As online shopping becomes more and more popular, online stores need to find creative ways to provide the best products and services—and to keep profits up. One easy way to do that? Dropshipping.
The dropshipping statistics we’ve rounded up here prove that this business model is the perfect solution to that equation.
If you’re looking for useful info before starting your own dropshipping business, this article offers the most relevant data you’ll need to start your journey and plan your marketing strategy.
But first, a quick recap in case you’re new here.
Dropshipping is a business model that allows ecommerce retailers to sell products without having to buy inventory. The supplier sends the items straight to the end customer on behalf of the online stores. Since it’s a model that doesn’t require upfront investments or much experience, it’s been well-accepted by entrepreneurs all over the world—especially after 2020, when ecommerce grew stronger than ever.
Information is power. So if you’re thinking of getting into the dropshipping game in 2023, knowing these key statistics may help you make decisions with a clearer vision of the dropshipping market. It’ll also help reduce the risk of making costly mistakes and allow your business to thrive more quickly.
Since we can’t look into the future without knowing the past, let’s start by seeing how things went in 2022.
Since 2020, dropshipping suppliers have experienced significant growth in demand. Why? The pandemic paralyzed in-person shopping as technology was becoming more accessible around the globe. This allowed the ecommerce industry to reach new customers, make the purchasing process that much much simpler, and increase online sales.
More people willing to buy online means more businesses are being launched everyday. And these businesses need suppliers that offer a diversity of products that can be delivered as fast as possible to anywhere. That’s the magic of dropshipping! It’s convenient for both buyers and sellers.
Currently, projections remain exciting, with the global dropshipping market size expected to grow to $243.42 billion dollars. This number is mainly sustained by the Asia Pacific region, which held 33.92% of the market share in 2022. That’s followed by North America, the fastest growing market right now.
Global dropshipping market map. Source: Grand View Research
The compound annual growth rate, or CAGR, is one of the best ways to determine the value of a market over a period of time. It’s more accurate than simply the growth rate because it takes into consideration repeated results, making it a more consistent type of data.
With that in mind, for the dropshipping market in the United States, the future looks bright. There’s an average increase of 23.5% CAGR from 2023 to 2030. What does this tell us? Hop on and buckle up because the dropshipping train is going far!
The dropshipping market in North America. Source: Grand View Research
The fact that you can start selling products on ecommerce platforms or through your own ecommerce store without needing onsite inventory is one of the main reasons why so many businesses are choosing this fulfillment model.
And because you don’t have to worry about getting orders to customers, there’s more time to focus on the fun part: creating new products and marketing strategies to increase online sales.
Learn more about How to Develop an Effective Marketing Strategy.
Choosing the right third-party supplier to trust with your entire fulfillment operation is something that requires a lot of research. Here are some tips that may help you out:
Check the company’s history and market experience
While comparing prices, don’t forget to check the shipping rates and times
Listen to what other customers are saying
Get sample orders to check the quality of the products you want to sell
Check if the supplier offers customization services—it can help you stand out from competitors
Printful, for example, is one of the most reliable companies to work with in the global dropshipping market. We offer print-on-demand dropshipping services for over 300 different premium products including apparel, accessories, and home & living items.
All you have to do is connect your Printful account (which is free) to your store, so that when a customer places an order, we can start the fulfillment process. The customer pays you, you pay for the service and keep the profit.
Online retailers are always looking for ways to increase their profitability. One way to do that is by offering more products, which dropshipping lets you do easily. Items are only produced and fulfilled once an order is placed, so you can offer many different products and designs without having to hold stock on hand. No need to worry about overstock.
This shift in business model can make a huge impact on a company’s revenue. Think about it: the dropshipping model allows ecommerce companies to not have their cash flow tied up in onsite inventory. This enables businesses to save money and invest more in other areas, like marketing, to boost sales.
To calculate the profit margin for your dropshipping business, you’ll need to take into consideration all the costs involved. This includes the dropshipping services you’re using, plus shipping, taxes, and marketing investments.
You’ll need to keep this in mind when you set product prices for the items in your online store.
Remember: when you choose dropshipping, you’re hiring a third party to do part of the work for you—production, fulfillment, packing, shipping, etc. This means you have to pay for that service and not only for the product. At first, if you look at each sale individually, your profit margin may seem lower. But if you do the math, you’ll see it’s 100% worth it.
Pro tip: your profit margin will also depend on the type of product you’re offering and even your target. Discover the most Profitable Dropshipping Niches in 2023.
If you don’t know what to charge for your products, this article may be useful too: The Beginner’s Guide to Product Pricing
According to a Grand View Research report, fashion held the highest percentage of market share among five categories analyzed in 2022. The categories were divided into:
Source: Grand View Research
Fashion dropshipping is expected to continue to grow (and rapidly!) over the next few years. The report predicts that by 2030 the fashion segment will reach a CAGR of 24.8%.
Unlike other categories like electronics or food, fashion dropshipping items are highly customizable. This helps create differentiation among the competition and allows products to be sold with greater added value, increasing the profit margin.
Learn more about branded dropshipping.
Something else that could influence this growth is the advantage of the dropshipping model for small and medium-sized fashion brands. Using a print-on-demand dropshipping supplier with fulfillment operations around the world means being able to reach international markets by eliminating logistical difficulties.
And the electronics segment? It accounted for 19.15% of the market share of dropshipped goods in 2022, according to the Grand View Research report.
It’s easy to see why this is such a popular dropshipping niche: there’s constant demand for tech devices and gadgets, and those products are usually sold at higher prices and have lower return rates.
Plus, this is a market that thrives on novelty. There’s always a new device or gadget sparking interest, or an unmissable update on a techie’s favorite device. Because of that, dropshipping is an excellent option for ecommerce companies keen to venture into the world of electronics: there’s no need to invest in inventory upfront.
Plus, it’s possible to add new products to your catalog and experiment with demand without the risk of losing money.
Although electronics is a great dropshipping niche, it’s also a competitive one. In order to stand out, online businesses should focus on providing fast shipping and amazing customer support.
If you still see TikTok as a silly video app for teenagers, it’s definitely time to rethink your stance. Dropshipping is about making things simpler, and using social media platforms as a direct sales channel is a logical step toward optimizing your ecommerce business. In fact, dropshipping is a very effective strategy if you’re looking for a way to make money on TikTok.
In this sense, TikTok comes out ahead of other social networks, like Instagram and Youtube, when it comes to sparking the need to consume. 67% of TikTok users say they feel inspired to shop, even when they didn’t plan on it.
Source: Insider intelligence
Even though other platforms may offer more robust ecommerce solutions, TikTok seems to play an important role when it comes to marketing effectiveness. Just look at the popularity of the #TikTokMadeMeBuyIt hashtag! It shows that the social network has a strong influence on online consumption habits.
For the dropshipping market, TikTok has offered an integration with Shopify that allows direct sales on the platform since August 2021. This is perfect for digital influencers who want to monetize their TikTok accounts by selling merch, combining the advantages of dropshipping and print-on-demand.
Source: Google Trends
US interest in dropshipping is growing fast. In January 2023, the searches for the term dropshipping on Google were 2.6 times larger than the same period in 2022—a 156% increase.
The term has been around for some time, but everything points to the fact that this business model will keep growing. The increase in interest could indicate that more people are trying to start their own dropshipping business in 2023.
Experienced dropshippers estimate that only 10–20% of dropshipping businesses will start generating profits in the first year. This number is not very different from ecommerce success rates, but it does raise a question: what factors mean success or failure for a dropshipping business? And what are the success stories doing right?
Who better to answer that question than top print-on-demand customers at Printful. Keep reading to find out what they shared.
Finding a product that will please everyone is not only impossible, but also the wrong way to go when you’re choosing a dropshipping niche. A better approach is to think about your personal interests and try to find a way to monetize them. If you like it, someone else probably will too.
Learn more: Profitable Dropshipping Business Ideas
Check out Dogecore, a top-selling brand that’s making money with internet meme designs, using humor and authenticity as a tool to conquer customers.
There are many strategies you can explore in order to avoid being just one more brand in the market. Supporting causes is one of them—Women Who Code is a great example of how dropshipping and purpose can go hand in hand.
Customers won’t be knocking at your door overnight. Building and engaging with an audience and turning them into customers might take a while—but it can be a great starting point. Take Inspire Uplift, for instance. The brand started as a social media community before becoming a custom-built marketplace that has 15K orders a month.
Not every business uses dropshipping for the same goal. For Match Kicks that was a way of diversifying their business. For itsjusta6, dropshipping was the solution to face some growing pains and scale the brand in a flexible way. Take your time to find out how dropshipping can benefit your business idea within the structure you have now.
If you’re interested in getting to know other customer success stories, take a look at our Printful case studies.
The short answer is yes. There are growing options for ecommerce platforms, manufacturers, and integrations that make dropshipping a solution that’s here to stay. For a deeper understanding of this business model, I recommend our ultimate guide on What is Dropshipping.
And to learn more about how Printful has been part of this trend, follow our latest news.
Gabriela is a creative copywriter, professional blogger, and passionate content marketer with experience in publicity agencies and international companies. She loves sharing her ideas and new trends to bring inspiration to everyone around her.