This episode dives into a timeless debate: dropshipping vs. private labeling. While highlighting the unsustainable nature and razor-thin margins often associated with dropshipping, the hosts also acknowledge its persistent popularity and potential for niche opportunities. This discussion is crucial for ecommerce operators considering business models, urging them to weigh long-term brand building against short-term gains and market trends.
Key takeaways
Dropshipping, despite prevalent negative sentiment and low margins, continues to attract significant interest, with Google searches tripling between 2016 and 2018.
While dropshipping may offer initial opportunities, a private label brand strategy is generally more sustainable and conducive to long-term growth and higher profitability.
Evaluate the long-term viability and potential for brand building when choosing between dropshipping and private labeling.
Understand that widespread content questioning a business model (like "is dropshipping dead?") can paradoxically indicate increased public interest and search volume.
Consider the overhead and logistical complexities of each model: dropshipping often means lower upfront investment but less control, while private labeling involves more inventory and brand development but greater control and margin potential.
"Is drop shipping dead?" - so many blog posts in 2018 We've recently encountered a paradox of sorts. If you type "is drop shipping dead" in a Google search bar and hit enter, you'll notice that the first page is chockfull of blog posts with that exact same title. This could only mean that people are catching on the thought that the drop shipping business model is pretty much in a bubble, and if it hasn't already burst, it's most certainly about to. The arguments on those blog posts against the merits of drop shipping echo our own. That is why we focus on a business model that is sustainable and won't go anywhere anytime soon—building a brand through private labeling. Then Dave stumbled upon something interesting while doing some research for a blog post. He found that the average monthly Google searches for "drop shipping" was about 400k in 2016 when drop shipping was at its most successful. Come January 2018, and the searches for the same phrase was at a whopping 1.2 million. If blog posts are questioning the merits of drop shipping, why is there an increased interest in drop shipping? This issue caught even more of our attention when someone from a site selling drop shipping courses reached out to us asking to come on the podcast. If this site is earning more than $3 million dollars, is drop shipping, in fact, not dead? Interestingly, Dave and I have different opinions about this. I believe that drop shipping is not sustainable with very razor thin margins and is not worth it. Dave, however, thinks that there is still some opportunity left. So we decided to take it to the recording studio and have a debate about whether or not drop shipping is dead, and if private labeling is definitely the way to go. This episode is the result of that debate. Some conversation points: <li
Dropshipping, despite prevalent negative sentiment and low margins, continues to attract significant interest, with Google searches tripling between 2016 and 2018.
What does this episode say about supply chain & operations?
While dropshipping may offer initial opportunities, a private label brand strategy is generally more sustainable and conducive to long-term growth and higher profitability.
What does this episode say about brand & content?
Evaluate the long-term viability and potential for brand building when choosing between dropshipping and private labeling.
What does this episode say about dtc strategy?
Understand that widespread content questioning a business model (like "is dropshipping dead?") can paradoxically indicate increased public interest and search volume.
What does this episode say about dtc strategy?
Consider the overhead and logistical complexities of each model: dropshipping often means lower upfront investment but less control, while private labeling involves more inventory and brand development but greater control and margin potential.
