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Don't compete for demand; Dam the demand

In the world of dropshipping, most stores are caught in a never-ending competition for existing demands. Pay-Per-Click (PPC) advertising serves as a prime example, where dropshippers bid on limited keywords to display their ads to consumers. While this approach seems logical and direct for generating sales, it can become increasingly costly over time. As ad costs rise, we find ourselves trapped in a race to the bottom, constantly battling on price and quality. In this "Pick me! Pick me!" struggle for demand, nobody truly wins except for the category leaders and advertising platforms.

However, there exists an alternative strategy: dam the demand. Instead of merely highlighting how your product is better or cheaper, focus on exposing the limitations of the legacy product and how your offering provides a solution.

Take Netflix, for instance. Rather than boasting about the quality of its shows, Netflix identified a pain point in conventional TV viewing: the restriction of watching shows only at scheduled times. What if you're unavailable during the appointed time? You're left with no choice but to miss the show—an inconvenience known as "appointment viewing" in the legacy show business. Netflix tackled this limitation head-on by introducing streaming, enabling viewers to watch shows at their convenience. Those seeking the freedom to watch shows anytime gravitated towards Netflix's streaming service.

By damming the demand for traditional TV shows and creating demand for their own service, Netflix didn't engage in a frantic "Pick me! Pick me!" competition among numerous show options. Instead, they focused on transforming how people watch shows. If you desire the flexibility to watch at your preferred time, Netflix becomes the natural choice. In doing so, Netflix successfully escaped the race to the bottom.

Now, you might argue that this approach may not work for dropshippers since we typically rely on ready-made products in the market, which have fixed designs and functionalities. It may seem challenging to dam the demand in such cases. However, a solution exists. When conducting product research, begin by exploring negative reviews of the legacy product and identify a product that addresses those specific concerns.

Undoubtedly, this alternate approach to competition is demanding and challenging, but it offers a way out of the rat race. Let us embrace this different approach in 2024 and strive to create new categories of our own.

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