Selling products that someone else keeps in stock sounds like a blessing for a lot of online retailers. It’s no wonder then that dropshipping, as the practice is known, has been gaining momentum, especially with the pandemic forcing us to shop online more than ever. If you’re wondering if it’s also a good choice for you, these dropshipping statistics will help you find out. Alternatively, you will get some insight into how to improve your online venture if it involves dropshipping. Stay tuned!
A third of online businesses have adopted dropshipping sales as their primary model of work. That comprises even giant retailers like Wayfair and Amazon. Many companies, in fact, started as dropshipping businesses, meanwhile growing enough to support their own fulfillment operations.
Forrester’s Research findings state that retailers complete nearly a quarter of online orders using dropshipping methods. This translates into $85 billion in sales on a global level, underscoring the growing popularity of this model.
The average dropshipping profit depends on many factors. However, one thing is certain. The manufacturers using this business model experience higher profit rates than others since they can easily broaden their available market.
According to dropshipping stats, retailers who use this business model could reduce expenses by a lot. But it doesn’t stop there. The average dropshipping profit margin is much higher too. They have the potential to be 50% more profitable than those who work with an onsite inventory.
The dropshipping success rate is contingent on manufacturers and suppliers, as well as reliable dropshipping software. Therefore, it’s important to find suppliers that match the retailer’s ideas of customer service and quality. Then, the supplier should also be able to scale up alongside the retailer, dropshipping suppliers statistics show.
Consumers crave options and flexibility. Two-thirds of consumers would choose a competitor over an online retailer that doesn’t allow multiple shipping options. Dropshippers, therefore, need to offer different methods and, where possible, free shipping.
The number of people who buy things online, both goods and services, is constantly rising. There were about 2.14 billion buyers who purchased things online in 2021, up from a “mere” 1.32 billion back in 2014.
The success rate in dropshipping varies. According to data on top dropshippers, it’s about 10-20%. However, this doesn’t mean that many businesses fail, it simply refers to the fact that many people enroll in this model of sales without properly understanding it. It’s one of the most popular online businesses, ecommerce stats show, yet, people still need to be patient and don’t expect to get rich overnight.
Even though the main trigger for the expansion of online shoppers was the pandemic, easing the restrictions is not reversing this situation statistics on dropshipping and ecommerce show. In fact, more than half of people will continue shopping online even more after it is over. About 29% of people are doing all of their shopping online now. Further 49% claim they will continue to do most of their shopping online after the pandemic has ended. During the pandemic, about 43% enrolled in a new subscription, and 88% of them plan to keep it.
The manner and speed of shipping are pretty important for a successful dropshipping venture. Other than two-day shipping, many consumers have preferences for free shipping (42%). Another 33% of shoppers have expectations for fast shipping, dropshipping statistics show.
A lot of dropshipping marketing lately revolves around sustainability. Mostly, because this is what customers are looking for. For 66%, sustainability has become more important to them due to the pandemic. The most important practices in this domain according to the consumers are recycled packaging (64%), eco-friendly shipping (41%), and “green” brands (30%).
According to ecommerce and dropshipping stats, millennials are the largest group of online shoppers in the US (20.2%). Following in their footsteps, 13% of those 18-24-year-olds are also quick to shop online. Next, those aged 35-44 account for 17.2% of digital buyers, followed by 15.5% of 45-54-year-olds. Finally, 14.6% and 14.4% of online shoppers in the US are between 55 and 64 years old and over 65, respectively.
Dropshipping sales go hand in hand with social media marketing, dropshipping statistics indicate. Those stores that have active social media accounts on Facebook and Twitter have one-third higher sales than those that don’t. Besides generating more traffic to the store, social media marketing improves brand awareness.
Too high, or hidden shipping fees often sway consumers from completing their online orders. Other reasons often include discount codes that are not working (46%), orders that take too long to ship (36%), needing to re-enter card data (30%), or having to re-enter shipping information (25%), dropshipping stats.
That translates into $100,000 yearly earnings. The average dropshipping monthly income meanwhile stands between $1,000 and $5,000. The rest of the money goes to marketing, website hosting, purchasing products from manufacturers, etc.
Consumers are more likely to believe other people’s testimonials than what brands post about their products. Online reviews play an important role in reassuring customers that a product or service both looks good and does what it was intended to.
Dropshipping industry statistics show only 14% of shop owners registered on the AliDropship platform go for a more general store, even though they don’t need to worry about things like storage. The majority bet on niche products.
Dropshipping is sometimes compared to affiliate marketing; however, it tends to yield more profits, or 20-30% vs. 3-10% for affiliate marketing. One exception includes digital products like online courses and SaaS, where affiliate marketing profits go from 10% to 50%.
The latest data indicates that the market for this business model is forecast to hit $196.78 billion in 2022, marking 23.7% year-over-year. The dropshipping market size, however, is projected to grow further, potentially exceeding $200 billion in 2023 ($243.42 billion). In 2024, the forecasts place the market at a staggering $301.11 billion.
Consumer spending on perfumes, cosmetics, skincare products, etc., is driving this segment. Dropshipping market statistics show that the fashion segment is anticipating strong growth in the same period due to globalization and changes in consumer spending. An increase in spending on furniture products has boosted the furniture and appliances segment as well.
(Grand View Research)
If we look at dropshipping worldwide, the Asia Pacific accounts for about a quarter of the overall revenue in this ecommerce model. Online retailers have been expanding in the region, courtesy of smartphone-enabled internet connectivity accessibility.
(Grand View Research)
The second, fastest-growing market, China is bound to reach $136.7 billion by 2027, dropshipping industry statistics reveal. Canada and Japan are two other important players in the market, with forecasts for 21.6% and 19% CAGR between 2020 and 2027, respectively. In Europe, Germany is the leader with estimations of 20.3% CAGR in the same period.
(Research and Markets)
The North American market in this segment is divided into several areas based on the products that most dropshippers sell, including hobbies, DIY, and personal care products. The success rate in dropshipping for electronics has pushed this segment to first place.
The average dropshipping income on Amazon varies. However, it can go up to $50,000 per month if the retailer is committed enough. That said, many Amazon dropshippers quit early because the competition is harsh, and initially they tend to have low profits. But patience pays off, so those who endure, have strong chances to grow their business on the ecommerce giant.
Dropshipping statistics reveal that about 50% of all units sold on Amazon originate from third-party sellers. Since Amazon hit record sales of over $100 billion in Q1 2021, the opportunities are extensive.
This platform has the largest number of sellers, with the figure having doubled since 2017. Stats further show that the platform is adding 3,718 sellers daily.
More than half of that 50% of third-party sellers on Amazon are dropshippers. The amount of money they contributed to the ecommerce giant’s total revenues was about $95.37 billion in 2019.
The math shows that those in the top 10% of eBay dropshippers get pretty close to earning six figures a year. Most people who work as dropshippers on this platform do it as a side job, so it makes it quite a profitable business.
In line with the latest dropshipping statistics, not many dropshippers earn as those in the top 10%. However, the fact that 25% of them earn about $1,000 per month isn’t bad, since it’s mostly their side job. The average dropshipper on this platform earns about $2.67 in profits on each sale. For the top 10%, it’s higher ($3.64 per sale). Alternatively, those in the bottom 10% register losses. Namely, they lose about $2.53 on each sale.
Apparently, dropshippers on eBay process 969 orders each month, making $2,587 in monthly profits. Some handle even more, like the top 10% of dropshippers, who handle 4,759 orders monthly, making about $12,706 per month.
With the rise of mobile and ecommerce, more and more retailers are shifting toward online business models, especially dropshipping. The ease of starting this type of business is another contributing factor that fosters a growing market. Hopefully, these dropshipping statistics will be useful for your research about this model and aid you in setting up your very own business.
Although, the definition of the success rate depends on the criteria business owners have, typically, top dropshippers estimate that between 10% and 20% of these shops succeed.
Usually, dropshippers make around 20-30% profit from each sale. This amount translates into $100,000 per year on average, dropshipping stats suggest. Typically, the earnings are ranging from $1,000 to $5,000 per month. The rest of the money, dropshippers allocate for fees, website hosting, supplier, and marketing.
In fact, it’s one of the most profitable passive income sources. People can find trending products on marketplaces to sell to customers worldwide. Moreover, retailers could focus on particular niches and start selling those products, increasing the chances of higher success.
Despite so many positive dropshipping market statistics, it does have some downsides, most notably, less control over lead times and order completion. This leads to unhappy customers and poorer customer service since you depend on the supplier to honor the order commitment. Next, you rely on other people’s stock.
Alexander Pecka and Andreas Koenig, are probably among the richest dropshippers. They started doing business back in 2018 and created their online store on Spotify. They failed several times before launching a popular pet dropshipping business. By the end of 2020, this had made them $500,000 a month in revenue. Now it generates $10 million per year.
Dropshipping statistics show that 27% of online retailers have adopted this model as they see it as an easier path for the customer.
Sources: Fundera, Repricer, Shift4Shop, Statista, AppScenic, Ware2Go, Statista, Statista, BlueCart, TorchBankz, Niche Pursuits, Oberlo, Grand View Research, Research and Markets, MarketDataForecast, Financial Post, Shopify, Oberlo, DEAR Systems, BestFulfill