E132: Dropshipping vs. Private Labeling - A Friendly Debate

“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:

• Our own experiences in drop shipping
• Why I decided to stop drop shipping and sell my own products instead
• The pros and cons of drop shipping
• Too many courses from drop shipping “gurus”
• Reasons drop shipping is right for you
• Reasons drop shipping is not right for you
• What you need to do to survive with the drop shipping business model
• Is drop shipping really dead?

This has been an insightful and fun episode. Dave does’t come on the podcast enough, but when he does come, we usually debate about something we have different opinions on.

This episode will hopefully give you an insight to the two sides of the coin. In the end, the choice will be yours. What’s important is that you know what you’re getting into, and that you don’t buy into the hype simply because of the hype.

Resources mentioned:

MyEcomCrew State of the Merchant report CB Radios Trollingmotors.net Survivalfood.com E121: How Ezra Firestone Spends Money Growing His Businesses Global Sources Summit EcomCrew Hong Kong Mastermind

Thanks for listening to this episode. Until next week, happy selling!