The dropshipping market in 2024
But we still need concrete proof—is dropshipping worth it, even now?
With this year’s increased inflation and threats of a recession, you have every right to be concerned. Choosing to start a dropshipping business is a big decision for store owners, so check the data before you sell products.
So, is dropshipping still profitable? Let’s check the state of the dropshipping business today.
Growth rate and projections
In just the past year, the dropshipping market grew from $192.76B to $249.16B. But what about 2024? Even despite inflation and global economic disruptions, the industry is expected to reach $724.26B in 2027.
This means 2024 is still a great time to jump on the opportunity.
Another report from Grand View Research offers similar figures, and indicates that dropshipping will be steadily growing at a rate of 23.4% through 2030.
This means that by 2030, the dropshipping market will reach $1.25T globally!
Source: Grand View Research
As you can see in the graph above, the dropshipping store market in North America is about to experience accelerated growth. According to the report, it’s primarily expected to come from the adoption of artificial intelligence for dropshipping.
Source: Grand View Research
North America in particular also boasts the fastest growth in the dropshipping market, showing that this business continues to flourish even in developed countries with high competition.
The world of ecommerce, in general, has been flourishing for years, with transaction value reaching $6.03T in 2023. Digital commerce is projected to grow even more and reach an astounding transaction value of $9.04T by 2027.
These statistics show that dropshipping (and ecommerce in general) has continued to grow even as lockdowns were lifted and life began to return to normal for many of us.
But it’s not just about market growth, there’s also continued interest from online users on the topic.
Let’s have a look at some Google Trends data:
Source: Google Trends
As you can see, the general trend for the word “dropshipping” is upward. Meaning, consumers are consistently searching for the term, most likely to learn more about it.
Source: Google Trends
This is also the case with related phrases like “Shopify dropshipping” or “Amazon dropshipping.” This makes sense when you think about the fact that 60% of Amazon sales are from third-party suppliers who use models like dropshipping. Or, that the Shopify platform has gotten super popular among retailers who use the dropshipping business model.
What does this all mean? The dropshipping market is still growing, and the term continues to generate a lot of interest from online consumers.
It’s obvious starting a dropshipping business in 2024 is still a great idea.
Advantages of the dropshipping business model
We’ll break it down for you even further. Here are the major benefits of dropshipping:
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You don’t need to spend money on inventory until a customer orders your product
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You won’t get stuck with unsold items because inventory management is handled by your supplier
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Operational costs are low since you’re relying on a third-party supplier who handles the logistics
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You can easily integrate your dropshipping service with popular ecommerce platforms (depending on the supplier you use)
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You can choose from a variety of white-label products that are customizable (depending on the supplier you use)
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The only thing you have to focus on is the interesting bits of your business, like marketing strategies, design ideas, and brand identity
Possible disadvantages of dropshipping
Even though the market is thriving and consumer interest is there, dropshippers still face certain challenges. But don’t fret; with the right information and strategy, any roadblocks can easily be overcome.
Let’s go through some of the most common issues and how to solve them.
Is there too much competition?
No, definitely not yet. As the data shows, online shopping is continuously growing, so more and more retailers will be needed to meet that demand.
But there’s still the matter of standing out from the competition. Consider the various dropshipping niches, choose the right one for your business, and do some solid research.
Find the best products for maintaining profit margins, determine a potential audience for those products, and learn about your competitors.
You can use tools like SpyFu to find your competitors’ most valuable keywords, BuzzSumo to track the best-performing social media content, or Se Ranking to uncover your competitors’ promotional strategies to attract online shoppers.
Read also: 7 Dropshipping Alternatives for Your Online Business
Are all the best niches already taken?
That’s the next logical concern. You need to choose a niche, but what if all of the “good” ones are already saturated?
Don’t worry, new segments emerge every day due to changes in demand. In the online universe, anything can create a new fad—social media trends, a TikTok video, or an influencer talking about something cool.
If you spot a movement happening online, get your digital marketing going and be one of the first to offer new, relevant products.
There are various tools that will help you stay in the loop, like Trend Watching, Trend Hunter, Cool Material, and of course, Google Trends. You can also use Google Alerts for specific words, like brands or product names, to stay informed about any news to do with your niche.
Learn more:
How can you make good product choices?
Choosing the right product supplier is crucial to having a thriving dropshipping business. You want to offer a variety of quality products that consumers will love. Make sure to get samples and try out the different products before starting to take on customer orders.
In terms of what to sell, the most important part is simply thinking about your customers: what do they need, what is valuable to them, and how can you make their lives easier?
Don’t focus on the sales as much as keeping your customers happy. That’s how you create a long-lasting relationship and a reputable brand name.
Learn more:
Is customer service important?
Sometimes business owners who rely on dropshipping from a third-party supplier let customer service fall through the cracks. But a dropshipping business model is no different from traditional retail models: making sure your customers are taken care of is essential to the success of your business.
You must inform your customers of any shipping delays, changes in stock, or new launches, and always respond to inquiries or complaints as quickly as possible. Solid customer support shows that you care about your clients and that your store is trustworthy.
How much money can you make when you start dropshipping?
So, how much can you actually make from dropshipping? Well, according to Bluecart, quite a lot—assuming you follow the advice above and do your part. Bluecart’s calculations state that, on average, dropshipping stores make around 20%–30% on each sale. Let’s see how that shakes out:
Assume you buy a product from a supplier for $20. You add shipping process costs and ecommerce platform fees, and sell it in your online store for $35. If your costs cap out at $5, that leaves a $10 profit for your small business.
The profit margin for other (often riskier) business ventures can be higher, but choosing a low-risk business model makes your success more likely. The safety and lack of inventory management are mainly what makes dropshipping worth it.
Now, depending on how much you’d like to earn a month, you have to calculate how many orders you need. If you want to be making as much as some of the more successful dropshippers, according to Bluecart, you’re aiming at $5K a month. How many sales is that?
$10 profit x 500 orders = $5,000
If you sell 500 items, you’ll reach your desired monthly profit. Of course, costs differ depending on your dropshipping platform, supplier, shipping costs, product type, and so on. But now you have a pretty good idea of your earning potential once you start dropshipping.
