Are thinking about starting a dropshipping business and wanted to know the numbers? Then you are in the right place, we have put together some important dropshipping statistics, insights, and the latest trends to help you make an informed decision.
Dropshipping is a popular method of online retail. The benefits are undeniable and many online business owners have been able to turn dropshipping into a full-time job.
There’s no doubt the dropshipping industry has grown rapidly over the few years, so much so that many people who aren’t even in ecommerce are starting to hear about it. But with that increase in popularity comes a greater intake of information, making it harder than ever to separate the useful pieces of knowledge from the unimportant bits.
The internet has become an important part of our lives. Whether you are using it to stay in touch with loved ones, for work, or to keep up with industry trends. To complete tasks with the internet, we need the infrastructure underneath it to keep websites running.
Table of Contents
General Dropshipping Statistics
Frequently Asked Questions
Here’s an overview of dropshipping statistics to give you an idea of why this business model is catching on at such a fast rate.
General Dropshipping Statistics
1. In 2018 the global dropshipping market size was valued at $102.2 billion.
Dropshipping is big business and as a form of ecommerce, it has benefited from the rise of online shopping over the years. Although a company like Amazon is the biggest player in the ecommerce market, there is a lot of room for profitability in the market.
3. The global drop shipping market is projected to grow by 28.8% yearly between 2020 and 2025.
The market is global and growing. The dropshipping market is set to see a compound annual growth rate (CAGR) of 28.8%, between 2020 and 2025.
4. Dropshipping is a fulfillment model for 33% of online stores.
About a third of online stores use dropshipping. For example, Amazon has its fulfillment operations in addition to dropshipping strategies. Many major online retailers began as dropshipping companies, and grow big enough to support their fulfillment operations.
5. Ecommerce retailers who use dropshipping can be up to 50% more profitable than retailers who deal with an onsite inventory.
Although several factors impact profitability, using the dropshipping model to focus on reducing overheads results can yield positive results. Retailers who use dropshipping have the potential to be 50% more profitable than those who don’t.
6. 66% of online shoppers will purchase from a competitor with multiple shipping options.
Online shoppers will favor an outlet that offers them multiple checkout options. Logically the more options mean you can serve a wider market. Therefore, by using dropshipping, the supplier can offer multiple options such as free shipping. This gives dropshipping companies an edge in the online market.
7. 84% of ecommerce retailers say securing a good supplier is the biggest obstacle to starting a dropshipping business.
Like any other business, starting a dropshipping business is not easy. Similar to a traditional business you need to find a supplier that suits your business goals, one that is reliable, flexible, and offers good margins.
Most ecommerce retailers say finding a good supplier is their toughest challenge. The common hurdle seems to be meeting suppliers who are used to doing things themselves and are not open to trying new avenues.
8. Only 10% of dropshippers are profitable in their first year.
The dropshipping market is lucrative, so when you have the right supplier, and customers you can see good profits. With that said, it is important to highlight that only 10% of dropshippers are profitable in the first year.
9. The global dropshipping market is set to reach $196.78 billion in 2022
From the latest data, the global dropshipping market is forecast to reach $196.78 billion in 2022, which is a 23.7 percent year-over-year increase from 2021.
More growth is expected in 2023, and the value will surpass $200 billion, to reach $243.42 billion.
10. The global dropshipping industry is expected to reach $476 billion by 2026
The compound average growth rate is forecasted at 28.8%, which means that the global market value of dropshipping will reach $372.47 billion by 2025.
Furthermore, the industry is also set to reach a value of $476.1 billion by 2026.
11. The average success rate of a dropshipping business is between 10% and 20%
This business model will not be a get-quick scheme, you need to work hard and be passionate about ecommerce. With a continuous learning mindset and in time your business can be profitable and successful.
It is estimated that only between 10% and 20% of dropshipping businesses succeed. However, it doesn’t mean you won’t succeed, it only means many people start this type of business without learning about the business.
Analysts credit the significant growth in the dropshipping market to consumers’ increasing preference for online shopping. The boom in ecommerce from 2020 to 2021 was due to the coronavirus pandemic, which forced brick-and-mortar stores to close and consumers to stay home.
Faced with such limitations, people had no other choice but to turn to online shopping to acquire products. The rise of mobile commerce and the increasing smartphone penetration globally also facilitated ecommerce and dropshipping services.
Frequently Asked Questions
What is Dropshipping?
Dropshipping is a method of selling goods without keeping the products in stock. Instead, when a customer places an order for a particular item, the merchant orders that product from a third party and has it shipped directly to the customer. This saves both you and your customers time since you don’t have to worry about maintaining inventory.