Did you know that dropshipping has changed… a LOT? Go back in time with Sarah & discover how!
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Amazon Has CHANGED:
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When most people think of “dropshipping” they think exclusively about Aliexpress or Shopify. But dropshipping has existed WELL before both of these things. Follow Sarah on a journey back in time to discover the origins of dropshipping and how it’s changed…
The 60s & 70s: Dropshipping Before the Internet
Did you know that dropshipping actually began before the internet? It was kickstarted by mail order companies. In the 60s & 70s, companies were taking advantage of mail order catalogs, including large companies like JCPenny & Sears. It was very profitable for them, but it was a challenge to pick, pack and ship individual items out to customers.
The solution? They developed fulfillment warehouses that were specially designed to speed up this process (a lot of people think that Amazon FBA warehouses were the first fulfillment warehouses, but they aren’t – but they did revolutionize them and massively improve them).
When they created these, other exclusive mail order companies like CompuCard saw these fulfillment centers and knew that these represented a great opportunity: they could resell these items individually in their catalog and purchase them from these fulfillment centers. They did – and it worked. This was the first form of major-scale dropshipping.
The 90s: Dropshipping & the Dot Com Bubble
When the internet was introduced to the mainstream public in the 90s, it took a long time for consumers to feel comfortable purchasing items online and using their credit cards. But by the late 90s, ecommerce stores were starting to grow – and a lot of online stores like Pets.com popped up. They made big promises to investments, riding the wave of euphoria that arose from more and more people trusting online stores. These online stores like Pets.com raised millions of dollars from investors.
Unfortunately, these stores were not profitable: they were dropshipping from USA dropshippers that had become a lot more expensive over time due to increased shipping demands. And so by 2001, a lot of these stores went bankrupt as they were unsustainable, and the dot com bubble burst.
The 2000s: The Rise of Amazon.com & eBay.com
Two companies that survived the dot com bubble and burst were Amazon & eBay. These two sites revolutionized how individuals could sell online. No longer did you need to go through the technical, expensive process of creating an online store and advertising it. Now you could list your items on their site and let them drive the traffic for you.
For dropshipping, this was a huge boom. Previously it was very expensive to use dropshippers as not only did USA dropshippers charge a lot for their items, they had to spend an enormous amount of money during the store development and advertising phases. Facebook ads was not released until 2007, and it took several years for it to become as good as it is today. The only real option was Google Ads, which was and is very expensive. But now, Amazon & eBay advertised their website on behalf of individual sellers, which meant that dropshipping was now viable for anyone – not just large corporations.
2010-2018: The Chinese Revolution with Aliexpress, Shopify & Oberlo
In 2010, dropshipping was changed forever. Previously, working with Chinese dropshippers was complicated, which was why most individual dropshippers chose to work with USA dropshippers. But in 2010, Alibaba released Aliexpress: and made purchasing individual items from Chinese manufacturers & dropshippers as simple as purchasing an item from an online store via a checkout. It removed the language & cultural barriers, and made the whole process even easier than working with USA suppliers – while being MUCH cheaper!
In addition, Shopify arose during this time, which made creating an ecommerce store much easier. And then in 2015, Oberlo came out: a Shopify app that turns Shopify stores into semi-automated Aliexpress dropshipping stores. This was so successful, that in 2017 Shopify actually purchased Oberlo, and integrated the app even further.
And thus we arrive at today. Now we can dropship in our own stores & control our own destiny, because…
1) We have access to cheap dropshippers & items with Aliexpress.
2) It’s simple, easy & affordable to create professional semi-automated dropshipping stores with Shopify & Oberlo.
3) Traffic is simple & cheap thanks to Facebook ads.