COVID-19 stirred up the global economy and the e-commerce industry. Until today, economic changes are significantly affecting dropshipping. As dropshippers, this isn’t something to overlook—it can make or break your business.
But what exactly are these shifts to look out for? How are they impacting the industry?
In this blog post, I’ll discuss all of these and give you some tips on how to adapt to them. Stay updated to stay profitable!
Economic Shifts That Are Impacting Dropshipping
As of 2025, these changes are affecting how the dropshipping industry runs:
Lasting Effects of COVID
Although COVID-19 is already behind us, its effect on e-commerce is still shaping dropshipping today. It caused a massive shift and attention toward online shopping. It drove more people to buy online or start e-commerce businesses.
But despite this, it caused major issues like factory shutdowns, shipping delays, and product shortages. This forced dropshipping businesses to rethink how they operate.
Here’s how dropshipping has changed since the pandemic:
Dropshippers who adapted to these changes early are thriving, while those stuck in outdated sourcing methods are struggling.
Increased Tariff on Imports
Trump’s re-election brought increased tariffs of 10% for products imported from China, and a threat to impose 25% for products from Canada and Mexico. If you don’t know what this is, it’s the tax on imported goods. Unfortunately, many manufacturers in China produce a wide range of goods.
This increase results in the following consequences:
Increased Wholesale Costs
If you’re dropshipping products made in China, your suppliers will have to pay more because of the increased tariffs. This means higher wholesale prices for them. For example, if a supplier orders $100,000 worth of goods, they will pay an additional $10,000 due to the tariff, increasing their total to $110,000.
Increased Retail Prices
That increase can be too much for a supplier to handle alone. They will pass this increase on to the retailer, or dropshipper. However, these retailers will also increase their retail prices to maintain their profit margin. This means higher product prices for dropshipping consumers.
Dropping of Sales
If you increase your product prices, customers may decide not to buy them, especially if the price increases significantly. If most of your products are manufactured in China, you may see a decline in sales.
Inflation
Data indicates that the annual inflation rate in the US reached 3% in January 2025, up from 2.7% in November 2024. This means that goods and services are more expensive for all kinds of businesses. It’s still uncertain whether this will go up or down in the coming months but experts don’t expect it to go down any time soon.
Here are different ways inflation can affect your dropshipping business:
Shipping Costs
Inflation indirectly affects gasoline prices, which can increase the costs of shipping orders. When inflation impacts the production and distribution of gasoline, prices can rise significantly. Monitor this, especially if you dropship big high-ticket products. Remember, consumers consider the shipping costs they’ll have to pay when deciding whether to buy or not.
Purchasing Power
Inflation affects how much money consumers can spend on goods and services. As they spend more on necessities, their purchasing power for other things decreases. This is especially true if their income doesn’t increase with the rise of inflation.
Change in Consumer Spending
Employment, wages, and other economic factors are influencing consumer spending habits. Many spend less money than usual. This can be because of financial struggles or apprehension towards the current economic situation. These factors make consumers hesitant to buy goods and more cautious about impulse purchases.
For dropshippers, this can mean a drop in sales, especially for low-ticket dropshipping. You will have to compete harder in the market to attract buyers. This means changing your ways, from operation to marketing.
How to Adapt to These Changes as a Dropshipper
Economic changes are inevitable. As a dropshipper, you must adapt to stay competitive. Here are some tips on how:
1. Stay Updated
Monitor economic changes, domestically and internationally, along with trends. By staying updated on what’s happening, you can quickly make changes to your business and operations. You can follow experts and reputable news sources for these, like The Economist, The Wall Street Journal, and Financial Times.
If any economic changes directly affect your business, keep your customers informed. Be honest and transparent. Online shoppers will appreciate you more. Most of the time, they don’t like stores that simply increase product prices without explaining why.
2. Diversify Suppliers
To reduce the impact of increased tariffs on your business and customers, diversify your suppliers. Look for suppliers that manufacture their products in countries with lower or no tariffs, like India or Vietnam. With lower tariffs, your products will remain affordable for your customers.
Another aspect of diversification is focusing on domestic suppliers, which helps avoid tariffs and simplifies shipping. There’s less chance of delays so you can have happier customers.
3. Change Your Focus
Adjust your product selection to focus on higher-margin items. Again, to avoid and minimize tariffs, focus on selling products manufactured in low-tariff countries and the US. US-manufactured products may even give you tax incentives.
Look for domestic suppliers in your niche and start building relationships with them. Add more of their products to your store so customers are more likely to buy them.
If increasing the product prices is your only choice, focus on selling to online shoppers who have money to spend. In DSL, we focus on selling to the upper middle class—they’re more likely to have more money to spend despite the increase. Plus, since they are working people, they’re less likely to be affected by various economic changes.
4. Adjust Your Advertising
Change up your ads. Spend more on advertising products manufactured domestically or in low-tariff countries. This will help you build your authority in selling these items and potentially increase your overall sales.
Another option is to focus on advertising your best-sellers that aren’t impacted by tariffs that much. This way, you can save your money and focus on selling what’s already selling without the effects of increased tariffs.
Both of these strategies will also help you appeal to your customers more effectively. You don’t have to spend on products with increased prices, allowing you to cope with the changing spending behavior of consumers.
5. Upgrade Your Content Marketing
Consumers aren’t the only ones affected by economic changes. They also affect dropshippers and the competition. If you’re struggling with your budget for marketing and promoting your products, don’t forget that content is king. You don’t have to pay to put them out there.
Create video and written content for your website and social media. This will establish you as a trusted resource in the market. This will then improve your search engine traffic and get you potential customers without spending too much on campaigns.
Conclusion
To stay ahead of any economic changes, it’s vital to remain updated on policy changes and economic trends. This will help you make quick changes to make your dropshipping store adapt with time, such as:
Always ensure that you know what’s happening and what to do in such situations. This will help your dropshipping business stay profitable.
Do you have any questions? Drop them in the comments below!
