Muhammad Saleem

The drop-shipping sector is expected to take a hit due to economic sanctions being imposed by the United States.

Obeid Babar, who imports products from China, said that scores of people are earning through drop-shipping by sourcing products from Chinese entrepreneurs and selling them in the US markets.  However, he said following the sanctions, drop-shippers have to find ways to keep the ball rolling. “The US is imposing tariffs, and drop-shippers have to find alternative routes to land their products in the US markets,” he suggested.

He told WealthPK that drop-shipping has been a lucrative business for many entrepreneurs, as most of them are earning thousands of dollars by selling their products in the US markets. Explaining the drop-shipping model, he said that it is a type of online retail and wholesale business, where sellers list products of others. “The sellers do not need to maintain inventory, instead they just place orders to suppliers who then ship products directly to customers,” he explained.

“It's a golden opportunity for many, as it allows entrepreneurs to dip their toes into business with just knowledge of e-commerce and digital marketing,” he said, adding that it does not require huge investments. Babar said that the US remains a big market for drop-shipping, but the sanctions being introduced by the Trump administration could deal a heavy blow to this sector, at least for the time being.

Mohsin Ali, a digital marketer, told WealthPK that US economic sanctions will directly affect drop-shippers' access to its markets, leading to a decline in their incomes. He said a good number of Pakistanis are earning handsome amounts through drop-shipping multiple products. “Through digital marketing, these sellers are targeting their niche markets and attracting customers efficiently.

However, the sanctions will increase prices of products and marketing costs,” he warned. He said that cost-per-click is higher than in other developed nations. “Drop-shippers are paying the heavy marketing costs, knowing their buyers have deep pockets.” Ali acknowledged that profit margins in the US markets are high, but now his clients are pressing him to find methods to cut corners and lower the marketing costs.

“They have to reduce marketing expenses, as they believe that sellers will jack up product costs due to shipping through alternative routes,” Ali said. Babar, who imports products from China, said that long delivery times will shake customers' trust and the situation will ultimately bring the business to its knees.

He said that the drop-shipping business relies heavily on global trade, and any restrictions on suppliers could impact product availability and affordability. He suggested that drop-shippers expand into European and Middle Eastern markets, where there is plenty of room for growth.

Credit: INP-WealthPk