Dropshipping statistics can offer some useful insights into the world of online retail.
This model has evolved from being relatively unknown in the ecommerce space to one of the most popular business models around. After all, the dropshipping strategy removes many of the barriers to entry for entrepreneurs to launch their own stores.
With dropshipping, you needn’t worry about storing products, shipping goods, or managing warehouses. That means you can focus exclusively on marketing, branding, and delighting your customers. As the ecommerce landscape has grown, the dropshipping economy has developed with it, with countless platforms and tools emerging to empower new sellers.
In 2020, the global dropshipping market was valued at an estimated $128 billion. Now, it’s expected to achieve a compound annual growth rate (CAGR) of 32% up to 2026. By 2027, the industry could be worth a phenomenal $591.8 billion. It’s no wonder ambitious individuals are looking to get involved.
Whether you’re planning on starting your own dropshipping store or simply want to learn more about what this model has to offer, here are some of the top dropshipping statistics to guide you:
Key Highlights:
- The dropshipping market could be worth $568.7 billion by 2026
- 84% of ecommerce retailers say finding a good supplier is the main challenge to starting a business
- Companies are increasingly turning to AI to support dropshipping strategies
- There are more than 26 million ecommerce sites worldwide
- Around 23% of all online sales are fulfilled via dropshipping
- About 12% of small businesses use third-party logistics and dropshipping companies
- The Asia Pacific market for dropshipping is growing rapidly
- China’s dropshipping market will achieve a CAGR of 30% by 2027
- The US dropshipping market will be worth $24.2 billion by 2026
- In North America, electronics account for about 30% of the dropshipping market
- The print-on-demand market is expected to reach $39.4 billion by 2030
- 27% of companies see the dropshipping model as an easier path to ecommerce
- Amazon dropshippers can earn between $1,000 and $50,000 per month
- Dropshippers fulfill about 34% of Amazon sales
- The top 10% of dropshippers on eBay earn around $7,730 per month
General Dropshipping Statistics
With its low start-up and inventory costs and simple setup processes, dropshipping has quickly become one of the most popular online business models. Analysts believe the growth of the dropshipping market can be attributed to a number of factors, from changing customer preferences since the pandemic to the rise of new technologies and tools.
According to many studies, it’s only a matter of time before the value of the dropshipping space exceeds $500 billion.
The dropshipping market could be worth $568.7 billion by 2026
According to studies into the dropshipping market, the landscape continues to grow rapidly, even despite a number of economic challenges. While the Russo-Ukrainian War has hampered the development of the dropshipping ecosystem, the dropshipping market size still grew at a rate of 27% between 2021 and 2022.
Additionally, the dropshipping business model market is expected to reach a value of $568.7 billion by 2026, representing a CAGR of 31%.
84% of ecommerce retailers say finding a good supplier is the main challenge to starting a business
For any retailer, finding the right partners and suppliers to work with is often key to success. The right suppliers ensure the delivery of consistent quality goods to your customers, improving the chances of brand loyalty. Unfortunately, around 84% of ecommerce industry business leaders say finding and securing a good supplier is the biggest obstacle to starting a company.
A dropshipping platform which provides access to a range of pre-vetted manufacturers and suppliers could be a viable way for entrepreneurs to overcome this issue.
Companies are increasingly turning to AI to support dropshipping strategies
The Business Research Company report on the dropshipping market highlights some of the key trends and challenges in the industry over the last couple of years.
Released in November 2022, this report indicates that many companies have now begun to implement artificial intelligence into their dropshipping strategies, specifically to deliver additional customer personalization, automate processes, and eliminate unwanted data. In 2022, the AliExpress brand AliDropship introduced Sellika, a new AI plugin for WordPress that automatically generates product descriptions for users.
There are more than 26 million ecommerce sites worldwide
Although it’s difficult to know for certain how many sites are using dropshipping strategies in their shipping options in order to build their ecommerce stores, we do know that the ecommerce landscape is growing rapidly. The number of ecommerce stores worldwide is estimated to be around 26 million.
Notably, this number has more than doubled since 2021, thanks to the rapid digital transformation caused by the pandemic. In the US alone, there are 9.5 million ecommerce sites, with more options being created for consumers every day, making it the largest landscape for ecommerce.
Additionally, studies show that Shopify – which has its own dropshipping services for ecommerce sales – is the number one ecommerce site-building technology, with more than 15% of the market share, followed by WooCommerce (13%) and Squarespace (4%).
Around 23% of all online sales are fulfilled via dropshipping
While we may not know exactly how many store owners use dropshipping to manage their order fulfillment processes, we do know that approximately 23% of online sales were fulfilled by dropshipping vendors in 2017, according to Shift4Shop.
The dropshipping vendor suggests that almost a quarter of all online sales are supported by dropshipping, which highlights just how rapidly the marketplace is growing. Since 2017, the ecommerce market has grown by around 17% per year; a dramatic increase in dropshipping stores over the last five years.
About 12% of small businesses use third-party logistics and dropshipping companies
A study by eEfulfillment Service into the fulfillment methods used by large, mid-sized, and small businesses found that dropshipping is a common choice among almost every business type. While only about 6% of micro-sellers said they relied on dropshippers and third-party logistics companies for order fulfillment, that number doubled to 12% for small businesses.
Notably, around 20% of mid-sized sellers said they use dropshipping and third-party logistics companies for their fulfillment model; 25% of enterprise sellers said the same. This made dropshipping and third-party companies the second most popular way to fulfill orders for enterprise stores, falling below manual management of multiple warehouses.
Dropshipping Statistics: Markets and Products
All over the world, dropshipping is capturing the attention of entrepreneurs looking for convenient ways to launch their own companies with minimal effort. However, there are some regions where dropshipping is particularly popular, and certain products capture more attention in the dropshipping space. Let’s take a closer look at the global landscape:
The Asia Pacific market for dropshipping is growing rapidly
The North American region was the largest for the dropshipping ecosystem in 2021, but Asia Pacific is expected to grow rapidly in the years ahead. In fact, according to Grandview Research, the Asia Pacific ecommerce market in general has experienced significant growth in the last few years, thanks to increasing disposable income and the expanding popularity of online shopping.
In 2018, the Asia Pacific market accounted for around 25% of the total revenue generated by ecommerce and dropshipping. Experts believe this particular region will continue to see phenomenal growth, thanks in large part to the number of dropshipping suppliers in Asia.
China’s dropshipping market will achieve a CAGR of 30.1% by 2027
A global strategic business report on dropshipping found China to be one of the fastest growing markets for dropshipping businesses, particularly following changes imposed on the industry by the pandemic. The country falls just behind the US in terms of growth, with a projected growth of around 30% CAGR by 2027.
The United States still comes out on top, however, with a potential value of $45.4 billion in 2020. Other noteworthy markets (geographically) are Canada (21% CAGR) and Japan (18%). In Europe, Germany is considered one of the fastest growing regions.
The US dropshipping market will be worth $24.2 billion by 2026
A cumulative research report into dropshipping also found that the United States market for dropshipping could be worth around $24.2 billion by 2026. The region had an estimated value of around $13.9 billion in 2020.
Notably, however, the report suggested that this number could increase or decrease according to changes in the value of the US dollar in the years ahead. Dropshipping entrepreneurs may benefit from watching the overall economic space when deciding where to get started.
The toys, hobby, and DIY segment is particularly popular in the US
According to a global analysis of the products gaining the most attention within the dropshipping market, toys, hobby, and DIY items are driving significant revenue among online shoppers in certain regions. The US, Canada, Japan, China, and Europe are expected to drive around 21% CAGR for these segments.
These regional markets currently account for a combined market size of around $25.1 billion for these products, and will reach a projected $95.3 billion by 2027. China remains the fastest growing in this cluster of markets, while Latin America is growing at a rate of 23% CAGR.
In North America, electronics account for about 30% of the dropshipping market
In the North American region, electronics account for a significant portion of the potential revenue generated by dropshipping. While this region also invests heavily in hobby, DIY, food, and personal care products, electronics accounted for about 30% of the market.
In general, the North American dropshipping market is expected to show significant growth as cross-border ecommerce continues to gain popularity and online shopping becomes more commonplace.
The print-on-demand market is expected to reach $39.4 billion by 2030
Dropshipping companies can experiment with a variety of different product options when building their online stores. One of the most popular sub-sections of the dropshipping economy is print-on-demand (POD), where customers can add their own designs to clothing and other items before they are shipped via a third-party company.
According to Grandview Research, the global print-on-demand market is expected to reach a value of around $39.4 billion by 2030.
Dropshipping Statistics: Revenue and Conversions
Dropshipping is generating attention in the ecommerce space for a number of reasons: not only is it extremely easy for business leaders to get started in this space, it’s also possible for ecommerce store owners to earn significant revenue from dropshipping.
The average success rate of a dropshipping business is between 10 and 20%
According to Shopify, the top dropshippers from around the web suggest the average success rate for companies is somewhere between 10 and 20%. While this may seem like a relatively low number, it’s worth remembering the success rate for any business is around 25% on average, when considering those capable of surviving for 15 years or more.
While dropshipping might not allow entrepreneurs to achieve phenomenal riches overnight, it does offer significant potential to those who know how to run their company effectively.
(Shopify)
Suppliers can make up to 18% more profit when selling through dropshipping
The value of dropshipping isn’t only relevant to business leaders who want to sell through ecommerce stores; suppliers can also achieve significant success with the dropshipping model. According to some reports, wholesalers and suppliers can achieve up to 18% more profit when they sell products to dropshipping companies rather than relying exclusively on their own stores.
This indicates that there could be significant opportunities available for wholesalers and business partners willing to supply other companies.
Ecommerce retailers using dropshipping can earn up to 50% more
Shift4Shop, one of the leaders in the dropshipping and ecommerce platform landscape, suggests that retailers opting for a dropshipping model can earn more revenue. In fact, by relying on dropshipping instead of using their own warehouses, companies can make up to 50% more profit.
This could be to do with the fact that the dropshipping model helps to eliminate some of the initial and ongoing costs of running a business.
27% of companies see the dropshipping model as an easier path to ecommerce
A comprehensive downloadable report by Grandview Research found that a large number of entrepreneurs consider dropshipping to be one of the easiest go-to-market strategies. Around 27% of retailers say dropshipping is the easiest way to get started.
Additionally, these companies believe the profit margin for dropshipping retail sales could be larger than for traditional retail. However, business owners will need to ensure they’re managing customer orders correctly.
Around 90% of dropshippers fail during their first month
Although the potential for revenue among dropshipping companies is high, it’s worth remembering that not every company will automatically achieve success. Shift4Shop estimates that around 90% of dropshippers fail during the first month because they’re not patient enough to wait for their business model to generate a profit.
Also, up to 90% of customers will leave a store and never return if a product isn’t delivered on time by a dropshipping manufacturer.
Dropshipping Platform Statistics
Certain platforms and ecommerce website builders are more popular among companies experimenting with dropshipping. These solutions help business leaders to access vendors and manufacturers in their chosen niche, allowing them to build powerful stores with minimal coding knowledge.
Dropshipping platforms can also include marketplaces and social media sites. Here’s a quick insight into some of the top platforms for dropshipping:
In 2021, Oberlo had a 31% market share in the dropshipping space
According to some statistics, Oberlo, the dropshipping app usually accessed by Shopify store owners, had a 31% market share in 2021. This made it one of the most popular tools for dropshipping at the time. The second most popular tool was Printful, with around 25% market share.
Other noteworthy platforms included Printify, Spocket, CustomCat, Teelaunch, DSers, and Spod. However, few of these companies compare to the major market leaders.
(Shopgram)
Amazon dropshippers can earn between $1,000 and $50,000 per month
Among business leaders who don’t want to build their own ecommerce store from scratch, Amazon is one of the most popular solutions for getting started with dropshipping. Although the available income for Amazon dropshippers can vary, according to one report, many dedicated professionals can earn between $1,000 and $50,000 per month.
(BlueCart)
Dropshippers fulfill about 34% of Amazon sales
A full analysis report of the dropshipping market conducted by TorchBankz found that more than half of the third-party sellers on Amazon are actually dropshippers. Additionally, dropshippers appear to be responsible for fulfilling around 34% of all sales on Amazon.
In 2019, dropshippers contributed revenues of around $95.4 billion to Amazon’s total profit margin, emphasizing the potential value of the platform for new business leaders.
The top 10% of dropshippers on eBay earn around $7,730 per month
According to Torchbankz, eBay is another significant platform for dropshippers. The top 10% of the retailers selling dropshipping products on eBay earn about $7,730 per month. This means they earn close to six figures each year.
Torchbankz also found that around a quarter of dropshippers on eBay are making more than $1,000 per month. While this might not be enough to make dropshipping an alternative to a traditional job, it does indicate it could be a valuable side business for some professionals. However, with the average eBay dropshipper handling around 1,000 orders a month, there may be quite a lot of work involved.
The Bottom Line
Currently, the statistics available for the dropshipping market are somewhat limited. As a relatively new business model for online retailers in the ecommerce space, dropshipping is still often misunderstood.
However, emerging resources and reports do suggest that the dropshipping industry system could have significant value. As the ecommerce market continues to develop around the world, there’s a good chance dropshipping will only grow in popularity.
Further reading 📚
Dropshipping Statistics Infographic
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