Dropshipping is a low-risk, high-reward business model that allows you to sell products without ever stocking inventory.
If we look at dropshipping statistics, the market continues to grow substantially year over year. That means it’s a good time to take your online store to the next level and discover which dropshipping products with high profit margins would fit your ecommerce business.
By the end of this article, you’ll learn:
How to calculate profit margins
What qualities are important for products with high profit margins
Which high profit margin products you should consider adding to your online store
Are you ready to elevate your dropshipping game? Let’s get started!
A profit margin is the percentage of revenue that you keep as profit after deducting all the costs involved in making and selling your products. In other words: profit margin = price – cost of production.
It’s an important metric to track because it tells you how profitable your business is. Essentially, two key factors affect your profit margins: your product price and its cost.
Your product price is how much you charge your customers for it and the product cost is how much you pay to your dropshipping suppliers for order fulfillment, materials, printing, and shipping. For example, if you sell a t-shirt for $25 and your product cost is $15, your profit margin is ($25 - $15) / $25 = 0.4 or 40%, which is an exceptionally high profit margin.
However, calculating your profit margin is not always as simple as that. There are other factors at play, like taxes, fees, discounts, refunds, and marketing expenses. To get a more accurate picture of your profit margin, take out these variable costs from your revenue, and only then divide them by your product price.
Let’s revisit the t-shirt example. So, you’re selling a t-shirt for $25 and your product cost is $15. But you also pay 10% in taxes, 5% in fees, and $5 in marketing expenses per sale, then your profit margin looks like this ($25 - $15 - $2.5 - $1.25 - $5) / $25 = 0.22 or 22%. Notice how it’s significantly lower than the previous estimate, but it’s still a good profit margin.
How can you increase your profit margin? One simple way is to raise your product price. But to avoid losing customers in the process, you should add additional value to your products by offering fast delivery, exceptional customer service, or unique designs. This way, an increased price is justified.
On the flip side, you can try to decrease your production costs by paying less for your fulfillment without compromising on quality or reliability. For example, by negotiating better deals with your supplier, switching fulfillment providers, or choosing cheaper shipping options.
So, is dropshipping worth it if you’re aiming for high profit margins? Absolutely, but you need to keep an eye on calculating and optimizing your profit margins regularly. This way, you can make sure that your business is sustainable and profitable. Plus, use it as a benchmark to compare different products and niches, and find the best ones for your online business.
So you have your online store and you’re confident about calculating your product profit margins. But what should you keep in mind when coming up with ideas for new dropshipping products?
From problem-solving customer needs and ensuring product quality to the influence of social media trends on product demand, let’s explore some key factors that drive the most profitable dropshipping products.
If you want to sell high-margin products, you need to focus on quality. Ultimately, it’s what sets you apart from competitors and helps build customer relationships, making them eager to buy again. But how do you ensure quality when you’re dropshipping products?
First, you need to choose a reliable fulfillment provider. If you’re going for a print-on-demand (POD) service like Printful, then high-quality products and fast shipping are non-negotiables. You don’t want to disappoint your customers with flimsy products, long delivery times, and unreasonably high shipping costs.
Next, test your products before selling them. You can order samples and check them for durability, size, and fit. In addition, ask for feedback from your friends, family, or loyal customers. This way, you can spot any issues and fix them before a new product launch.
Quality is not something you can compromise on if you want to succeed in the online market. So invest in high-quality items and reap the rewards.
As a business owner, you want to offer products that have high demand, low competition, and good profit margins. But where do you start with your product search? One of the best ways is to look for solutions to a customer problem.
For example, if you’re selling pet products, you could offer a personalized dog collar with the dog’s name and the owner’s phone number which solves the problem of identifying them in case of an emergency.
To recognize a customer problem, do some research on your target audience and your preferred product niche (for example, tech accessories). Find out what kind of issues customers face and how you could address these.
Then, validate your product idea. Before launching a new product, make sure there’s enough demand and interest for it. You can use tools like Google Trends and Facebook Ads to measure the search volume, engagement, and conversion rates of your product idea.
High-margin ecommerce products often go hand and hand with social media trends. It’s no surprise that platforms like Facebook, Instagram, and TikTok are places where your potential customers hang out, discover new products, and make purchasing decisions.
To make the most of social media trends and market your products effectively, research hashtags on Instagram and TikTok (for example, #TikTokMadeMeBuyIt) to see what people are buying. In turn, this will help you identify popular products that people are willing to spend more on.
Dropshipping is a very competitive market, so you need to offer something unique and valuable to your customers to get high profit margin sales. Being different in a saturated market can be a challenge, but there are a few things you can try.
For starters, think of ways you could improve existing products by adding new features. You could also turn your attention to creating unique designs that target a specific audience (for example, fun baby clothes for occasions like baby showers) and people are often willing to pay more for.
Finally, consider branded dropshipping. This means creating a consistent brand appearance for your website, packaging, and marketing efforts. You can even add branding elements to your dropshipping products, like custom labels or order pack-ins. As a result, customers are more likely to perceive your brand as high-quality, which means you can sell your items at a higher price point.
Another important factor to think about is scarcity in the market. It’s the perception that a product is in high demand and low supply, which makes it more desirable and valuable. Scarcity can help you increase your profit margins, attract more customers, and create a sense of urgency.
To make the most of it, choose niche products that are not easily available elsewhere to reduce competition from other sellers. You could also offer exclusive discounts or free shipping for a limited time. This will encourage your customers to buy now and save money, rather than wait and risk missing out on a good deal.
To help you spot seasonal trends, one of the most useful tools to check out is Google Trends. It’s handy for identifying seasonal spikes in product demand, emerging markets, and shifts in customer interests. You can use the data to guide your pricing strategy, and raise your prices when items are in peak demand, but have a lower supply.
For example, if you search for “funny t-shirts,” you can see a steady demand throughout the year, but slight peaks in summer, before Halloween, and around Christmas time. That means you should think about focusing your marketing efforts around those times.
Source: Google Trends
In this section, we’re going to look at items with high profit margins that have the potential to boost your dropshipping store. But keep in mind that high profit margin products are a moving target. Always consider production costs and the average profit margin before jumping on new items for your store.
Below we’ve gathered a selection of high profit margin products you can sell online. Spoiler alert: they’re made on demand and allow for customization.
Clothing is one of the most popular product categories for a dropshipping store. But be aware that it’s a saturated market. Since dropshipping successfully requires selling at scale, try to focus on product types that are in high demand, like custom and personalized clothing.
If you decide to start your own clothing line, carve out a niche and narrow your product selection down by material, style, design, or category (for example, swimwear or kids’ clothing). You can always check what’s in demand on Google Trends to help you decide on a specific idea for your own dropshipping business.
Custom embroidered clothing items like custom t-shirts, hoodies, and caps are great products to sell online if you focus on apparel. Here are some of the benefits of offering embroidery when doing dropshipping:
High-value products. Customized embroidery is a premium offer that can attract customers who are willing to pay more for quality and uniqueness.
Personalization. You could allow for custom additions that customers would like to have embroidered on a piece of clothing.
Expanded product range. As your business grows, there’s potential to offer a wider product range and cater to several niches: sports, hobbies, professions, etc.
Easy to source and ship. There are lots of reliable clothing suppliers who can handle the embroidery and fulfillment for you.
Now that you’re aware of the product opportunities, it’s important to decide on your target audience and niche—who will you be selling to? Throughout this blog post, we’ll drop in some cool niche ideas for products to inspire your next venture.
Niche idea: Matching custom hoodies with personalized embroidered initials and anniversary dates for couples.
One of the most profitable niches with good profit margins is custom all-over print clothing. These are items that have your designs printed on the entire fabric, creating a unique and eye-catching look. You can sell t-shirts, hoodies, and even leggings with your own artwork, funky prints, or customized designs.
Some of the advantages that drive profit margins include:
Uniqueness. Custom all-over print clothing is not very common in the market, especially in traditional retail stores, so you can attract attention by selling products with original all-over prints.
Trendy designs. When dropshipping, you don’t need to invest in inventory or equipment, so it’s easier than ever to test new ideas quickly and cheaply. When it comes to all-over prints, experiment with unique designs and adapt to the latest trends.
Popular with Gen Z shoppers. All-over prints are perfect for bold styles that appeal to young audiences. It’s a great product fit if you’d like to attract Gen Z audiences to your online retail store.
With these product benefits in mind, turn your attention to possible market segments that you could conquer with unique print designs.
Niche idea: Yoga leggings with abstract all-over animal prints (think snake, alligator, or leopard print).
If you’re looking for a sustainable dropshipping business idea, you might want to start selling eco-friendly clothing items. Need some convincing? Eco-friendly apparel also tends to have high profit margins. Here’s why:
High demand. More and more consumers are becoming aware of the environmental impact of their fashion choices. Naturally, customers are increasingly looking for eco-friendly clothing alternatives that are better for the planet.
Durable and long-lasting. Simply put, clothing made from durable materials means fewer returns and more happy customers.
High-value products. Customers are ready to spend more on sustainable alternatives, including t-shirts, hoodies, and jackets made from organic, high-quality materials. This makes them high-margin products and investment pieces that customers are willing to pay for.
Niche idea: Products made from organic materials paired with designs that speak to environmentally-conscious consumers—that’s a winning combo.
Items with original artwork or prints are products with high profit margins that people are willing to invest in. If you decide to sell art online, you should aim to attract buyers looking for unique, quality pieces that they can’t find elsewhere.
Custom canvas prints can add charm and character to any space, making them appealing to shoppers who’re looking for unique interior design pieces. When it comes to art prints, customers are keen to pay more for one-of-a-kind items that will be in their homes for a long time.
Plus, here are some more benefits:
In demand. The past few years have seen an increase in demand for wall art, as people are eager to personalize their living spaces.
Evergreen products. Canvas prints typically see a steady interest all year round, with peaks around the holiday season.
Highly customizable. Depending on your skills and drawing abilities, you can let customers upload their photos as inspiration for custom artwork. This way, you’re creating personalized, original artwork and can charge more.
Niche idea: Artwork that’s custom-made and based on pictures of customers’ pets. For example, personalized images of pets printed on canvas in the style of royal portraits.
Home decor is a booming market with a steady demand for wall art and posters. With more people seeking to personalize their living spaces, it’s a good time to sell posters with thoughtful and inspiring designs.
Here’s why it’s a good high-margin product idea for your ecommerce store:
Design with online tools. It’s never been easier to create stunning designs so quickly and turn posters into profitable products to sell online. For starters, try out some free online design tools like Canva or Printful’s Design Maker. This helps you reduce costs, and save on software subscriptions or design services.
Wide product range. It’s easy to offer various print sizes, ranging from small A5 up to large A1 posters, framed or unframed, and even digital downloads. Customers love having this flexibility, and it’s incomparable to retail offers that typically sell posters in a limited size range. Take advantage of this by selling high-quality, artsy prints which are perceived as premium items with higher price points.
Easy to source and ship. As a dropshipper, you can eliminate the need for expensive upfront investments like inkjet printers, and use a POD service like Printful to have professional-quality posters printed and shipped directly to customers. This lowers your overhead and increases your profit margin.
Niche idea: Posters with illustrations for nurseries or children’s room decor.
Source: Alice Potter Illustrations
Specialty tech accessories like phone cases enjoy broad market demand. But it’s still possible to achieve high profit margins if you’re dedicated to carving out a niche and offering high-quality products.
With new phone releases coming out so frequently, phone accessories are in high demand. Here are the product benefits that are worth keeping in mind when deciding on high profit margin dropshipping products:
Custom designs. These days, phone cases are more than just a practical necessity, they’re used to convey personality and style. So, specific audiences are often willing to pay more for unique designs.
Potential for repeat customers. As new phone releases come out and customers upgrade their devices, there’s a high chance they’ll come back for similar products. Make sure you offer different phone cases and a good range of sizes for iPhone and Android users. Establishing your store as the go-to place for a wide range of high-quality phone cases will enable you to start charging more for your products.
Easy to source and ship. Phone cases are relatively small, lightweight, and cheap to produce, so you can keep fulfillment and shipping costs down.
Niche idea: Teardown phone cases by dbrand are realistic representations of your phone’s internals. They’re designed by Zack from JerryRigEverything, a popular tech YouTuber channel, and appeal to tech-savvy shoppers. Think about something similar that techies would love.
Gaming mouse pads are not only high-quality products that enhance the gaming experience, but they also have several advantages that make them high-margin dropshipping products. Here are some of the benefits:
Consumer trends. Gaming is a huge (and growing!) industry, with millions of gamers around the world looking for ways to improve their performance and comfort. Gaming mouse pads are among the essential tech accessories that gamers need, and they’re willing to pay for quality and design.
Easily marketable. The good news is you already know your target audience. So, direct your design and marketing efforts to appeal to both professional gamers and people who enjoy gaming in their free time. This way, you’re saving on marketing costs by focusing your efforts on a niche audience.
Limited competition. Unlike other saturated niches, like clothing or electronics, gaming mouse pads have relatively limited competition online. This means you can stand out and attract customers by offering mouse pads with unique designs. In turn, shoppers are willing to pay more for items that are difficult to come by.
Niche idea: Mouse pads with anime-inspired custom designs in bold colors.
Clothing for kids is a consistently in-demand product category. Parents and caregivers are always on the lookout for stylish clothing options for their little ones. From everyday essentials to special occasion outfits, there’s a range of products to explore.
Baby bodysuits, also known as onesies or rompers, are essential wardrobe staples for infants and young kids.
Their functionality provides consistent demand, making baby bodysuits a reliable choice for your dropshipping business. To stand out from the competition and justify charging more, focus your efforts on especially cute and fun designs that parents will want to splurge on.
If you still need convincing, here are a few more reasons they’re selling with a high profit margin:
Consumer trends. Baby fashion is an increasingly popular trend on social media platforms. Parents love to showcase their little ones in fashionable, cute, and unique outfits—and baby bodysuits are no exception. This drives demand for novel design ideas, which you can charge more for.
Cross-selling opportunities. You can create complementary product bundles or suggest matching accessories, allowing you to increase the average order value and maximize profits.
Personalization. If you’re planning to offer embroidered baby onesies, there’s a market for simple, personalized designs that you can charge more for—for example, adding baby names or birth months.
Niche idea: Baby onesies with funny slogans like “I’m not crying, you're crying” or “Make some noise”.
When it comes to exploring eye-catching options within the children’s clothing niche, all-over print leggings deserve some of our attention.
Here’s why bright, funky leggings for children have good profit margins:
Limited competition. While there are many online sellers of kids’ clothing, not many specialize in leggings, especially with all-over print designs. This helps you to stand out from the crowd with clever design choices that appeal to kids and their parents. It also means you can justify a higher price point.
Easily marketable. All-over prints are splashy and modern, which help generate social media buzz, amplify brand exposure, and potentially drive traffic to your online store without having to invest a lot in traditional marketing tactics.
Niche idea: Colorful all-over print leggings for kids with popular animals like flamingos, butterflies, or cats.
Compact and lightweight accessories are a cost-effective product category in the dropshipping business model. There’s also a lower return rate and fewer logistical challenges than for other product categories, which results in high customer satisfaction and good profit margins.
When considering high profit margin product categories for your dropshipping business, eco-friendly tote bags emerge as a compelling choice. Let’s explore why they could make a great addition to your product lineup:
Consumer trends: As products go, tote bags from organic cotton match the growing demand for eco-friendly, ethical products that help reduce plastic waste and carbon emissions. Many customers are increasingly choosing to support businesses that share their values and prioritize sustainable practices, and are willing to pay more for sustainably-produced items.
Limited competition: Eco-friendly tote bags are not as common as other types of bags, like backpacks, purses, or wallets. Totes with custom prints and personalized embroidery options are even harder to come by. Their uniqueness adds to a higher perceived value, making them high profit margin products.
Niche idea: Eco tote bags with custom embroidered messages.
Personalized stickers are popular among customers who want to show off their interests and customize their laptops, phones, notebooks, or other personal items they use on a daily basis.
Here’s why it’s a product with good profit margins:
High demand for customization. Selling stickers with attractive designs that shoppers can personalize is a good strategy when dropshipping. Customers appreciate the option of adding images, logos, or text (for example, name tags, date anniversaries, or notebook labels), and are likely to pay more for them.
Sticker packs. You can cater to a variety of customers’ needs by offering sticker bundles and selling packs of 10, 20, 50, or even hundreds of stickers per item. You’ll be able to sell more but they’ll still be relatively cheap for you and easy to produce and ship.
Easy to scale. Stickers make up only a small fraction of the stationary market, and it’s easy to expand into selling cards and prints. Once you attract a wider range of shoppers to your online store, you can start to cross-sell related products to existing customers who won’t mind spending more on small, additional items like stickers.
Niche idea: Personalized wedding stickers with the option to add a couple’s name and wedding date, used for wedding decorations or customizing party favors.
In conclusion, high-margin dropshipping products have the power to revolutionize your ecommerce store’s profitability. By strategically selecting and offering profitable products for your own dropshipping store, you can ensure growth for your online business.
Remember, the key to achieving good profit margins lies in thorough market research, identifying trends, and understanding your target audience. Make sure to continuously adapt and refine your product offerings to meet evolving demands.
Embrace the potential of dropshipping, leverage your newfound knowledge, and watch your profit margins soar. Good luck!
Sandra is a freelance writer and educator with a background in art and communication. She holds an MA in Art Museum and Gallery Studies, and in her free time enjoys reading, museum visits, and outdoor adventures.