In the classes of "Business Models That Work on the Internet" that I teach in entrepreneurship centers in the province of Barcelona (Recull Program of the Barcelona Provincial Council), there's always someone who asks me: "Montse, what about dropshipping? Does it work?" And I answer with a smile: "It works, yes, but only if you know what you're doing and accept that the competition is fierce."
Now, with the latest movements in the international market, I could add: “…and enjoy it while it lasts, because the landscape is changing rapidly.”
The coup de grace from the United States
The news is from this week: The United States has eliminated the tariff exemption for low-value international shipments (de minimis), a rule that until now allowed products under $800 to be imported tariff-free. Starting August 29, 2025, any package, no matter how small, will be subject to tariffs (for packages originating in China, this was already the case in May 2025).
This change not only affects giants like Temu, Shein, or AliExpress, but also thousands of small entrepreneurs who based their model on shipping products from Asian suppliers directly to American customers. At the business model level, we call this "Dropshipping«. Costs will rise, and with them, the simplicity with which we could compete solely on price will disappear.
The US government justifies the measure on two grounds: to combat the entry of synthetic drugs and to protect the local industry. Both reasons are understandable, and I agree with them… but the impact on digital businesses will be enormous.
Europe: breathing for now… but not for long
In Europe, the law still allows imports of products under €150 without paying tariffs (although VAT is still payable). However, the European Commission is already working on a reform to eliminate this limit. When it happens (because it will), the situation will be very similar to that of the United States.
European entrepreneurs now have a window of opportunity to prepare. Those who wait for the storm to hit will get wet.
A few months ago, in one of my classes, a student told me how he'd created a dropshipping store selling gadgets he found on AliExpress. He was excited because "he didn't touch any products" and "the margins were brutal." I told him, "Enjoy it, but don't sleep, because everything that's easy doesn't last long." Last week, he wrote to me: he told me that if there are new costs, his profits will practically disappear, and in this type of business model, you end up competing on price. But he also told me that, thanks to what we discussed in class, he was already looking for European suppliers and working on his branding. That's the spirit we'll need in the coming years.
What now? How to survive the post-dropshipping era
The end of dropshipping isn't the end of e-commerce. It's just the end of an overly simplified version of the model. Adapting is key:
- Diversify suppliers. Working with local or European suppliers can save you from tariffs and shorten delivery times. For example, Aliexpress has a filter that displays only local suppliers.
- Check your margins. If you have to pay more, you'll have to sell better, not just more expensive.
- Bet on added value. Branding, user experience, warranty extensions, after-sales service... it's no longer just about selling a product, but about offering an experience.
- Explore other models. He print-on-demand, for example, remains viable because it's produced locally and avoids these issues. It's a variant of dropshipping that won't be affected by this change.
- Stay tuned for changes in Europe. If the EU follows in the US's footsteps, you'll need to have a Plan B ready.
A change of era
When I teach business models, I always say that the internet is like a river: it's never the same and always flows. Dropshipping as we knew it is coming to an end. It won't happen overnight, but it's no longer the easy and profitable model that many sold as a magic formula.
This isn't a bad thing. Businesses evolve, and the entrepreneurs who survive are those who reinvent themselves. What's coming next is more demanding, but also more interesting. Those who know how to add value, create strong brands, and adapt will emerge stronger.
Are we witnessing the end of dropshipping? Dropshipping won't disappear completely, but its golden age is fading. And, as I always tell my students: When one door closes, another opens... you just have to have the courage to look beyond.
If you're keen to get started, I wrote this article a few weeks ago explaining how ChatGPT can help you, check it out:How to Automate Revenue with Artificial Intelligence – Ideas for Concerned Managers«
The original U.S. government article can be found here: https://www.whitehouse.gov/presidential-actions/2025/07/suspending-duty-free-de-minimis-treatment-for-all-countries/
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