Dropshipping Statistics & Trends for 2023

August 25, 2023

Dropshipping statistics lead

The dropshipping sales and fulfillment approach is gaining momentum around the world. Today, it’s about much more than re-selling AliExpress goods in the US at a markup, though. Dropshipping is, in fact, a $240 billion market as of 2023. And over 170,000 new dropshipping stores have been created in 2023, so far.

But what is dropshipping exactly? How do people make money with it? And what’s the most popular dropshipping niche?

Marketers and ecommerce retailers are right to be asking these questions. But there are even bigger questions to answer. For instance, how big are regional dropshipping markets? What’s the best dropshipping platform? And what does the future of dropshipping look like?

In this article, we answer all these questions and more using the latest dropshipping statistics and explore current and future dropshipping trends. Let’s dive in.

Key Dropshipping Statistics & Trends for 2023

The dropshipping market is worth $249.16 billion in 2023. It’s forecast to grow at a CAGR of 30.6% and reach $724.26 billion by 2027.
81% of the of the most successful dropshippers (top 1%) are located in the US.
The dropshipping fashion segment is predicted to grow at a CAGR of 24.9% from 2023 to 2030.
Only 10% of dropshipping businesses succeed, and 90% fail during their first year, if not the first month.
Only 1.5% of all dropshipping businesses have an MRR of over $50,000, and only 10% of dropshippers are profitable.
Over 33% of Amazon third-party sellers are dropshippers.
About 25% of eBay dropshippers make over $1,000 per month, and the top 10% of such dropshippers make $7,700 a month in profit.

What Is Dropshipping?

Dropshipping is a method of order fulfillment where the seller relies on third parties to supply inventory. In other words, the seller doesn’t have a warehouse or a delivery model set up – all they do is list products on their webpage or online store.

Once someone purchases the goods from the seller, they notify the manufacturer or the supplier, who handles the logistics of shipping the product to the consumer. So, the seller is, in effect, acting as an agent or intermediary to the supplier.

As you’ll see from this article, dropshipping has become a popular business model for ecommerce, and it is a huge market with large growth potential. Let’s take a closer look at dropshipping market statistics.

Dropshipping Market Statistics

SHARE-OF-DROPSHIPPING-IN-THE-E-COMMERCE-MARKET-2023

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Dropshipping market growth is primarily driven by the growth of the ecommerce market, which is expected to reach $3.65 trillion in 2023 and $5.56 trillion in 2027.

In 2023, Dropshipping made up 6.4% of the ecommerce market. We’ll now take a closer look at this market slice to analyze it.

Total Market Size

dropshipping market

Source: Research and Markets

As of 2023, the dropshipping market is worth $249.16 billion – a 29.3% increase from the 2022 figure of $192.76 billion. The dropshipping market is forecast to grow at a CAGR of 30.6% and reach $724.26 billion by 2027.

Given that the ecommerce market is forecast to grow to $5.56 trillion by 2027, the dropshipping market will make up over 13% of the overall ecommerce market by that year.

Market Size by Region

In terms of dropshipping in different regions, the APAC region and the North American region are the markets to pay attention to. In 2022, APAC had a market share of 33.9% of all global dropshipping revenue. When it comes to China, dropshipping is forecast to grow at a CAGR of 29.8% in the years to 2030.

North America, on the other hand, is poised to be the fastest-growing dropshipping market, with a CAGR of 23.5%. Almost 81% of the most successful dropshippers (top 1%) are located in the US. The remaining best of the best are from Canada (5.2%) and the UK (4.1%).

As for Europe, growth is less impressive, but it’s still a large dropshipping market. Germany is the biggest territory, with an estimated CAGR of 16.9% until 2030.

Dropshipping Statistics by Industry

dropshipping segments

Source: Grand View Research

But what are people buying in these huge dropshipping markets?

With the growth of online shopping during the pandemic, certain B2C and C2C segments have grown significantly, and the dropshipping sector is no exception to this.

With increased globalization and interest in foreign products – a niche dropshipping can fill, thanks to close links with websites like AliExpress – dropshipping works very well for some industries and products.

In this section, we’ll take a look at some of these products.

Most Popular Segments for Dropshipping

WHAT-DO-TOP-1-OF-DROPSHIPPING-STORES-SELL.

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According to Grand View Research, fashion was the largest segment for the dropshipping market in 2022, and the trend continued in 2023. Other popular categories include food and electronics.

Let’s take a closer look at some of these categories.

Fashion

Dropshipped product categories on Shopify statistics

Source: Statista

The fashion dropshipping segment is predicted to grow at a CAGR of 24.9% between 2023 and 2030. The popularity of fashion dropshipping can be explained by consumers’ interest in different brands and their wider availability on different platforms.

It’s, therefore, no surprise that 20.8% of all dropshipping sales in 2021 were in the fashion niche. Meanwhile, 26% of the top 1% of dropshipping businesses sell apparel. Over 22% of all dropshipping stores sell at least some fashion items.

Apparel and accessories were big categories for dropshipping on Shopify in 2021. Over 1 million items of clothing, jewelry, and accessories were dropshipped that year with Shopify.

Electronics, Toys & Hobbies

The electronics segment of the dropshipping industry is on par with the toys and hobbies segment in terms of global market size, amounting to approximately 19% each.

In North America, electronics has the largest market share, at 30%.

As for the toys and hobbies segment, it’s also big in the US, as well as other markets, and is expected to grow at a CAGR of 20.1% in North America, Europe, China, and Japan. Goods in the “toys and hobbies” category are sold by 4.1% of the top-performing dropshippers.

Home & Garden

This segment, which includes furniture, appliances, and other household items, is another popular one, accounting for 11% of all dropshipping sales in 2021. The market was valued at almost $30 billion in 2020 and is forecast to grow at a CAGR of 12.3% in the years to 2028.

Dropshipping Business Statistics

Now that we know which products are hot in the dropshipping space, let’s take a closer look at the business model and how successful it can be.

share of dropshippers

Source: AppScenic

Dropshipping accounted for just over 6% of the entire ecommerce market in 2023. However, that doesn’t mean that only 6% of ecommerce businesses are using dropshipping.

In fact, according to Ecommerce Platforms, 27% of online orders were filled by dropshipping as of 2022. Given that the market has been growing for the last few years, it’s safe to assume that that percentage has increased since then.

Success Rate

DROPSHIPPING-FAILURE-RATES

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The success of a dropshipping business depends on the number of consumers who shop online. According to Oberlo, that figure is over 2.64 billion consumers, or 33% of the world’s population, as of 2023.

However, a large number of dropshipping businesses fail, and a big reason for this is that people perceive it as a “get rich quick” strategy.

It’s far from that, however – as with any business, you need to put in the hard work before you reap any rewards. In fact, some experts estimate that only 10% of dropshipping businesses succeed, and 90% fail during the first year, if not the first month.

Challenges of Dropshipping

dropshipping challenges

Source: AliDropShip

When you’re running a dropshipping business, you’re heavily reliant on third parties, such as your suppliers and their delivery partners. For this reason, you have little control over them, so you must ensure you can trust them.

This challenge is so acute that it’s cited by 84% of ecommerce retailers. It’s often the case that partners are ideal at the launch of a dropshipping business but then prove to be unreliable as the business grows.

Other dropshipping challenges, revealed by a study by AliDropShip, include:

Marketing (experienced by over 63% of businesses)
Choosing a niche (10%)
Setting up an online storefront (10%)
SEO (8.5%)

Dropshipping Revenue & Profit Statistics

DROPSHIPPING-PROFITS-STATISTICS.

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According to DoDropshipping, only 1.5% of all dropshipping businesses have an MRR of over $50,000. That’s a lot of money, and it takes really nailing the niche and partnerships to get to that point. Moreover, Shopify experts say that only 10% of dropshipping businesses are profitable.

However, since dropshippers don’t have overhead costs of warehousing and inventory, they can earn higher profits than traditional retailers as they scale.

Dedicated dropshipping solutions from platforms like Amazon and Shopify can help reduce costs and increase profits by up to 50%. We’ll take a closer look at dropshipping platform statistics in the next section.

A report by BlueCard tells us that most successful dropshippers make an average profit of 20-30% from each transaction. As with any goods-focused business, products of higher value tend to provide higher margins but make up fewer sales overall.

On the other hand, suppliers make an additional 18% profit by selling via the dropshipping channel rather than through direct sales.

Dropshipping Statistics by Platform

Given the popularity of dropshipping, it’s no surprise that big ecommerce platforms like Amazon, eBay, and Shopify are tapping into the market by offering dedicated dropshipping solutions. In this section, we’ll take a look at dropshipping statistics related to each platform.

Shopify Dropshipping Statistics

Dropshipped products on Shopify statistics

Source: Statista

Shopify is one of the most popular ecommerce and dropshipping platforms, with a dropshipping market share of over 11.8%. 2021 was the best year for Shopify dropshippers, regardless of the software solution used.

The most successful Shopify solution was Oberlo, with over 50,000 products sold via dropshipping in 2021. It’s a huge increase from the 2019 figures of less than 20,000 dropshipped products. Fashion is the most popular niche for dropshipping on Shopify.

Amazon Dropshipping Statistics

DROPSHIPEPRS-ON-AMAZON

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Over half of all products sold on Amazon are sold via third-party suppliers, and over a third of such sellers are dropshippers.

According to a BlueCart study, an Amazon dropshipper can make between $1,000 and $50,000 a month in revenue. However, many of them quit quickly.

eBay Dropshipping Statistics

DROPSHIPEPRS-ON-EBAY-AVERAGE-PROFIT-PER-SALE

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Thanks to eBay’s B2C and C2C business model, it allows dropshipping, and the practice can be lucrative. About 25% of eBay dropshippers make over $1,000 per month, and the top 10% of such dropshippers make $7,700 a month in profit.

On average, an eBay dropshipper makes a profit of $2.67 per transaction and processes 969 orders per month. You can make more or less than that or even lose money, however, depending on where you are with your business, your eBay costs (above 250 free listings), and store fees.

AliDropShip Dropshipping Statistics

alidropship niches

Source: AliDropShip

AliDropShip is a software solution developed specifically for dropshippers. With features like WordPress integration and an AI tool that generates product descriptions, it’s a popular product that hosts over 20 dropshipping stores.

The ARPU of such stores is $2.48, and most buyers are from the US, Canada, and the UK. As with Shopify, fashion is a popular niche on AliDropShip, together with electronics and accessories.

Top Dropshippers Statistics

Who are the people who have made a fortune with dropshipping, and what do they sell?

In this section, we’ll introduce you to the top dropshippers from around the world, their products, and their successes.

Cole Turner

Cole Turner is a young American entrepreneur who made $2 million in jewelry dropshipping sales and $200,000 in profit when he was in his early twenties.

Initially focusing on general merchandise, Turner subsequently narrowed his offering to jewelry and fine-tuned his Facebook advertising strategy. As a result, Turner made millions in sales and subsequently sold his store to another entrepreneur.

Andreas Koenig & Alexandra Pecka

These two Australian dropshipping entrepreneurs started out in the toothpaste niche but eventually found success in the pet industry. As of 2020, they were making $500,000 a month in the pet niche through dropshipping, with an ARR of $10 million a year.

Sarah & Audrey

Sarah and Audrey, two French entrepreneurs, are a success story for influencer marketing in dropshipping. They both had their own dropshipping businesses before they joined forces in 2019.

Now, they’re making millions in sales in their dropshipping business, having successfully leveraged influencer marketing and launched in the US.

Does Dropshipping Have a Future?

Dropshipping products

Ecommerce is a huge market that’s only poised to grow in the coming years. But what does it mean for the dropshipping sector?

We’ve seen that the dropshipping market is also growing around the world, and it’s expected to make up 13% of the ecommerce market in the future. But what are the key trends that might make this happen or that might hinder its progress?

Low Entry Barrier But High Competition

Entrepreneurs are drawn to the simplicity of dropshipping and its low operational costs. Ecommerce platforms have made it easier than ever to set up a dropshipping business, allowing sellers to reach a global customer base with minimal investment.

However, this growth has led to high competition and challenges.

For instance, many dropshippers source products from the same suppliers, resulting in identical products being sold by numerous sellers. This is a significant reason why eBay restricts dropshipping. It can decrease brand awareness and lead to price wars, ultimately affecting the seller’s profits.

Additionally, the lack of control over inventory and shipping can result in fulfillment issues, with high rates of returns being a big issue for retailers.

Regulation & Compliance

Dropshipping delivery statistics

Dropshipping is legal in most places. However, a big concern in the dropshipping sector is quality assurance. As dropshippers rely on third-party suppliers, maintaining product quality and safety standards and combating counterfeit goods can be a challenge.

Dropshippers may need to establish more transparent relationships with their suppliers to address this concern. Quality audits, product testing, and collaboration with reputable suppliers can help maintain a level of product quality that meets regulatory standards and builds consumer trust.

Moreover, as data breaches and privacy violations are increasingly common, GDPR and other data protection regulations have become important considerations for any ecommerce business.

Dropshippers collect and process customer data, making them subject to such regulations. We expect that operating in the dropshipping space will likely involve stricter adherence to data privacy regulations in the future.

Tech Integration

Many ecommerce platforms offer tailored dropshipping solutions. With advancements in AI-driven customer support, personalized marketing, and advanced analytics, we can expect even more innovation in the dropshipping market.

Closing Thoughts

Dropshipping can be very lucrative, but it’s not a “get rich quick” scheme, as many believe it to be. It’s a very big market, and players who nail their niche and leverage software solutions offered by big ecommerce platforms can become very successful entrepreneurs.

However, there’s no universal recipe for dropshipping success. Every niche and every entrepreneur is different, and some areas are more adversely affected by the challenges we’ve described than others. For this reason, research, dedication, and hard work are a must for any successful dropshipping business.

References

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