Dropshipping Success Rate: The Ultimate Guide for 2021
Are you in doubt about starting an online store because you’re worried that the typical dropshipping success rate isn’t so high?
We hear contradicting opinions daily from dropshippers who succeeded and those who did not. So, we’ve decided to compare their work processes and see the lessons learned.
Our guide will teach you what to be careful of, how to increase your dropshipping success rate, strategies to succeed at marketing and sales, and more.
What Is a Dropshipping Success Rate?
A dropshipping success rate measures the rate or percentage of people that have started a dropshipping business and succeeded.
Unfortunately, the term “succeeded” is loose in this regard, so there aren’t official numbers that we can take for granted. But, there are many informed estimates.
What’s the Average Dropshipping Success Rate?
Although there are no official numbers, it’s estimated that about 10% of dropshipping businesses have a high success rate throughout the first year of working. Quora users, on the other hand, believe it’s between 10% and 20%.
Of course, this isn’t a rule. The most probable cause for such a low number is due to insufficient data, as well as dropshippers who rush into launching a shop without educating themselves or doing a fair amount of product research.
Dropshipping is a low-risk business model, but that doesn’t mean that it needs zero planning and research. Without proper preparations, every business model fails, regardless of how simple or complicated it is.
How Hard Is Dropshipping?
As a business model, dropshipping is pretty straightforward to understand. A customer places an order in your store, and then you pay it to the product supplier or manufacturer who dropships the product for you and ships it to the customer’s address.
However, dropshipping isn’t a get-rich-quick strategy. There are many product suppliers, niches, skills, dropshipping agent companies, and other details to get familiar with.
Plus, you need to hone your sales and digital marketing skills and get more efficient in running ads.
On the bright side, dropshipping is a low-risk and low-entry model, making it accessible for anyone to try their luck. With the right resources, you can even learn how to dropship with no money.
What Is the Hardest Part About Dropshipping?
Dropshippers have divided opinions on this matter. For some of them, the most challenging part of dropshipping is driving the correct type of traffic.
The actual order fulfillment process is the hardest for others since they have to deal with customer service and different suppliers.
What Are the Pros and Cons of Dropshipping?
Like any other business model, dropshipping has its advantages and disadvantages. Let’s take a look at them.
- No warehousing;
- No inventory management;
- High earning possibility;
- Worldwide markets;
- Many saturated niches;
- High competition;
- No product quality assurance;
- Can’t influence shipping times;
How to Improve Your Dropshipping Success Rate?
What do all successful dropshippers have in common? What are they doing right? Here are the best tips we could gather to help you skyrocket your dropshipping success rate:
Choose a narrowly targeted niche
First and foremost, decide on the niche – pet products, beauty, skincare, clothing, sunglasses, etc.
We recommend finding a niche that’s a bit more narrow-targeted to an audience you can reach. Targeting everyone isn’t a great way to do marketing – you’ll just spend money since you’ll likely have a low conversion rate.
Find profitable products
Next, it’s time to do some product research and find profitable products that are in demand. Opt for evergreen dropshipping products instead of passing trends.
Ensure it’s possible to set a good profit margin on the product of a minimum of 20% over the supplier price.
Find a product and niche that aren’t overly saturated yet still popular.
You can use different tools like Google Trends, Keyword Planner, Sell The Trend, etc., to catch hot products before they skyrocket in popularity. With the help of those tools, you can be the first to sell the product on the market and increase your success rate.
The right social media platform
Some dropshipping businesses swear by being present omnichannel, while others prefer focusing on just one or two platforms.
No matter your choice, ensure your target audience is present on the platform that you choose. Consider the ages of your buyer personas, their gender, demographic, interests, etc.
Reliable product suppliers
Finding reliable product suppliers is possibly the most crucial factor that can affect the success of your dropshipping business.
You need to find trustworthy suppliers who communicate and fulfill the orders on time.
Work with a dropshipping agent
Another proven way of increasing your dropshipping success rate is by collaborating with a dropshipping agent who can help you in different areas of leading your business.
Improve your customer service
It’s much easier to have a high dropshipping success rate if you have repeat customers to upsell and cross-sell. But, for repeat sales, you’ll need customer loyalty, and you can’t get that without a solid customer support system.
Customer service doesn’t stop when someone purchases the product but continues until the product gets delivered.
Adjust your offer
Your product pricing and the profit margins you set will also play a significant role in your dropshipping business success rate.
If they’re too high, your product will be expensive, and you risk having no sales. If they’re too low, you risk having no profits or working at a loss.
A/B split testing
Split testing is the process of testing an ad on two or more different audiences to see which one performs better.
You could also test different elements of an ad – copy, visuals, headline, etc.
When A/B testing, ensure you’re changing one parameter at a time. Otherwise, it’s challenging to figure out why an ad started performing better or worse.
Today, video marketing is on a constant rise. People are too busy to read descriptions and prefer to see the actual product in action.
So, regardless of the social media platform, videos can increase engagement with your audience.
Although video ads can seem more expensive at first, their ROI is much higher, making them more worth your time and effort.
When it comes to eCommerce stores, the appearance of your website can make or break your business.
Beautifully designed websites that attract customers and present the products in their best light can seriously skyrocket your dropshipping business success rate.
Well-structured product page
Your product page is one of the most critical elements of your online store. This is the page where you do the final nudge to close the sale.
With all of that in mind, it becomes crystal clear that your product page should act as a funnel, piquing the interest of the visitor and leading them to make the right decision and click that buy button.
Learn marketing and advertising
Getting better at digital marketing, SEO, and social media advertising can give you an edge and increase your chances of success.
Learning how to run paid ads is perhaps the most important skill as a dropshipper. There are tons of free courses out there to teach you about Facebook Ads, PPC, and anything else you feel would be suitable.
SEO and organic traffic
Although it’s a long-term strategy, search engine optimization can be a great passive and free source of traffic and sales.
In eCommerce stores, it’s important to include search terms and keywords in the product title and descriptions to ensure they rank on search engines.
If you have a bit of a creative side, try your luck at blogging and start posting SEO content that brings value to your customers.
Consistency and creativity
Our final tip on improving your dropshipping success rate is to think outside the box and keep engaging and interacting with your audience.
Stay consistent in your efforts, and don’t give up if you don’t see short-term success right away. Instead, always test and compare data and products to find what works best.
Why Do Dropshipping Businesses Fail?
We dug deep and researched to see what are the most common reasons for dropshipping fails:
Unreliable product suppliers
An unreliable product supplier or manufacturer is perhaps the number one reason for dropshipping failures. A good product supplier is crucial for all dropshipping stores’ long-term success.
You need your product supplier to communicate on time, be available to accept orders, and maintain consistent product quality and shipping times.
To ensure you’re collaborating with the right supplier or product sourcing agent, you can place a sample order to check the product quality and delivery time.
Additionally, we recommend having backup suppliers in case something goes wrong.
Wrong niche or product
No matter your marketing efforts and the budget you spend on Facebook Ads, you will never see the conversion rate you expected if you have chosen the wrong niche or product.
Many dropshippers wrongly choose trendy but over-saturated niches where the competition is crazy high, and it’s impossible to reach anyone without spending a fortune.
Instead, a good practice would be to find profitable niches with low competition. Of course, you still want a good amount of monthly searches for your product but not too many dropshipping stores in the same niche.
Weak profit margins
Another standard dropshipping fail is miscalculating your actual profits. Remember to calculate everything applicable to your dropshipping model into account – product price you pay to the supplier, overhead, inventory storage, shipping, etc.
Only after deducting all of these expenses from the sale price can you figure out your actual profit.
Typically, the average dropshipping profit margin falls between 15% and 20% over the sourcing price. Ideally, this profit margin should be 20% or more.
Wrong audience or channel
We already spoke about having the right product, but even a winning product won’t sell if you choose the wrong social media account and target audience.
All dropshippers use different channels to promote their products – Instagram and Facebook Ads, Google search ads, Pinterest, Snapchat, Twitter, TikTok, etc. But, running ads on each of these social media platforms will yield varying results.
That’s because of the different user demographics that use these platforms. For instance, if your product is appropriate for teenagers, TikTok, Snapchat, or Instagram are where your audience hangs out.
Alternatively, if your target audience is 30+ years old and business-oriented, try Facebook Ads, Twitter, PPC ads, or LinkedIn.
Bad customer support
A lack of connection and communication with your customers results in a bad customer service experience and a decreased dropshipping success rate.
If you want to improve your dropshipping success rate and retain customer loyalty, you must understand that your job doesn’t stop when the product is sold.
Be available to answer any queries, emails, or tickets you get with customer concerns and questions. Ensure you can track their packages (or give them a tracking number) and be of help.
Don’t just cut communication with a customer after they make a purchase. Doing that will leave your customers afraid that they’ve been scammed.
Inappropriate product pricing
Previously, we spoke about having weak profit margins and setting a price that covers your expenses. However, don’t go overboard with the pricing.
Unless you’re selling a unique, private-label product, your online store visitors have likely seen the product elsewhere already. Setting a price that’s too far off your competitors’ price can really decrease your success rate.
Delay in shipping and delivery
Unsuitable shipping methods, delays, or high costs for shipping and delivery can also impact your dropshipping success rate.
A delay in delivery often happens with product sourcing from China, and we know that most dropshippers do that. So, how can you find a suitable shipping method?
One suggestion is offering ePacket as a delivery method since it’s faster and trackable, creating more customer trust.
Alternatively, collaborate with a product sourcing or dropshipping agent with a worldwide fulfillment center and warehouses that are closer to your customers. With this, you significantly reduce the waiting time and boost your dropshipping success rate.
Lack of marketing
It’s either lack of marketing or the wrong type of marketing efforts and activities that can result in a low dropshipping conversion rate.
Launching eCommerce stores and importing product listings is the easiest part of dropshipping. The hardest part is, perhaps, driving sales. And, to do that, you need to find a way to bring traffic to your store.
You can choose to grow your store organically through SEO blogging, social media engagement, Facebook groups, etc., but this is typically a more long-term strategy.
If you want to start making sales right away, you’ll need to start running ads – Facebook, Instagram, PPC, or other sponsored advertisements that fit your target audience.
No matter how incredible your dropshipping product is and how attractive your website, nobody will find you unless you bring traffic. So, don’t forget that marketing is a significant contributor to a high dropshipping success rate.
Unattractive product page
A good product page should have great product shots and act as a funnel to drive people to click the buy button. So, naturally, an unattractive or poorly designed product page can lessen your chances of success.
A well-designed product page should consist of:
- High-quality product images;
- Clear product and shipping price;
- Good call-to-actions (CTAs) positioned properly;
- Clear and SEO titles and product descriptions;
- Social proof or testimonials;
- Instructions of use or product recommendations;
- Product benefits listed in bullets;
A product page shouldn’t be an article or a blog post with large blocks of text. It should only highlight the most important points and be convincing and easily skimmable.
No persistence and patience
And finally, the last reason why you might experience a dropshipping failure is a lack of persistence.
In dropshipping, we do most activities on a trial-and-error basis, and we constantly have to test what works and what doesn’t. We have to learn our target audience, test different products, platforms, and more.
So, having patience and adopting an analytical mindset to compare data and constantly improve are two vital factors affecting your dropshipping success.
Is Dropshipping Still Profitable in 2021?
Absolutely, yes. Although we often hear how saturated dropshipping is, eCommerce is constantly on the rise. That means that people increasingly buy online.
So, as long as you have a winning product, the right target audience, and the skill to market it, dropshipping is still profitable in 2021 and will continue to be so.
How Much Does the Average Shopify Store Make?
Nobody knows precisely how much an average Shopify store makes. However, 2020 data shows that on average, Shopify stores earn $72 per customer. So, the average per month will depend on the number of customers you bring.
Are There Any Real Dropshipping Success Stories?
Yes! More than enough. As a dropshipping agent in China, we’ve personally helped and witnessed many dropshipping success stories.
Who Is the Most Successful Dropshipper?
From the publicly available info, the most successful dropshipper is Irwin Dominguez from San Diego.
Irwin started dropshipping, and within eight months, he made a profit of $1,000,000.
Can You Lose Money Dropshipping?
We think of dropshipping as a low-entry and low-risk business model because there’s no need to invest almost anything in advance on products.
With drop shipping, you don’t have to buy in bulk or warehouse large orders. Your expenses toward your supplier are after someone has purchased the product already from your store.
So, the risk of losing money in dropshipping is high only if you’re buying in bulk and have to pay inventory storage fees for a product that you haven’t tested yet. In this case, you might be unable to sell everything, resulting in a loss.
Another risk to be aware of is the cost of your running ads. Marketing is perhaps the only upfront cost of dropshippers. So, if your campaigns are spending money but have a low or zero conversion rate, you can lose money.
How Much Do Beginner Dropshippers Make?
We researched and compared different success stories to get an average you could make as a beginner dropshipper. Although there are many variables here, like the type of product and profit margins, you can expect anywhere from $200 to $4000 in your first month.
How Much Do Amazon Dropshippers Make?
Mid-level Amazon dropshippers make on average from $1.000 to $50.000/month. But, this is only a rough average – there are many exceptions to this rule on both sides.
What Is the Amazon Dropshipping Success Rate?
Although by listing your products on Amazon, you get to take advantage of their visitors, there’s a lot of competition on the platform.
There isn’t any official data on the exact success rate of Amazon dropshipping. To be successful, you need to find an unsaturated niche with fewer competitors and set higher profit margins to compensate for Amazon’s fees.
How Long Does It Take to Make Money Dropshipping?
We already mentioned patience and persistence above when we spoke about the most common reasons for dropshipping failures.
That teaches us that profits won’t come right away. Typically, it will take several months until you see your first profits. Wondering why so long? To do product research and A/B testing or split testing, see what works, and find your winning product.
Next, you’ll need to prepare, test, and compare different ad formats, social media accounts, and ad placements to learn what performs best for your type of product and audience.
The initial setup of an online store is pretty straightforward – you can build it in less than 24 hours. It’s the preparation and research stages that are more time-consuming. But, don’t skip them – those are the keys to boosting your dropshipping success rate.
So, depending on your skills, preparedness, and a little bit of luck, it will be anywhere from 2 to 6 months until you see your first profits.
Can Shopify Make You Rich?
Shopify dropshipping is perfect for everyone who wants to manage one or more eCommerce stores and sell online.
Unlike WooCommerce and WordPress, which require some technical knowledge, Shopify has a simple drag and drop editor, and a hosting and domain included. That makes it incredibly beginner-friendly.
Additionally, you can take advantage of the Shopify App Store, which offers tons of automation and product supplier integrations like CJDropshipping, Spocket, or Oberlo.
To conclude, Shopify is a great eCommerce builder and a favorite among dropshippers worldwide. So, a Shopify store can make you rich if you know how to market it.
Can You Make Millions Dropshipping?
In the case of beginner dropshippers, making millions with dropshipping isn’t very realistic. But, here we’re talking about inexperienced dropshippers who haven’t tested any products or target audiences yet and aren’t confident in their marketing abilities.
Experienced dropshippers, on the other hand, have developed a sense of what sells and what doesn’t, or the type of audience that they can reach best. So, in this scenario, making millions with dropshipping is a possibility.
Typically, to become rich with dropshipping, you’ll have to dropship high-ticket products with solid profit margins. High-ticket items are high-value, which gives you the chance to earn a lot per single sale (furniture, electronic devices, etc.)
However, beware that such dropshipping products typically come with a higher risk and more store setup and product research costs.
Regardless of your product, if you wish to scale and grow your store, you’ll have to constantly upgrade your digital marketing knowledge and think of creative new ways to reach your audience.
What Is the Dropshipping Success Rate in India?
It’s estimated that the average dropshipper in India sells anywhere between 20,000 INR to 5,00,000 INR (Indian rupees) worth of products in a month. That equals a monthly profit of 4,000 to 2,00,000 INR.
What Niche Is Most Profitable?
There are many profitable niches and high-ticket products you can dropship. Generally speaking, the most profitable niches of 2021 are health, beauty, and personal care.
What Niches Are Trending in 2021?
Although this is far from a complete niche list, here are some of the top trending niches in 2021:
- Personal care
- Travel and outdoors
- Home improvement and DIY
- Tech gadgets
- Pet suppliers
What Dropshipping Niche Has the Best Success Rate?
In the most general sense, fitness, weight loss, relationships, dating, money-making, and self-help niches have the most remarkable success rate.
Of course, even in this case, your dropshipping success rate will largely depend on the exact product you’ve chosen, your marketing efforts, and your competition.
What Is the Next Dropshipping?
Dropshipping is very much alive in 2021, and we see no end in sight. Most recently, a trend of calling dropshippers “Internet retailers” has emerged.
Being an Internet retailer is the same thing as a dropshipper; only some dropshippers claim it can increase your chances of successful product supplier collaborations.
Can a Dropshipping Agent Help Me Improve My Dropshipping Success Rate?
Yes! A full-service dropshipping agent in China can give your dropshipping success rate a boost by helping you source the best products from local manufacturers and wholesalers.
For instance, we, here at NicheDropshipping, can source products from 1688 and Taobao, two of the most well-known marketplaces aimed at local retailers. Sites like these can have meager prices yet high product qualities.
If you’re interested in working with a dropshipping agent, ensure they have warehouses in the US so that your customers can enjoy shorter delivery times. Additionally, white labeling and private labeling as services are also something to consider.
Hopefully, this ultimate guide will help you boost your dropshipping success rate and enable you to scale your online business.
Are you still struggling to increase your success? Feel free to register for free and let us at NicheDropshipping help you improve your dropshipping success rate!
About the Author
Over 10 years experience of foreign trade
Help 2k+ customers improve their dropshipping business