How to Make Money Dropshipping: The Ultimate Profit-Making Guide

by Stanley


Most experts and entrepreneurs agree that dropshipping is a profitable business model but how profitable is it? Can you make enough money to live on through dropshipping? More importantly, what do you need to do to make a decent profit?

In this guide, we address these essential questions and discuss some helpful tips on how to make money dropshipping.

Would you like to learn more? Read on.

How to Make Money Dropshipping

Is Dropshipping Worth It?

Before we go any further, let us talk about the elephant in the room. Yes, dropshipping is a worthwhile business.

Admittedly, the competition can be tough and not all products offer great profit margins. However, if you know how to navigate the industry, you can make lucrative profits. There are also many opportunities you can explore to keep growing your business.

How Much Do Dropshippers Make on Average?

Unfortunately, there is no standard answer to this question. The amount of money you earn as a dropshipper is determined by multiple factors. They include (but are not limited to):

  • The niche of products you choose to sell
  • How well you market your store
  • Consumers’ preferences and purchasing power

Nevertheless, it is important to mention that this does not only apply to dropshipping. It would be just as difficult to estimate how much all bakers or hairdressers earn. Every entrepreneurship journey is unique and your decisions will have a significant impact.

How Long Does It Take to Make Money From Dropshipping?

How to Make Money Dropshipping

Dropshipping success does not happen overnight. It may take a few months before you begin to make steady profits. However, consistent and effective marketing through multiple platforms could draw more traffic to your site and help you break even sooner.

Pro Tips: How to Make Money Dropshipping

With those pertinent questions out of the way, let’s take a turn and focus on how to make money dropshipping. Here are some tips that can help you ensure that your store brings in healthy profits.

Choose the Right Product Niche

A product niche refers to a particular group of products that is preferred by a specific segment of consumers. Home appliances, for example, make up a product niche because they are related products that are usually bought by homeowners.

Choosing the right product niche is essential in dropshipping because it determines how much you make. This is because:

  • Some product niches have higher profit margins
  • Some products have higher demand and, therefore, attract higher sales and earn you good profits

It is thus safe to say that a good product niche should have a reasonable dropshipping profit margin and have high demand.

Additionally, aim for a product niche that is not overpopulated by other dropshippers selling the same products. Too much competition can lower prices in the market and you would have to work extremely hard to attract customers to your store.

Choose a Product Niche

It is best to rely on product research data to identify profitable niches in your dropshipping market. That said, some leading product niches include:

  • Women’s clothing and accessories
  • Home care products
  • Cosmetic products
  • Phones, tablets, and their accessories

Choose the Right Suppliers

To illustrate the role of suppliers in your dropshipping revenues, let us recap on how dropshipping actually works.

  • You list products in your store
  • Customers order from your store and pay the listed prices
  • You share the order with the dropshipping supplier and pay a wholesale price
  • The dropshipping supplier packs and ships the order directly to the customer

The difference between the price listed in your online store and the wholesale price that you pay to the supplier is your profit.

As such, it is crucial that you find a supplier that offers you a friendly wholesale price. This would allow you to price products in your store at a fair markup that is affordable to customers but still earns you a good profit.

In contrast, if your supplier offers you high prices, your profit margin will likely be small. Adding high markup to an already high price would drive customers away.

Where possible, try and partner directly with product manufacturers or wholesale dropshipping suppliers. They often offer much better prices. Further, compare multiple supplier options before you commit and make an effort to negotiate fair prices and shipping rates.

Keep Your Operating Costs Low

In any business, your profits are the funds you have left after settling all your operating costs. In dropshipping, such costs include:

  • E-commerce platform subscription fees
  • Taxes
  • Internet service fees
  • Subscription fees for dropshipping tools and apps
  • Advertising costs

One way to keep your expenses on a leash is to be discerning about your subscriptions. Keep in mind that they require regular payments and multiple subscriptions can add up to a significant expense.

Keep Your Operating Costs Low

Most e-commerce platforms and dropshipping apps offer different membership plans. It can be tempting to pick the ‘pro’ plan that is often packed with features.

However, a better approach would be to compare plans and pick the one that offers you the best value for money. As your business grows and develops more complex needs, you can always advance to higher subscription plans.

It is equally advisable to avoid signing up for too many dropshipping tools. After all, there are only so many you can use at a go. It is better to try and choose one effective tool for each automation task.

Add Value to Boost Your Profits

Add Value to Boost your Profits

When customers feel that your dropshipping store offers them more value for money, they may be more inclined to pay higher prices.

Let’s put that in perspective.

Consider high tea served at a fine dining establishment versus buying a cup of tea at a Starbucks. At the end of the day, it is all tea but you would pay more at the fine dining restaurant due to the experience it offers.

The same applies to a dropshipping store; more value can help you boost your profits by charging a higher price. You can add value by:

  • Customizing products- a t-shirt is just a t-shirt but if you offer to print a personalized message on it for customers, you would be offering more value and can charge more for it.

Tip: You can work with a print-on-demand dropshipping supplier to deliver this service to customers.

  • Offering expert consultations- if you are knowledgeable about the products you offer, you can offer consults to advise customers on which products are best for their specific needs. It makes their shopping experience more fulfilling.
  • Private labelingin private labeling, you would work with a manufacturer to develop products that are unique to your store’s brand. As the brand owner, you would thus be at liberty to set a price that earns you a rewarding profit.

Offer Sales and Package Deals

Product offers are a tried and tested way to boost sales and improve revenue. The trick is in how you tailor such offers for different occasions.

For example, as you introduce your store, you can have a launch sale where prices are slightly discounted. Later, when you are more established, you can advance to creating product bundles.

Offer Sales and Package Deals

Product bundles are a package of items that a consumer can use together; one necessitates the other. If you sell clothing, for instance, you can pair jeans with different top options and offer them at a bundle price. This achieves a couple of things:

  • It gets customers to easily buy more items and spend more
  • It creates a unique shopping experience that differentiates your store from competitors

Offer Gift Cards and Vouchers

Gift cards and vouchers are not common among dropshipping stores but they can be a great revenue stream. They are highly popular during the festive season and can boost your sales exponentially.

Moreover, consider that not everyone that visits your store may need what you have to offer but they may know someone that does. If you have gift cards, they can easily purchase one for their loved ones and introduce new people to your store.

Diversify Your Income Streams

When you just start dropshipping, it may be best to only have one store. This would give you time to learn the ropes and understand the market you are dropshipping in.

Later, when you are more seasoned, you could identify other profitable niches and set up other dropshipping stores.

Advance to High Ticket Dropshipping

Advance to High Ticket Dropshipping

High ticket dropshipping is a type of dropshipping where you focus on high-value products. Such products include electronics, exercise equipment, high fashion items, and other premium products.

Due to the higher prices of these items, you would be able to earn a highly profitable commission from suppliers or earn a significant markup. You would also not necessarily need high volumes of sales to make a good income as is the case with ordinary dropshipping.

That said, high ticket dropshipping has a very specific target market. It is vital that you do some research before you set up your high ticket dropshipping store so that you get it right.

Explore New Markets

Explore New Markets

The regions you drop ship to can either increase or limit your dropshipping income. The broader the market you cover, the more buyers you can cater to. On the flip side, if you only handle orders within your state or locality, you would be limited to only a few customers.

Still, take some time to research potential markets and their needs. While they may indeed be profitable and have demand for your products, they may require a unique marketing approach.

Further, for you to venture into new markets, your suppliers have to have the capacity to fulfill orders in that region. Subsequently, it is best to always choose suppliers that offer services such as worldwide fulfillment via reliable shipping options.

To Sum It Up

There is no one-size-fits-all solution when it comes to making money from dropshipping. The great part though is that all the options on this list can help you work towards a lucrative income.

Simply choose what is ideal for your business and its consumer market.

Further, at NicheDropshipping, we provide comprehensive dropshipping services all under one roof. You can count on us for:

As your dropshipping partner, we would also offer helpful resources and advice to help you scale your business and increase your revenue streams.

Contact us to learn more about the dynamic solutions we can offer you.

About the Author

stanley nieh ceo


Over 10 years of experience in foreign trade
Helped 2k+ customers improve their dropshipping businesses

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