It is highly anticipated that dropshipping online business industry will have significant success in the upcoming few years. Significant improvements in the eCommerce market support this high anticipation since 2014.
With millions of people switching to online shopping, it is now one of the most sought businesses. Not to mention the retail stores, which have also switched to dropshipping, it has also become the automatic choice for most young entrepreneurs.
Now, keeping up with ever-evolving statistics can be tough. So, in this article, we have compiled some of the latest facts and statistics which support most people’s hypothesis and why dropshipping is a booming business in the eCommerce business platform.
General Dropshipping Statistics, Facts & Reports
There are tons of statistics that support the booming success of drop shipping. For instance, some of its facts include:
- The AOV, or the Average Order Value of any dropshipping store, is approximately $23.50.
- Most conversion rates of the dropshipping store stand out to be 2.45% on average.
- Currently, drop shipping is dominating the eCommerce market, with more than 24 million eCommerce retailers spread all over the world. Most of these online merchants have chosen to dropship as their field.
- Most of the sales profit of dropshipping stores comes from selling clothing. In 2021 some studies reported that more than 20.8% of the global dropshipping market size profit comes from clothing sales.
1. Dropshipping Industry is Expected To Grow By 28.8% Between 2020 to 2025
Several reports have been made on this hypothesis. It is acknowledged that dropshipping industry was valued at $102.2 billion in 2018 and is expected to register a CAGR of a massive 28.8% between 2020-2023.
Due to this, the overall market size of dropshipping might rise from $102.2 billion to $557.9 billion by 2025. In addition, a few more statistics were also found by Grand View Research, which reported that the Business to Customer market might rise to $7.65 trillion by 2028, which is a massive number for any industry.
2. Dropshipping is used by more than 33% of Online retailers to Fulfill Online Order
Most online merchants use the dropshipping model to fulfill customer orders. Major eCommerce platforms like Amazon, and Wayfair, which have their fulfillment methods, also use the dropshipping model to meet customer demands. In 2011, more than 24% of Amazon sales were fulfilled by drop shipping. The number has grown by a huge margin since then.
Because drop shipping is the most lucrative and effective method to start an online business, most young entrepreneurs or new merchants in online platforms jump into dropshipping to be part of the huge market profit.
Due to these facts, the dropshipping industries are bound to improve eCommerce sales, and thus it made a win-win situation for both manufacturers and suppliers. The fact that more than 33% of online merchants use dropshipping to fulfill customer demands is possible only because it releases the merchants from worrying about holding inventory or warehouses and delivering the orders.
3. Dropshipping fulfilled more than 23% of online sales
In 2017, a report said that the dropshipping model fulfilled more than 23% of online sales. Even today, more than a quarter of online sales are processed and fulfilled by drop shipping.
The remaining 77% of online sales do not take the help of dropshipping to fulfill the orders, and large industry giants mostly complete them. They have an efficient method of fulfilling the demand of online sales.
Besides this, dropshipping is growing by each year which is about 17%, and dropshipping popularity is going to increase by a huge margin. As a result, more than half of online sales are going to be fulfilled by dropshipping model, increasing the market value of drop shipping.
4. Dropshipping Business Average Sucess rate is about 10%
The reports of top dropshippers worldwide show that only a handful of a dropshipping business succeeds each year. Moreover, on average, a dropshipping business needs at least a year in operation to meet expected profit margins.
Only 10% to 20% of dropshipping businesses have succeeded in using this model. However, it will still succeed you. With proper measures and approach, even you can get under that 10-20% mark and gradually increase the margin.
Considering finding the best supplier as the biggest hurdle in dropshipping business, only 10% of dropshippers can find profits in their first year of operation. So, if you are considering starting a dropshipping business, you must be aware of the losses you may/may not have to deal with in the first few years of operation.
5. More than 84% of eCommerce retailers have Faced Problems in Finding Good Suppliers
Building an online business and using the dropshipping model to fulfill customer demands can take time and effort. The biggest hurdle to success in dropshipping business is finding reputed and reliable suppliers.
Any fault in the product will lead to customer dissatisfaction, ultimately affecting your online store’s reputation. With this in mind, more than 84% e-commerce retailers are constantly searching for reliable suppliers.
However, this is a challenging task. Most suppliers are inclined to process orders in their methods. Thus, this is the biggest drawback of dropshipping business. Nevertheless, with the increasing popularity of the dropshipping business, more and more reliable and flexible suppliers are coming forward in the hope of increasing their sales funnel.
In the upcoming years of dropshipping in commission, it wills, and customers will be satisfied with their products.
6. More than 66% of Online Shoppers Purchase Items From Stores with Multiple Shipping Options
From the very beginning, consumers have been fond of options. Hence, most online stores or companies try to bind multiple options in their stores. As a result, more than 66% of regular online shoppers are inclined to those stores only, which offer them a wide range of shipping options.
Not to mention that most online shoppers prefer shopping from those stores which offer them great deals in terms of delivery rates and free deliveries. People also find faster deliveries.
As a result, most online stores are now trying to merge multiple shipping options into their online store. For instance, special drops in shipments and quick or free deliveries. In addition, according to some reports in 2021, more than 51% of sales were made due to free deliveries. 33% of consumers have ordered due to fast shipping.
Similarly, 39.6% of sales were made possible due to discounts and coupons, and 28.0% delivery due to one-day delivery. Considering the growing rate of online shoppers and demand for shipping companies, adding multiple shipping options for your dropshipping store can be beneficial.
7. Customer Judge Your Dropshipping Site within the First 15 Seconds of their visit
One of the most crucial facts is that dropshipping-based online stores are judged within 15 seconds of the customer’s visit. As a drop shipper, you have only 15 seconds on average to pique your customer interest.
From various reports and data, it has been acknowledged that customers never returned to dropshipping sites, in which the consumers exited the site within the first 15 seconds of their visit. Hence, dropshippers and other merchants should consider the first 15 seconds as the most crucial time to interact with the customer and hold their interest.
Therefore, dropshippers must have a simple and interactive design. Most importantly, dropshipping websites work hard to load their sites in less than 3 seconds. Yet another statistic states that sites that fail to load within 3 seconds were abandoned immediately.
All these facts make up that dropshippers should work on their sites more efficiently to catch the interest of their customers and provide users with various offers which will hold their interest in your online store.
8. Dropshipping Increases 50% Profitability of Any Online Stores
There are many reasons why the dropshipping model can raise a store’s profitability by a 50% margin more than any other model in use. With drop shipping, merchants can handle stocking or delivering the products to the receiver’s address.
Dropshipping reduces the overhead maintenance cost, and inventory or warehouse cost, thus raising the profit margin of any store. In addition to this, traditional retail stores cannot make bulk sales as online stores do.
With the growing success of drop shipping, if you migrate your traditional retail store to a dropshipping-based online store, you might even get a huge boost in your profit margins.
9. Suppliers, On Average, Earn 18.33% Profit When They Sell Items To Dropshippers
Selling items directly to customers has always been a problem for manufacturers. It includes not the problem of processing the order but also delivering it within the given time. Coincidentally, most e-commerce stores and retailers consider this their major problem.
Starting from processing the order to packaging and delivering it to the customer involves a lot of expenditure. This is why most suppliers have opted for dropshippers to sell their products.
The dropshippers generate customers for the suppliers and direct the orders to the manufacturer. Due to this, the cut between delivering the product from the manufacturer to the customer is also eliminated.
Directly selling products to customers through dropshippers increases the profit margin for both dropshippers and suppliers. On average, suppliers make 18.33% of their profit when they sell their products to dropshippers.
Most dropshipping stores make a profit of 10% on average. However, some dropshippers make huge profit margins by providing suppliers with bulk orders. In contrast, dropshippers also get a cut from generating customers for the suppliers.
10. More than 2.14 Billion Global Digital Buyers Were Projected in 2021
According to some reports made by Statista, it is acknowledged that there were more than 2.14 billion people all over the world who dealt with products and services online. Since 2014, the number of digital buyers has drastically improved from 1.32 billion to 2.14 billion in 2021.
Concerning the growing number of online goods consumers, there could not be a better time to start an online business with the dropshipping model. Such increasing online customers can greatly affect the overall sales through online stores and cross the estimations. Moreover, the dropshipping model provides users with multiple options to fulfill customer demands.
11. Only 19% of retail sales were registered in 2021
By the end of 2021, only 19% of sales were made through retail sales. It depicts by what margin consumers are switching over to online stores. Entrepreneurs must recognize e-commerce as an important platform to earn passive money or use it as a side business.
With the growing number of digital customers and dropshipping as a featured model for online stores, the numbers will get even higher, taking over the world completely.
As a result, traditional retail sales have also dropped to 19.6%, which is expected to fall more in the upcoming years of the dominant e-commerce market.
12. 2022 has registered more than 24 million eCommerce stores
Currently, people have multiple options to shop from. If they dislike products from one online store, they always have options to search for other sites that offer them crazy offers.
With the growing number of digital customers and demand for online orders, online merchants have also increased their number. More than 24 million eCommerce stores are available online to fulfill customers’ demands.
However, out of all the eCommerce stores available online, half of them are third-party sellers. And to be more specific, more than 16% of 50% of third-party sellers are not dropshippers. This means that the remaining 34% of the 50% of third-party sellers are dropshippers.
It indicates the growing number of merchants who have chosen dropshipping as their business model.
13. Customers abandon more than 69.75% of Shopping Carts
Since the conversion rate drops by 50% for each step of placing an order on an e-commerce website, more than half of the shopping carts are abandoned by users and are never visited again.
However, the major reason behind abandoning shopping carts is the delivery charges. The high shipping charges are the main reason customers mostly stop placing orders. Dropshippers and direct sellers should consider charging decent shipment charges.
Aside from Oberlo, statistics have suggested dropshippers and retailers send e-mail notifications to customers who have abandoned their shopping carts. According to their statistics, the success of their e-mail is more than 40%.
Such measures can help business improve their conversion rates.
14. About 58% Of Customers Abandon Shopping Carts Due to Bad Reviews
Most people trust reviews more than product descriptions. This is crucial for beginner dropshippers to value customer experience. Often the dropshippers need to have control over the products their sellers deliver. And if the products are good, they will deliver a good impression on your online store, and customers will give a bad rating.
More than 81% of customers search for product reviews than product descriptions and features. And more than 58% of people abandon their shopping carts due to bad customer experience after purchasing that particular product.
Due to this, beginner dropshippers should consider these statistics and improve the product quality delivered to their customers. They should consider finding trusted sellers with top-notch products and not compromise product quality.
15. The Average Conversion Rate Drops By 50%
Most successful e-commerce stores have a conversion rate of over 2%. Higher conversion rates mean a higher number of orders. Currently, the average conversion rates for e-commerce stores are only 1 – 2%.
In addition, even with the increased number of global digital consumers, the conversion rates drop by 50% at each step of completing the order via an online store. The dropshippers should look forward to dropping the conversion drops, which will ultimately increase the conversion rates.
This is calculated from the number of customers viewing the products from a store to placing the order. For instance, if 100 customers visit your website, 50% of customers place a product in the cart.
And out of 50 customers, 25 will abandon the shopping cart, and the remaining will move on to the checkout page. Again, only half of 25 or 24 people will complete the orders. So as a drop shipper, if your conversion rate is dropping by a huge margin at each step, you must look for the problem in your offerings and fix it soon.
16. Offers Often Doubles The Conversions In Dropshipping
Top-performing dropshippers have found that their business models profit when they use urgent coupon codes, like limited-time coupon codes and limited-time free shipping delivery offers. For example, you may have crossed paths with offers like “Click Now to get 24% discount on all orders – expring in 24 hours” or “Shop for free delivery – expires in 2 hours.”
Such type of urgency coupon codes greatly helps online businesses boost their sales. Besides this, some reports also say that the stock counter has boosted their sales.
Moreover, special offers like a combo, buy one get three, or something similar have also boosted the sales of a dropshipping company.
These coupon codes offer, and discounts have proved to be a great method to lure more customers to dropshipping stores and encourage consumers to complete the order.
AliExpress Dropshipping Statistics, Facts & Reports
Here are some dropshipping statistics and facts that can be a great addition to this report. Let us dive right into it.
1. More than 86% of Dropshippers Mostly Prefer Niche Stores
Wanting to sell everything and anything from a single online store has never been successful. It is not just the case with online stores, but no business with various items for selling has yet to succeed.
So, most online merchants still try to follow a specific niche for products they sell from their online store. Dropshippers have also followed up this traditional trend. The dropshippers try to abide by the niche no matter what.
Due to this, more than 86% of reported dropshippers who have registered on AliDropship, always prefer a niche store to a general store.
From this report, you can understand that only 14% of dropshippers do not follow a specific niche for their online store. However, it is not like you will not succeed if you do not follow a specific niche. But, if you maintain a category, then you might have chances of getting early success.
2. About 18.5% of Dropshippers Sell Electronic Items from AliDropship
As mentioned earlier, most AliDropship dropshippers prefer selling items from a particular category. Based on the niche chosen by dropshippers, the majority of the products sold by drop shippers on AliDropship are electronic items.
This includes electronic gadgets, devices, and accessories. These are the most sold items on AliDropship by dropshippers in the past few years. The second most sold niche is from baby and children products. More than 13.1% of baby products were sold from AliDropship.
After the gadget and baby product niche, the most sold items are from women’s clothing and sports gear which touch the 12.1% and 10.6% marks.
Besides these products, several categories, like men’s clothing (a major selling niche for dropshippers and online merchants holding inventories), cooking supplies, pet supplies, home and garden tools, and fashion accessories, are also sold by AliDropship.
3. The United Kingdom and the United States are the top most countries to buy AliDropship Custom Store
From the title, you can well-understand that the United States and the United Kingdom are the top two countries to purchase AliDropship’s customs stores. However, the other countries mostly using AliDropship are Canada, Malaysia, and Germany.
Now that you have learned about their source markets, you can devise a strategy to optimize the market and consider your delivery charges and taxes accordingly.
4. Saturday Witnesses AliDropship’s Biggest Sales, whereas Wednesday Witnesses AliDropship’s Lowest Sales
The dropshippers of AliDropship have noticed that their sites find the maximum sales activity on Saturday of each week. Dropshippers have also witnessed that the majority of their orders are confirmed on Saturday of each week.
However, on Wednesday, the sites witness the lowest sales activity of the week. Such information helps dropshippers to plan their advertisements or target their audiences. Moreover, the dropshippers can devise a strategy to get maximum work from their staff members by adjusting their working schedule on the busiest days of the week.
This also helps dropshippers to avoid crowds and work efficiently.
5. More than 60% of Payments are made from Credit Cards
Currently, the two most used payment methods are credit cards and PayPal. In AliDropship, most customers use credit cards to place their orders. Around 40% of transactions in AliDropship are made from PayPal, while the remaining 60% are completed from Credit Cards.
Considering the areas in which AliDropship is mostly used, these are the two most obvious methods of payment that the customers use.
Besides this, most of the AliDropship buyers are female consumers. About 58% of AliDropship consumers are female, while the remaining 42% are male.
6. 2.43% is the conversion rate of paid search in AliDropship
There are three major traffic sources through which dropshippers can get traffic. They can be organic searches, direct searches, or paid searches. From these three major traffic sources, paid search is the most efficient and provides major traffic to AliDropship users.
The paid search conversion rate is around 2.43%, whereas the organic search conversion rate is about 2.20% and 1.40% for direct search.
eBay Dropshipping Statistics, Facts & Reports
eBay was once thought to be dead. But later, it came back, and the statistics of eBay are more overwhelming than any other dropshippers. Below are some major statistics of eBay, which have been compiled over the years.
1. eBay has total transactions of 146% in Dropshipping
Soon after eBay announced its dropshipping facilities were not over, it made an exceptional comeback. In 2010, eBay advertised products on their eBay store at a higher price, which demoted customers from purchasing them.
This led to the downfall of eBay dropshipping. But later, when eBay announced that its dropshipping was still active, it did a huge business. Their transactions over the years have grown by 146%.
Moreover, more than $22 billion were sold from eBay dropshipping model in 2019. Besides this, the average dropshippers of EBay often generate more than 900+ orders each month. On the other hand, the top-performing eBay dropshippers handle more than 5000 orders. Each month.
2. The Average Profit of eBay is $7000/month +
It is acknowledged that the top dropshippers of eBay, on average, are successful in maintaining a profit margin of $7731/month. This can be concluded as a huge success for any beginner drop shipper.
Besides this, the average dropshippers makes a profit of $807 each month. However, more than a quarter of eBay dropshippers makes a profit of $1000 each month. Suppose you follow the basic features and guidelines that maintaining this profit margin through eBay is relatively easy.
In some of the reports, it is also acknowledged that eBay dropshippers get at least $2.67 profit on each sale. Moreover, the top dropshippers of eBay make a profit of $3.64 on each sale and falls under the top 10% of eBay dropshippers.
In contrast, the bottom 10% suffer a huge loss. They incur a loss of $2.53 on each sale to compete in the market of top dropshippers.
3. eBay has the lowest Profit Margins
Most e-commerce dropshippers make a profit of around 30-40%. However, it is different with eBay dropshippers. The profit margins in dropshipping from eBay are quite less when compared with other dropshippers.
In today’s world, where dropshippers average turnover is around 40%, eBay dropshippers find it tough to make a profit of 6%. Moreover, the average cashback profit earned by dropshippers ranges from $600 to $700.
Besides everything, eBay dropshippers have to spend more money on their store due to additional fees like eBay and PayPal fees. From statistics, you can acknowledge that eBay dropshippers have to spend around $1078 for their eBay fees and around $479 on their PayPal fees.
4. eBay Dropshippers have Handled More Transactions in the Current Year In 2018
You should know that the above statistics have nothing to do with the global state of dropshipping. The average sales of eBay have gradually increased since 2018. Some may think that eBay is not the best platform for drop shipping.
eBay dropshippers have reported that they handled more than 7% of sales than what they handled back in December 2018. Since the festive periods provide exciting offers to consumers, many people visit the site to look for cheaper products.
This is one of many reasons why the sales of eBay have increased since 2018.
5. eBay Holds More Than 135 Million Users
Some recent studies reported that eBay holds more than 135 million eBay users throughout the world. These records even hold those users who have brought something on eBay in the past 12 months.
However, the total number of users has decreased from the third quarter of this year. eBay has lost 2.2% of users since its last quarter and about 11.2% of users from the previous year. Even though eBay’s users are spread across 190 different markets, the company is losing users.
To compromise with this huge loss, eBay provides different facilities to sellers and dropshippers to encourage consumers to purchase a product from their platform.
Etsy Dropshipping Statistics, Facts & Reports
Etsy is one of the largest platforms to sell products online and is one of the many platforms to provide dropshipping facilities. Mentioned below are some of the statistics and reports of Etsy drop shipping.
Let us check them.
1. Etsy Has More Than $17 billion in Market Capital
Etsy being popular as the 12th largest marketplace to sell goods worldwide, is supported by its total market capitalization. The market capital of Etsy significantly increased in 2020. Besides boosting its market capital, Etsy also has impressive profit margins.
Even though the online marketplace is still dominated by major e-commerce platforms like Amazon, Jingdong, and Shopify, Etsy has also made its way among those top-performing platforms.
2. Etsy has witnessed a 75% increase in its Active Sellers
Etsy has more than 96.3 million users who actively purchase products from their online store. As of 2019, the total number of active users was only 46.3 million. However, in 2020, the total number of active users has significantly grown by 75%, raising the total number of active users to 81.8 million worldwide.
Etsy didn’t stop here. By 2021, Etsy raised its total number of users to 96.3 million.
3. More than 81% Of Etsy Dropshippers And Online Merchants Are Women
From the beginning, Etsy has been more beneficial to women than men. Even in some reports from 2015, more than 86% of sellers on this platform were female. Most Etsy sellers come from the United States.
As of 2020, about 62% of Etsy sellers, including dropshippers, were reported from the United States. The rest 38% of dropshippers and sellers come from other countries, like California, the United Kingdom, and Australia.
The dropshippers and merchants originating from the United States are mostly from California. About 14% of dropshippers and merchants are from California. In addition to this, Florida and Texas provide 7% of sellers.
On the other hand, North Carolina, Washington, and Pennsylvania all provide a 4% share of the total United States e-commerce market.
4. Top Merchants on Etsy Earn More Than $10,000
When you compare with other dropshippers and sellers, you will find that Etsy sellers make a huge monthly profit. The top merchants, including the dropshippers and other third-party sellers of Etsy, generate more than $10,000 from their sales.
However, Etsy sellers have also reported that they have to pay a huge charge which they cannot opt out of. For example, Etsy dropshippers have to pay a 12% fee for advertising their products over different platforms from where they can generate traffic and customers for their products.
5. Etsy has generated More than $1.7 Billion in Revenue
Some studies registered that Etsy’s total marketplace revenue was $1.7 billion in 2020. This mark was huge when compared to their previous year’s revenue. Soon after the company’s official launch, Etsy’s total market capitalization was $7.46 billion in 2019.
They acknowledged that their main revenue stream was third-party payment processing fees, sales listing, and seller service profits. Moreover, by 2021 Etsy crossed the mark of $350 million net income.
Other Interesting Dropshipping Statistics
There are many interesting dropshipping statistics which is proving why dropshipping is taking over the market of e-commerce. Here are some statistics that you will find interesting about dropshipping.
- The Indian e-commerce market was recorded at $38.5 billion back in 2017, and it is highly anticipated that the Indian e-commerce market valuation will be increased to $200.0 in the next five years.
- The Asia Pacific market registered more than 25.0% profit in 2018 from a free sample copy click on the image.
- The dropshipping market is expected to grow by 28.8% annually from 2020 to 2025. Experts highly anticipate that the global dropshipping market will reach 149.4 billion by 2020.
- As of 2019, the global dropshipping market was dominated by dropshippers from North America. Their net share was around 35.6%.
- Shopify dropshipping dominates the e-commerce market in the USA, with more than 62.8% of stores originating from the USA. The other popular dropshipping locations are Canada, with 8% of the market share, the second most popular Shopify dropshipping location, and Australia, with 7.4% of the total market share, the third most popular location.
- According to the United Nations Conference on Trade and Development, the total number of global online shoppers has increased by a huge margin. In 2015 there were only 1078 million online shoppers, which has risen to 1500+ million online shoppers.
- It is estimated that by 2025, the food and personal care product segment will grow by 30%.
- Based on some reports of UNCTAD, it is registered that the total sales from the e-commerce platform exceeded more than $753.0 billion in 2017.
- More than 16.1% of total global retail sales are owned by e-commerce.
- Out of 26.074 trillion dollars earned from retail sales, 4,206 trillion dollars is provided by 16.1% of total retail sales from e-commerce.
- Around 25% of dropshippers from eBay earn around $1000 each month, which is okay. Since dropshipping is mostly done as a side business, most dropshippers consider it a good revenue.
- More than 27% of online retailers all around the globe have either switched or started selling items using the dropshipping model.
- For a decade, dropshipping profits have grown by 7% annually. Currently, revenue earned from dropshipping has reached over $4 billion.
- Even the small retailers selling smartphones have registered around a 30% increase in their conversion rates.
- Since April 2021, around 13% of Shopify online stores have used the dropshipping model to complete orders. These statistics even add stores that use dropshipping models to deliver at least one product from their entire catalog.
- Around 7.10% of products in every Shopify store are completely delivered to the customer using the dropshipping model.
- More than 90% of dropshipping business fails, and they quit in the first month of their operation. Dropshipping, on average, takes at least a year to earn profits. Due to the frustration of dropshippers not earning enough profits in their early stages quits the platform.
- Even though, the success rate in the first year of operation of dropshipping is around 10%.
- Around 90% of dropshippers abandon the e-commerce store for not receiving deliveries of their product on time.
- The conversion rate on a dropshipping website drops by 50% at each step. These steps include viewing the website, adding the items to the cart, and placing the orders.
- Half of Amazon’s orders are completed by third-party sellers. Of these, 34% are drop shipped, and they handle more than 4000 orders per minute.
Take Away
Dropshipping is a top-notch business for both side businesses and mainstream businesses. However, if anyone wishes to start dropshipping and make profits from their sales, they should consider looking into the facts and statistics of dropshipping over all platforms of e-commerce.
This will greatly help them optimize their dropshipping store accordingly and profit from their sales. Entrepreneurs can work with these statistics and find out when and how they will find success by using drop shipping.
