk, drop shipping requires much lower costs compared to traditional store setups.
Traditional e-commerce stores may reach over $15,000 to establish, most industry experts said. On the contrary, a drop shipping model could require about 50 percent of the amount a businessperson will need for building an online store.
Meanwhile, online retail giant eBay has been cracking down on drop shippers through a number of policies. Account holders complained that they did not receive earlier notifications about the ban on drop shipping. Some accounts have reportedly been shut down while others saw their items being virtually invisible from the online store.
eBay does not restrict accounts that purchase products from retailers at a discounted price and sell the goods on the store as it is a form of arbitrage that sellers have been using in the past. However, eBay is against drop shipping models wherein the seller does not have the item in hand.
Despite crackdowns and prohibitions by some of the e-commerce world's biggest stores, drop shipping continues to gain momentum in the sector. The model is supported mainly by Shopify and Etsy, two of the most popular selling sites these days.
Other trends expected to rise in the e-commerce industry this year are continued use of social platforms such as Facebook and Instagram for selling as well as direct sales models that see brands pitching directly to their customers.
