Running Your Dropshipping Business During The COVID-19 Pandemic
Editor’s note: This is a guest post by Demi Li, content marketing specialist at CJDropshipping.
The global economic impact of COVID-19 has had a dramatic impact on the eCommerce industry, which is now dealing with supply-chain problems, including delayed shipments, manufacturing losses and a decrease in orders. For dropshippers, the pandemic creates several challenges, as well as a few opportunities for maintaining and growing your business. Here, we’ll explore the best ways for running your dropshipping business during the COVID-19 pandemic.
The Impact of COVID-19 on Online Shopping Habits
According to Statista’s COVID-19 Daily Barometer, which measures lifestyle changes in China, Germany, the United Kingdom, and the United States, the pandemic has resulted in a spike in online shopping. Among those surveyed, 62% of Chinese respondents, 45% of Americans, 33% of those in the UK and 26% of Germans shop online more than before the pandemic.
Meanwhile, according to SaaS platform provider Quantum Metric, online sales from select brick-and-mortar stores have increased by 52% compared to a year ago, while conversion rates have gone up by 8.8%.
The product types that have seen the highest increase in sales are largely health-related, including face masks, hand sanitizer, disinfectant wipes and vitamins. Additionally, sales of products such as instant food, toilet paper, home cleaning tools, and other home items, as well as personal items have increased tremendously.
Sales Restrictions on Personal Protective Equipment (PPE)
Starting in March, major social media platforms and search engines, including Facebook, Instagram and Google, have stopped displaying sponsored content for personal protective equipment (PPE) related to COVID-19. Major online marketplaces, such as eBay, Amazon and Shopify, followed suit, banning the sale of masks, hand sanitizer, disinfectant wipes, etc. While eBay and Shopify pulled down all ads related to coronavirus, Amazon said they will continue allowing the sale of existing stock, but not allow sellers to upload new inventory. While some sellers have attempted to get around these restrictions using such tricks as hiring influencers to promote their products, most platforms have pledged to detect and remove these promotions.
Why Are Platforms Removing Ads and Products Related to COVID-19?
There are three reasons that platforms decided to pull down ads and products related to COVID-19:
- Many users are taking advantage of the pandemic and dramatically increasing the price of their products.
- There is a lot of PPE that has not been approved by the FDA and do not meet the standards for effective protection from COVID-19.
- It’s been argued that selling these products online indirectly causes a shortage of protective equipment for health workers working on the front lines combating coronavirus. Sellers may be hoarding products trying to make a profit, instead of sharing these scarce resources.
Increased Shipping Fees and Shipping Delays
The COVID-19 pandemic has resulted in an increase in shipping fees to most countries by 40-60%, with additional increases expected if the situation isn’t alleviated soon. This is because many commercial flights have been canceled, with those remaining being used to transport medical supplies, instead of non-essential products.
With limited cargo space and a constant increase in demand, carriers hope that the increased fees will be prohibitively expensive for sellers working with non-essential items. In addition, governments throughout the world are tightening their borders, further limiting the number of incoming and outgoing flights and creating additional shipping delays
Until we see signs that COVID-19 is being contained, these delays will likely increase and another shipping fee surge is to be expected.
What Dropshippers Can Do
Given the current situation, many dropshippers have chosen to suspend their business. Others, however, are looking for a way to take advantage of the decrease in competition and carve out a new niche for themselves. If you’re looking to expand your business, the following suggestions might be of some assistance.
Optimize Your Product Line
With sellers mainly restricted from selling PPE, you’ll need to look into other niches to determine which product lines are most likely to sell.
A recent report from Stackline illustrates the fastest growing & declining categories in e-commerce in March 2020. The report shows that the US eCommerce structure has changed dramatically amid the lockdowns throughout the country. Consumers are shopping online more, with sales of groceries, toilet paper, home cleaning items, and other home apparel increasing sharply.
With gyms largely closed during the pandemic, there has been an increase in demand for home fitness products. According to a report from Adobe Analytics, online sales for fitness equipment increased by 535% from February to March this year, compared to a 70% increase during the same time frame in 2019.
Additionally, as more people are encouraged to work from home, the demand for desktop accessories is increasing while the sales of suitcases, cameras, and clothing has gone down, as many people are canceling holidays.
Market Your Products Accordingly
With most eCommerce platforms banning the sale of PPE and the increase in shipping costs and delays, many dropshippers are simply suspending advertising. Before giving up, however, you might want to try some of these marketing suggestions:
- Email marketing campaigns – Email marketing is an effective way to sell products, educate your customers and build loyalty. Particularly in eCommerce, email marketing is an excellent tool for sending transactional, promotional and lifecycle messages. Email isn’t subjected to the rules of centralized platforms, where unplanned tweaks to algorithms can completely derail a distribution strategy. It is a great tool when your marketing strategy on other platforms is limited.
- Expand to other products – There are plenty of in-demand products that you can still market on Facebook and other platforms. The Stackline report referenced above is a great place to start when looking at new products to sell.
Find more winning products on CJDropshipping
- Expand to new territories – If you are not able to sell products in your area, change your target market. Because you are not handling the products in person, suppliers can deliver your products to wherever you would like. Just beware of potential language barriers when moving to unfamiliar territory.
- Keep in touch with your suppliers and customers – It’s important to stay in touch with your suppliers or agents to make sure things stay on track, even if there is a sudden change to your shipping, manufacturing, etc. Let your customers know that they might not get their purchases on time, and pay attention to after-sales service, which will make or break your business.
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Demi Li is a content marketing specialist at CJDropshippping, focused on coaching dropshipping beginners on marketing.