24 Dropshipping Statistics & Facts 2022 [Full Analysis Report]
Forecasts show that the dropshipping industry will grow significantly in the next few years, which is good news for you if you are looking to start or grow your dropshipping business. There are a few key factors behind this growth: The rapid expansion of the eCommerce market. The rise of social media and online influencers. And the COVID-19 pandemic.
With more people shopping online and avoiding physical stores, dropshipping has become an attractive option for many businesses. But is it worth it? This post will look at the latest dropshipping statistics, including the industry's size, best online store builders, trending products to sell, and the most successful dropshipping businesses.
Key Dropshipping Statistics
- The global dropshipping market is expected to reach $102.6 billion by 2025.
- The average order value for a dropshipping store is $23.50.
- The average conversion rate of a dropshipping store is 2.45%.
- There are 24 million eCommerce retailers worldwide, many of which are dropshipping sites.
- Clothing sales accounted for 20.8% of the global dropshipping market size ($142 billion) in 2021.
General Dropshipping Statistics
1. About 27% of online retailers today primarily use dropshipping to fulfill customers’ orders.
More online retailers seem to want to jump into the dropshipping market now that it’s so effective and lucrative. As a result, the dropshipping industry has improved the eCommerce sales and revenue that manufacturers and suppliers earn, which is a win-win! Who wouldn't want to start an online store without worrying about inventory or, in the case of suppliers and manufacturers, a global customer base?
2. 84% of eCommerce retailers cite that the biggest barrier to starting their dropshipping business is securing a good supplier.
The first and most crucial step in starting a dropshipping business is selecting a niche and finding a reliable supplier who can match your needs. The supplier needs to be able to handle orders of all sizes as your inventory needs increase.
Most importantly, you need a supplier who is inexpensive and can accommodate small orders when getting started. The key takeaway from this is to thoroughly research potential suppliers.
3. There are around 24 million eCommerce stores worldwide, many of which are dropshipping websites.
But is it too late to start a dropshipping business, given the state of the e-commerce market? Dropshipping statistics show that of the 24 million eCommerce stores, only one million sell more than $1,000 annually. That indicates that the majority perform poorly, even if there are many dropshippers. You could conclude that the practice is dead for those who dropship inefficiently.
You need to do better than your competition to succeed. Even though the dropshipping industry may be crowded, there is still an opportunity for new dropshippers who run their stores well. You can conquer the competitive landscape with great service, diligence, and innovation.
4. You have 15 seconds to grab the attention of visitors on your dropshipping site.
Perhaps some of you already knew this, but we wanted to provide in this article some important statistics that could be useful when setting up a dropshipping-based online store.
The 15-second rule essentially states that you will lose clients or customers if you can't pique their interest within the first 15 seconds of their visiting your online site. Therefore, have a lovely, simple design that provides clear information about your products. Use a fast-loading theme and one of the best web hosting services, so your site loads in less than 3 seconds. Anything longer than that, and most visitors will leave before viewing anything you have to offer.
Security of your store is something you should give careful consideration to in today's world. You need to sell the right products to the right customers. Therefore, we advise offering distinctive, high-quality products that include appealing visuals. After deciding which products you want to dropship, don't forget to do SEO for each. That will make it easier for clients to find your product.
5. Using urgency, bonus offers, and scarcity in your dropshipping store can double conversions.
The dropshipping business model heavily relies on using expiring header coupons with the words “Click Now for 10% off Your Order – Expires in 1 Hour” or “Click for Free Shipping.” If you give web visitors time to consider their purchase, they will talk themselves out of it.
You can also set a stock restriction and include a counter to track how many products are still available. Absolutely no one wants to miss out on a product. It is a very effective persuasion strategy.
Finally, have bonuses to make the deal more enticing. The phrase “free shipment” might suffice. Alternatively, consider pairing the product with another necessary item. For instance, pair a bottle of cleaning spray with the yoga mat you are selling.
These are some of the simplest strategies to use and will practically increase the conversion rate of your dropshipping store.
6. By 2023, the global dropshipping market is anticipated to reach a market cap of $243 billion.
(Statista, Grandview Research)
According to in-depth research by specialists, the global dropshipping market will expand as follows in the near future:
$203 billion in 2023, $301 billion in 2024, $374 billion in 2025, and $476 billion in 2026. By 2025, it is anticipated that its compound annual growth rate will increase by 28.8% following the growth of retail sales and online shoppers’ disposable income. This fulfillment model that has revolutionized online shopping is one of the fastest-growing in this forecast period and is expected to absorb an even larger share of the e-commerce market.
Grandview Research also published a free sample report in their extensive portfolio predicting the growing demand for e-commerce companies and the size of the global B2C eCommerce market reaching $7.65 trillion by 2028.
The same exact research continued to show us that 56% of those surveyed see themselves buying from a physical store in the next 5 years. Those consumers say they want to touch and see the product and the product’s sale price instead of relying on images and reviews. This shows that there’s still hope for traditional retailers.
7. Fraudulent or unauthorized transactions may impede market expansion.
Since dropshipping primarily entails online shoppers transacting, payment security is one of the major issues when selling products or fulfilling customer orders online. That is because payment gateways are vulnerable to cyberattacks and security issues.
Unlike retail sales, eCommerce sales and services need a delivery infrastructure to prevent delayed, lost, or damaged goods. Therefore, difficulties with logistics and product delivery from either the manufacturer or supplier may limit the market growth of dropshipping services.
8. By 2025, the Asia Pacific region will have 3,900 million smartphone devices.
(Global System for Mobile Communications Association)
Following the expansion of internet connectivity over the past few years, the Asia Pacific and Indian e-commerce market size has grown rapidly, leading to an increase in the number of dropshipping companies.
Dropshipping services enable small businesses to concentrate on their core marketing activities or skills while saving money on the wholesale price, stock inventory costs, traditional distribution channels, and inventory management software. They can now compete with established industry giants thanks to dropshipping. E-commerce companies have adopted dropshipping services due to the advantages mentioned above, which have increased market growth and online sales in the Asia Pacific region.
Because of changing consumer behavior and market trends like voice-activated chatbots, virtual assistants, and mobile e-commerce, the market growth in North America, like the Asia Pacific, is predicted to accelerate. Additionally, advantages like multiple shipping options and a simple ordering process and returns draw customers to online shopping platforms.
9. Profit margins for dropshipping typically range from 10% to 30%.
Dropshippers interact with clients, handle payments, take consumer feedback, and promote and market their goods. Many fail because they multitask and don't take their obligations seriously. To compete, they have to cut their profit margin, making their company unprofitable, which is why just 10% of dropshippers are profitable.
Contrary to get-rich-quick YouTube gurus’ beliefs, this is not a business where you can instantly get rich due to difficulty locating customers and a good supplier. You should be ready to lose money for at least a year if you decide to start dropshipping because very few of them are profitable in their first year.
10. Dropshipping can increase the profitability of an eCommerce store by up to 50% compared to onsite inventory management.
Traditional retailers maintaining onsite inventory usually cannot buy as much inventory as the manufacturer might like – whether due to lack of warehousing space, a small budget, or both. By dropshipping on your online store or well-established giants like Amazon or eBay, you won't need to maintain space for inventory or buy in bulk, reducing overhead costs.
11. Clothing sales accounted for 20.8% of the global dropshipping market size ($142 billion) in 2021.
Jewelry (14.4%) and home & garden sales (11%) came in second and third place. The global e-commerce sector was dominated by crafts, which accounted for 3% of sales, while personal care electronics barely made up 3.7%.
The fashion segment is predicted to increase significantly between 2022 and 2025 due to rapid globalization and modifications in consumer spending behavior. Over the forecast period, it is also anticipated that fashion will be driven by a growing consumer preference for branded goods and the accessibility to various brands on a single e-commerce platform.
Over the same projection period of the dropshipping market, the personal care electronics and food industry is anticipated to post a CAGR greater than 30.0%. The expansion is predicted to be driven by rising consumer spending on cosmetics, fragrances, skincare, and other personal care products. Additionally, rising household furniture spending has influenced the demand for luxury furniture items, fueling the growth of the furniture and appliances global dropshipping market size.
12. There are 5 main things to avoid when choosing which dropshipping items to offer in your store.
Here are a few product niches and categories you should never consider dropshipping in your online stores:
- Typical Household Products: This covers things that shoppers frequently buy on the cheap at a corner store. You won’t be able to beat Walmart's prices.
- Big and Heavy Items: Avoid being seduced by the enormous profit margins of items like home appliances and furniture (and do not allow your supplier to try to persuade you otherwise). These items are prone to damage, and your profits will be eaten up by their weight.
- Sensitive Items: It can be difficult for plates, glass items, etc., to arrive undamaged (especially over international transit). A safer alternative is plastic and other non-breakable items.
- Weight Loss Pills and Supplements: You cannot use Facebook ads due to Facebook's regulations on health-related advertising. You’ll have to use dodgy promotions to get your products in front of consumers, as account bans are the norm.
- Footwear and Apparel: Customers cannot try the products on, and because clothing sizes vary, you will handle many returns (most of those goods cannot be resold).
13. Shopify and WooCommerce are the most popular e-commerce platforms.
WooCommerce, a WordPress plugin that allows users to turn their website into an eCommerce site, is now the most popular platform, with over three million active users.
Both eCommerce platforms are excellent and have advantages and disadvantages, so it's crucial for online store owners to thoroughly investigate each of them to choose which one best suits their needs. Check out these successful Shopify stores to get inspired.
14. Dropshipping stores with at least one social media account often generate 32% higher revenue.
We don't know what will persuade you to start a Facebook page if the information above doesn't. This information makes it abundantly evident that your key marketing activities must include posting and being active on at least one social media platform.
You now understand that using social media channels for business purposes goes beyond simply raising brand awareness or finding new ways to drive visitors to your website. Additionally, it will increase your online sales, which is what you want, right?
According to social media marketing statistics, one of the trending ones you should be on is TikTok. The app currently has more than one billion monthly active users worldwide and is growing. TikTok has been downloaded more than 200 million times alone in the US.
Contrary to popular belief, Statista reports that more than 75% of TikTok users in the US alone are 20 years or older. The prevailing perception is that younger users under 18 predominate on TikTok.
Recent studies found that, on average, TikTok users spend 89 minutes daily on the app! Due to that, TikTok is essentially a haven for dropshippers wishing to advertise or provide dropshipping services and goods on social media.
15. Popular WordPress dropshipping plugin AliDropship makes it simple to ship products from (AliExpress) and occasionally the United States.
Thanks to the plugin, you won't have to worry about manually filling your customers' orders. Every time someone makes an order, AliDropship automatically makes an order with your supplier on AliExpress. AliDropship is one of the most dependable sources of dropshipping stats and data.
16. 86% of AliDropship users prefer niche online stores.
Therefore, general online stores make up only 14% of dropshipping eCommerce retailers, which is not surprising. Niching down applies to the eCommerce industry as well. In business, aiming to be a generalist and jack of all trades hasn't always been a good idea. The key has always been to pick your target market and niche wisely.
17. Gadgets, devices, and accessories are sold by 18.5% of dropshippers on AliDropship.
The gadget and device niche is the most crowded among all the numerous markets dropshippers operate in. Many young people and millennials love frequently switching up their mobile phones and other electronics as a mark of fashion. Therefore the reasons for this are not implausible.
Additionally, as soon as new technology is launched, notably phones, millennials are eager to purchase them. The baby & children's product niche follows the gadget niche with a sizable number of dropshippers. Due to the broader customer base, toy items sell like hotcakes. But given how profitable this niche is, it goes without saying that it's also very competitive.
Statistics on Amazon Dropshipping
18. There are currently more than 5 million active sellers on Amazon.com.
According to new data from Amazon, roughly 3718 new merchants join the platform daily, adding to the overall growth in the number of sellers and Amazon sales. If you believe that the dropshipping market is saturated, you should think again because the industry is still very lucrative and expanding quickly.
19. About half of all sales on the Amazon Marketplace are from independent vendors.
Even though not all use dropshipping, a greater proportion of them do. To be exact, 34% of 50% are dropshippers. That percentage in 2021 was valued at $95.37 billion.
20. Some SMBs from the US sell more than 4000 items per minute on Amazon.
This fact only serves to highlight how successful online shopping is. The 4,000 per minute is a significant increase above the earnings of certain individual e-commerce store owners.
Statistics on eBay Dropshipping
21. Because of its C2C and B2C business models, eBay is a well-known online retailer that makes dropshipping easy.
Most eBay sellers are dropshippers who purchase goods from Amazon and AliExpress before reselling them on eBay for a profit. As a result, eBay statistics may also provide a reliable picture of the developments and state of dropshipping.
22. The top 10% of eBay dropshippers make an astounding $7,731 profit monthly or $92,772 annually.
eBay dropshipping is an incredibly profitable way to make money online. One-fourth of sellers dropshipping on eBay generate more than $1,000 in profit per month. Even while the average income of the top 10% is fantastic, many of them still get a respectable monthly profit. Since most eBay sellers do it as a side gig, their $1000 monthly income is not awful enough.
23. The typical eBay dropshipper makes $2.67 off of each sale.
The top 10% of sellers dropshipping on eBay receive an average of $3.64 from each sale. The bottom 10%, who make up the lowest percentage, also lose $2.53 on each sale. According to data, they also process 969 orders monthly, which yields a monthly profit of over $2500.
24. eBay dropshippers make an average cashback profit of $693 per month.
Cashback is definitely something you've heard about. If not, check out these credit card statistics. Cashbacks are the sums you’re credited each time you transact using your credit card. It's a reward that credit card issuers provide you to encourage you to continue using their cards.
As a dropshipper, the more orders you receive, the more purchases you make using your credit card, which translates into higher cashback earnings.
Grow Your eCommerce Business With Dropshipping
In conclusion, dropshipping statistics and facts show that the business model is growing in popularity. That is due to its numerous benefits, such as low startup costs, flexibility, and the ability to reach a global market.
However, be prepared for a challenging uphill battle if you're thinking of starting a dropshipping business. To get started for free, here are the best eCommerce platforms to consider:
- Square Online uses Artificial Design Intelligence (ADI) to help you build your dropshipping store, making it very easy to use. The platform allows you to sell unlimited products on the free plan.
- Weebly is a no-code eCommerce platform with a free SSL certificate to keep your website secure. To increase conversions, the platform allows you to create a storefront page effortlessly, highlighting discounted products, seasonal items, and best sellers.
- Big Cartel is perfect for startups and small businesses, as the Free plan has no transaction fees. The platform offers customizable and SEO-friendly mobile themes that automatically adapt to any screen.