Having low costs to conduct business and not worrying about inventory and stocking up sounds like the dream of every online retailer. That’s why the popularity of dropshipping is hardly surprising. It entails selling products shipped directly from the manufacturer to the customer. So dropshipping sellers don’t need their own inventory and act as a proxy in this process, collecting the difference between the retail and the wholesale price. The dropshipping statistics below will help you get a proper insight into this growing industry.
Dropshipping Statistics 101
- The dropshipping market is set to grow at a 28.8% CAGR between 2019 and 2025.
- Just 10% of all dropshippers are profitable in the first year.
- In 2021, there were 2.14 billion digital buyers.
- Dropshipping is the fulfillment model for 33% of online stores.
- The average dropshipping profit margin ranges between 15% and 20%.
- The average success rate for this sales model is around 10-20%.
- Manufacturers who participate in dropshipping have 18.33% higher profitability.
General Dropshipping Stats
1. In 2021, there were 2.14 billion digital buyers.
Translated into percentages, this is 27.6% of the total number of people on earth (7.74. billion). So one in every four people shops online. Also, the larger number of online shoppers means a higher dropshipping success rate. So, in 2021, there were 900 million more digital buyers than in 2020 (4.4% difference). This increase comes as a result of global internet connectivity penetration.
2. In 2022, the number of digital buyers in the US is projected to reach 266.7 million.
Dropshipping stats reveal that the number of digital buyers in the US is expected to increase by 1.4% between 2021 and 2022. Furthermore, this number is set to grow, reaching 291.2 million by 2025.
3. Dropshipping is the fulfillment model for 33% of online stores.
Another factor in favor of this sales model is that about a third of all online stores have a high success rate in dropshipping as their only model. With ecommerce expanding by 17% annually, forecasts indicate its popularity will keep growing.
4. 38.4% of digital buyers in the US are under the age of 35.
In line with dropshipping industry statistics, millennials shop online the most frequently compared to the other age groups. This is no surprise because they were the first digital-savvy generation before Gen Z. In fact, only 14.4% of people who shop online in the US are more than 65 years old.
5. With three million live websites, WooCommerce is the most used platform for ecommerce and dropshipping.
Shopify is another popular platform for people to build their ecommerce businesses easily and in a short period. Namely, there are 1.7 million websites on Shopify at the moment.
6. Unexpected shipping costs lead to 63% of abandoned carts.
One of the main reasons customers abandon their carts in online stores is unexpected shipping costs. Dropshipping statistics also show that users give up on a purchase if the discount code doesn’t work (46%) or orders take too long to ship (36%). Moreover, they are more likely to abandon the cart if they have to re-enter their credit card info (30%) or shipping info (25%).
7. Online stores, with a minimum of one social media account, register 32% more sales on average.
Dropshipping marketing is an important aspect of this business model. It’s what makes products visible. So online stores using Facebook and Twitter to exhibit their products report more sales than the rest on average. For reference, an average ecommerce site usually publishes 4.55 posts per week on Facebook.
8. The average dropshipping profit stands between 15% and 20%.
In line with dropshipping stats, the average profit margins tend to go between 15% to 20%. However, it depends on the product and the location it is sold. By pushing products with high demand and low supply, dropshippers could reach a 20% margin and avoid extra fees from the suppliers.
9. The average success rate for this sales model is around 10% to 20%.
Usually, the dropshipping success rate goes up to 20% only. It is so because many people start this business without understanding what it entails. What is more, it takes patience since success in this field doesn’t come overnight.
10. Consumers trust peer reviews 12 times more than manufacturers’ descriptions.
According to dropshipping statistics, online reviews are extremely important for dropshipping. This is because customers usually trust other people’s words and testimonials more than what a company claims about its product.
11. 86% of dropshippers who use AliDropship choose a niche store rather than a general one.
Exploring some hidden niches in business usually pays off. So people who want to do dropshipping on AliDropship, in particular, tend to choose a specific niche. The idea is always to choose one and stick to that scope. What is more, as dropshipping statistics show, only 14% of dropshippers own general niche stores.
12. 18.5% of dropshippers on AliDropship operate in the Gadgets, Devices, and Accessories Niche.
AliDropship retailers primarily work in gadgets, devices, and accessories. Other than these, important niches include baby and children’s products (13.1%), sports and outdoors (12.1%), women’s clothes (10.6%), hobbies, and crafts (9.9%). Further, dropshippers work in fashion accessories (6.2%), home and garden (6.2%), pet supplies (6.2%), men’s clothes (5.1%), cooking supplies (4.6%), jewelry (3.6%), health and beauty (2.6%), gifts and special occasions (2.3%), and other (2.3%), dropshipping market statistics show.
13. Amazon has over 9.7 million sellers globally.
About 1.9 million of them are active sellers on the marketplace. In fact, in 2020, these third-party seller services accounted for $80.5 billion in sales. Moreover, nearly a million new sellers each year join Amazon, making it one of the most prominent ecommerce platforms. In Q1 of 2021 alone, some 283,000 sellers joined the marketplace.
14. As the largest online retailer worldwide, Amazon generated $386.06 billion in revenue in 2020.
The company’s net revenue in 2019 was $280.5 billion. Moreover, dropshipping market statistics show that $104.41 billion of the company’s revenues in 2020 were generated by international revenue channels. Generally, these third-party sellers account for 50% of all sales on Amazon.
15. Dropshippers posting their products on Amazon fulfill about 34% of their sales.
About 50% of all orders on Amazon come from third-party sellers. Over half of them (34%) are dropshippers. This results in $95.37 billion annually.
16. According to Amazon 2019, the average US small and medium businesses sell over 4,000 items per minute.
This is much more than what some individual ecommerce stores sell in general. However, considering the growth of ecommerce by 17% year on year, including dropshipping, statistics confirm that this is a good sales model.
17. eBay dropshippers make an average of $693 per month in cashback.
Cashback is the amount of money people receive when purchasing with a credit card. Credit card companies pay people a certain percentage of their spending as an incentive to keep using their cards. For every order dropshippers purchase from suppliers, they get a percentage. Some credit card companies pay back annually, and some monthly. According to dropshipping statistics, eBay dropshippers make an average of $693 monthly cashback.
18. The average eBay dropshipper processes 969 orders monthly.
Those in the top 10% have a much higher workload, processing about 4,759 orders per month. This means they earn about $12,706 monthly. For instance, eBay dropshipping orders increased by 7% in January 2019 compared to December 2018 because people went for cheaper products after the festive periods. Yet, the total value of the January sales was only 1% higher, dropshipping stats show.
19. Dropshipping has a 2.33% conversion rate.
This model has a lower-than-average conversion rate compared to other business models. For instance, the average conversion rate is 3.02%. Private label has a 3.98% conversion rate, followed by manufacturing, with 3.25%. The hybrid business model has a 2.69% conversion rate, reselling 2.45%, and dropshipping comes last with 2.33%, statistics on dropshipping show.
20. Dropshipping profit margins usually are much higher, around 3-10%, than those in affiliate marketing.
Although affiliate marketing is similar to dropshipping, there are many differences, including profits. Dropshipping is usually more profitable since you set your prices and profit margins. One exception is digital products, like online courses and software as a service, where the affiliate commissions are very high. As affiliate marketing statistics show, they are somewhere between 10% to 50% since they are very competitive niches.
Ecommerce and Dropshipping Industry Statistics
21. The dropshipping market is set to grow at a 28.8% CAGR between 2019 and 2025.
Back in 2018, the dropshipping market size was $102.2 billion. Thanks to the anticipated growth of online shopping, the expansion of this sales model was inevitable. Moreover, the rising trends of cross-border ecommerce trade are another important aspect to factor in, as statistics on ecommerce reveal.
22. The food and personal care market is expected to reach a higher CAGR of 30% over 2019-2025.
In line with dropshipping market statistics, the increased spending on perfumes, skincare, and other personal care products drives this segment further in the forecasted period. Another fast-growing segment is luxury furniture due to the rise in spending on domestic furniture and appliances. A few years ago (2018), the electronics segment accounted for the largest share of 30%.
23. The dropshipping market is set to reach $196.78 billion in 2022.
Based on the latest data, dropshipping worldwide will register a 23.7% increase YoY in 2022. Moreover, in the years to come, this figure is bound to continue growing. So, dropshipping stats predict that in 2023, with the expansion of dropshipping software and ecommerce, it will reach $243.42 billion. In 2024, it is set to hit $301.11 billion, followed by 2025, with $372.47 billion. Further estimations show that in 2026, the market will be worth $476.10 billion, representing an impressive $347.5 billion growth in just several years.
24. China is the largest ecommerce market, with $2.779.31 billion in sales in 2021.
After China, the second largest market for e-sales is the US, with $843.15 billion. The third spot belongs to the UK, with $169.02 billion in sales.
25. Ecommerce sales are projected to hit $7.4 trillion by 2025.
Dropshipping sales have a strong tendency to grow, dropshipping statistics show. For reference, the 2021 retail ecommerce hit $4.9 trillion globally. Now, the market is on the path to reaching almost 50% growth in the next few years, which is a staggering expansion.
26. In 2021, ecommerce comprised 19.6% of retail sales globally.
Ecommerce will account for almost a quarter of all sales globally by 2025. One of the main contributors to this expansion is the explosion of digital development in the Asia Pacific, with the Philippines and India climbing to the top as the fastest-growing online retail markets.
27. Just 10% of all dropshippers are profitable in the first year.
Statistics on the average dropshipping profit margin indicate that not all earn money in the business in the first year. According to dropshipping statistics, very few manage to overcome many challenges regarding customers and suppliers and earn money from the start. Therefore, most have to be prepared to lose some until they turn a profit and secure their business.
28. Mobile ecommerce comprises 45% of the total US online sales.
Businesses can increase their average dropshipping income if they optimize their websites for mobile devices since most customers in the US access them through their mobile phones. As a result, annual mobile ecommerce sales are set to hit $488 billion in 2024, compared to 2020, when they amounted to $284 billion.
Dropshipping Suppliers Statistics
29. A traditional retailer’s bulk purchase amounts to 13% of what the supplier prefers to sell.
Traditional retailers with onsite inventory aren’t in a position to purchase as many products as the manufacturers would want them. This mostly depends on many factors such as space, budgets, etc. Therefore, manufacturers prefer the dropshipping model because it enables them to move their goods faster and in larger quantities.
30. Manufacturers who participate in dropshipping have 18.33% higher profitability.
According to dropshipping suppliers’ statistics, companies participating in dropshipping increase their odds of selling more than relying solely on traditional sales channels. Moreover, this model works well for sellers, too, since they don’t have to buy products in bulk or store them. As a result, the average dropshipping profit tends to be potentially 50% higher than in conventional sales.
31. 84% of online retailers believe a good supplier is the main factor for a business to kick off.
Securing from the start a good supplier is the biggest hurdle to getting an online retail business going. Moreover, a good supplier needs to follow the growth and evolvement of a dropshipping business. Dropshipping stats show that when demand increases, the supplier needs to support it.
32. 66% of online shoppers prefer more shipping options or will go to competitors.
Buyers will search for an alternative seller unless offered a choice of shipping modes. This is something to have in mind when looking for a supplier for the dropshipping model. The chosen company must offer flexible shipping options to allow customers the flexibility they desire.
33. 33% of online shoppers have high expectations regarding fast shipping.
About one-third of shoppers expect fast shipping. Further, 40% have high expectations about free shipping, while 42% expect to have a two-day shipping option for all online purchases.
The Bottom Line
These dropshipping stats have probably given you a pretty good idea of how profitable this industry can be. The market seems to be gaining momentum, and with consumers shifting toward online shopping, the future of dropshipping looks bright. The pandemic has only sparked further growth.
Dropshipping FAQs
What is the success rate of dropshipping?
According to the top dropshippers around the globe, the success rate in this business is only 10% to 20%. However, it depends on many factors — in the first place, on the dropshipping business owner.
How much does the average dropshipper make a year?
An average dropshipper makes about 20-30% profit from each sale. This translates into $100,000 in annual profits on average. Monthly, it’s somewhat between $1,000 and $5,000, dropshipping statistics confirm. The rest goes to marketing costs, suppliers, and similar expenses. The profit also depends on the type of product. So, those selling higher-quality products have a higher profit margin.
Is dropshipping passive income?
Dropshipping is one of the most profitable passive income models online. In this business, you can find interesting products online and resell them to online customers globally. And the big benefit is that you control how much you charge for the products.
What are the disadvantages of dropshipping?
Despite many benefits, there are downsides to dropshipping. First, sudden stock shortages are something you have no control over, dropshipping statistics show. Second, stocking retailers usually get better pricing and incentives than dropshipping retailers. Third, you pay the real costs of picking, packing, shipping, and stocking in dropshipping. Fourth, as the sales grow, so do the costs. Finally, although the customer service responsibility is removed from you, the customer experience is out of your control too.
Who is the richest dropshipper?
The number one dropshipper worldwide is Irwin Dominguez, who went from zero to $1 million in only 12 months. He lives in San Diego.
How many dropshippers are there?
Several years ago, the dropshipping model accounted for 23% of online sales, with a value of $85 billion per year. More recent dropshipping statistics suggest that 27% of online retailers see this model as an easier path to retailing, and many have adopted it.
Sources: Oberlo, Shift4Shop, AppScenic, BigCommerce, Verfacto, Torchbankz, eDesk, Store Growers, Niche Pursuits, Grand View Research, Statista, Fundera, Ware2Go, Shopify, BlueCart, APS Fulfillment, CrazyLister
