Dropshipping isn’t a new business model but the concept of selling products that you don’town yet is a growing trend for uprising companies. Also in Germany, the numbers of companies which use dropshipping as long-term strategy to get their profits is constantly growing.
Figure 1: Numbers of Dropshipping Companies in Germany
But what is dropshipping and why is it so popular these days? The concept of dropshipping describes a business model in which companies buy and order products only after a customer has placed an order. The advantages are clear: Lower costs for storing usage and sharp insights in the demand of certain product categories.
Due to these seemingly save advantages, many start-ups in Germany and other countries of the world are using the concept of dropshipping considering it as chance to hit the ground running in online business without risking a lot of equity capital. But let’s back to reality. Dropshipping isn’t always as easy and save as the countless seminars and courses about “getting rich in a blink” mostly promise and there are several risky pitfalls in this business.
Against all the optimistic and promising expectation of dropshipping, the so-called “hot tip for future millionaires” has some major disadvantages. The first and most important one is that dropshipping is – as mentioned before – an extremely popular topic in Germany and the world these days and that brings a problem called competition. If you search for dropshipping in Google, Bing etc. you will find 599 million results in about 0.48 seconds. Besides small companies you’ve never heard of before and bloggers that tell you about how they became “rich in seconds”, there are countless seminars, courses and vlogs about the greatness of dropshopping. The logical consequence for new dropshippers: Making a noteworthy appearance in Google results is actually impossible without spending hours and hours on SEO and SEA – and don’t get us started on financial aspects here.
“Dropshipping isn’t a concept for gaining money – just a trending term for young entrepreneurs describing a type of delivery. If you search for ‘dropshipping’ on Google, you’ll find several vendors promising an opportunity to gain ‘fast and easy money’. Gaining fast and easy money isn’t a realistic option in online retailing – it’s simply not possible.”
Jochen Fuchs, t3n.de
Without appearance and a proper reach on search machines like Google, your margins will be almost microscopic small. At the same time, you must manage and control many processes in parallel, keep and eye on orders and deliver a satisfying customer service.
To survive in the growing field of dropshipping in Germany, companies need to have good software solutions, a solid business model and first and foremost the will and courage to invest time, money and passion in the company. Just following the idea of the fast money will otherwise lead to into the complete opposite and the dream of getting rich in seconds becomes the nightmare of losing money and nerves in a blink of an eye.