14 Dropshipping Stats That Will Make Your Jaw Drop
Updated · Apr 29, 2022
You probably know a person or two who have suddenly made quite a lot of money.
They probably later told you they’ve managed to do it with this thing called dropshipping.
Rumors like that are circulating the web all the time as there’s the widespread opinion that dropshipping fortune is just waiting and everyone and anyone can achieve it.
Today, we shall explore the topic in-depth and see what’s the truth behind it. We’ll cover why, on the one hand, dropshipping is very lucrative, and on the other, how come some dropshipping stats suggest that success is far from guaranteed.
So is dropshipping worth it? Does it pay off? How many people manage to succeed, and how many fail? What’s the revenue of all dropshippers combined?
These are just some questions we’ll address today.
Impressive Dropshipping Stats (Editor’s Choice):
- All dropshippers in the world combined make around $159 billion per year.
- The dropshipping market will reach $243 billion by 2023 and will see a 28.8% rise in its compound annual growth rate in the next few years.
- Two billion people use dropshipping services globally.
- The profit margin for dropshippers ranges from 10% to 30%, while their success rate is between 10% and 20%.
- 23% of all online sales are dropshipping ones.
- Around 10% of Amazon sellers and 27% of online retailers employ the dropshipping business model.
- 66% of online buyers will choose a seller with the best shipping options.
- Possibly the most successful dropshippers are Pecka and Koenig, with $10 million in yearly sales.
- Print books might just be the next big trend, with $25.7 billion worth of sales, and rising!
What Is a Dropshipper?
We shall begin by covering the basics. First, we’ll learn what dropshipping is and how it relates to similar concepts such as ecommerce:
1. Dropshippers offer and sell products without keeping them in stock.
The business is essentially about reselling—you make an online platform and list all sorts of products on it (provided you have a deal with the manufacturer). Then sell the products and send all the necessary info to the producer (number of units, shipping destination, etc.).
Most dropshippers only deal with the online marketing and sales part—they have little or no responsibility for the manufacturing, storage, shipping, and delivery of products.
This practically eliminates storage costs and all the expenses coming from maintaining a physical store. It’s clear that the dropshipping model focuses on communicating directly with customers and manufacturers, acting as a sort of “middle man.”
2. eCommerce is a broader concept than dropshipping.
(Source: Science Direct)
Thus, the comparison “ecommerce vs. dropshipping” is not entirely correct. In fact, the latter is a part of the former, which subsumes all kinds of business activity going on online. eCommerce businesses often have their storage units and physical retail shops; sometimes, they even produce their own goods.
So how to start dropshipping? First and foremost comes the need for investment. For you to invest, you have to have a starting capital. Depending on the niche you’re looking to join, you can start with anywhere between $500 and tens of thousands of dollars.
Dropshipping Industry Statistics
Dropshipping is often something people do on the side, on and off, without really being incorporated into the tax system. As such, it’s a bit of a challenge to find reliable dropshipping stats. Here’s what we know:
3. The 2021 dropshipping market size amounted to $159 billion.
This market niche is growing steadily. In 2020, it was worth around $128 billion, while in 2022, it’s expected to reach $196 billion.
4. The dropshipping market is expected to reach $243 billion by 2023.
(Source: Statista; Grand View Research)
Here’s how experts expect this market to grow in the near future: 2023—$243 billion, 2024—$301 billion, 2025—$374 billion, 2026—$476 billion. Its compound annual growth rate is set to rise by 28.8% by 2025. This is one of the fastest-growing industries that will likely take an even more considerable proportion of ecommerce.
5. Typical dropshipping profit margins vary from 10% to 30%.
(Source: Shopify Blog)
This is how much dropshippers usually charge for their services. What do they do exactly? Dropshippers communicate with customers, receive complaints, process payments, and, naturally, advertise and sell the product. This is why many of them fail—they’ve underestimated their responsibilities, and, additionally, they reduce the profit margin to make themselves more competitive, thus making their business unsustainable.
6. 10% of Amazon businesses and 27% of all online retailers employ the dropshipping model.
(Source: Jungle Scout; Torch Bankz)
Almost one-third of all digital merchants is a pretty impressive amount. When we add the Amazon retailers, it gets even more so. However, let’s turn our attention to a pretty important question. What is Amazon dropshipping? It’s self-explanatory, really. It’s everything we’ve covered so far but performed on the Amazon platform. Dropshipping is not only allowed on Amazon, it’s much appreciated as the company even has an extensive guide on how to do it properly. What’s more, according to the newest Amazon dropshipping statistics, around 33% of online sellers say they use Amazon for their dropshipping “side gig.”
Can you dropship on eBay, too? Most certainly! In fact, all major online platforms allow it, as it helps drastically increase their profits. They demand you to declare yourself as the product seller on labels and such, and receive, process, and follow up with customer returns. That’s pretty important as communication with customers determines the success of most dropshipping businesses.
As it’s also mentioned in Amazon’s guide—even though dropshippers don’t deliver the product or manufacture it, they are still responsible for addressing any problems that customers may experience (delivery issues and postponements, product quality (as well as whether it arrives in proper condition), etc.).
7. There are two billion dropshipping customers globally.
(Source: Torch Bankz)
All these numbers show how prevalent dropshipping is—it’s truly become an indispensable part of online business and everyday life. When you’re buying something online, you’ll sooner or later come into contact with a dropshipper (who, in turn, will link you up with the manufacturer and get a commission fee).
How to Make Money Dropshipping?
Moving on to the important questions—can you make money dropshipping, how, and how many? Let’s see what these stats say:
8. Be wary of dropshipping courses with empty promises and a cost in the thousands of dollars.
(Source: Dropshipping Helps)
Often they are nothing else than a scam presented by “ecommerce gurus” with incredible dropshipping success stories who have broken the system and can help you earn $1 million in a month. You’ve probably seen their aggressive advertising. They could be successful in their field but, most often than not, are straight-up lying about their success and the opportunities before you.
Most talk in circles, giving empty promises, resulting in the realization that you can’t learn anything useful from them. It’s staggering how they can make endless amounts of courses, guides, books, chatgroups, personal consultations, etc. when they only target one thing—to make money off of those who want to join the dropshipping hype bandwagon.
If you're going to learn the ins and outs of dropshipping and are looking to turn it into a successful business, find reliable sources to learn from and get ready for hard work. That’s the recipe.
9. Dropshipping success rate is between 10% and 20%.
How much do dropshippers make? If you want to know, prepare for a rather disappointing answer. Most of them don’t really make any money; some are even at a loss. Unfortunately, it’s next to impossible to find objective and reliable info on the average dropshipping income. Shopify tells us that a dropshipper might expect to earn about $1,000 to $2,000 per month within the first year of operating. Remember that this is the total income, not profit, though.
Still, some people earn a lot more. Funnily enough, they don’t go around making scam courses but instead, continue to do what they do best—providing good services to their customers and making money.
All in all, is dropshipping profitable? It can be, though 4 in 5 dropshippers probably won’t see any profits. Fingers crossed, you’ll be the fifth!
People in this business are very aware of the next “current thing,” thus constantly modifying their offer to include the most relevant products. As they don’t produce the goods, it’s pretty easy for them to change the selection and focus.
10. 66% of buyers say they prefer sellers that offer better shipping options.
(Source: Dropship Lifestyle)
With all these options available, modern customers are notorious for being picky and carefully choosing the best offer. Dropshippers allow them to do just that by filling the gaps concerning customer service and logistics.
11. In 2021, orders for print books grew by 21.6%.
It may not seem like it, but print book orders online grew exponentially in 2021! The digital book market was valued at $25.7 billion that year. It looks like books will be a top dropshipping product for 2022. Keep in mind that the ecommerce behemoth Amazon went international by acquiring several online booksellers.
12. Similarly, orders for vinyl LPs grew by 25% in 2021.
You’ve most probably noticed that nowadays, people buy vinyl more than before. We should note that while the growth was no doubt spectacular, the starting point of vinyl LP sales was pretty low—practically no one was buying them since the 70s. The global vinyl LP market is now worth around $1.3 billion. Glad to see this trend has changed!
13. Cole Turner is one of the most successful dropshippers with $2 million in yearly sales.
His success didn’t come easy—he had to work hard for several years before he started seeing his sales increase. Also, keep in mind that we’re talking about $2 million in sales, not profit. Turner made somewhere around $200,000, which is still more than most people make in a year.
Nowadays, Turner has around 55,000 orders per year. He mainly uses Facebook ads to target his customers—he collects data, performs split testing, and invests further in advertising. He started with a general store and later focused exclusively on jewelry.
14. Andreas Koenig and Alexander Pecka make $10 million a year.
Koening and Pecka, too, didn’t make big money from the very start. However, their goals were pretty ambitious, and so were their efforts—they quickly found a niche (pet industry) that has worked like a charm.
Here are some of the lessons shared by Koening and Pecka on how to make money in dropshipping:
- Marketing—the reason dropshippers exist in the first place is that many suppliers and manufacturers simply don’t know how to (or don’t like to) deal with marketing. So take your time and plan how to reach your potential customers.
- Dropshipping is a business like any other—don’t fall for “Get $10,000 of passive income each month” lies. This is just another trick scammers use to take your money for “courses.” You have to invest time and energy into dropshipping and possibly work without much success for years.
- Market research—the typical dropshipping success story looks like this:
First, you go with the trends and sell what everyone else is selling. When you get to know the market better, you’ll start noticing niches with good demand and flawed sellers (e.g., flimsy-looking websites, inadequate or nonexistent customer service, inconsistent supply, etc.). All that’s left is to find a way to compensate for these flaws and reach out to potential customers via well-planned marketing.
Our quest to learn whether dropshipping is worth it is over (for now).
As you’ve seen, the dropshipping stats confirmed that only 10% to 20% of dropshippers succeed.
You also have to be aware of scammers looking to make the most out of your enthusiasm to grow and learn while giving nothing in return. However, dropshipping is a hugely rewarding business model with innumerable opportunities and useful sources online.
So if you’re looking to get into it, prepare for some hard work and patience, and keep an open mind. Good luck!
Garan is a writer interested in how tech reshapes the environment, and how the environment reshapes tech. You'll usually find him inoculating against future shock and arguing with bots.