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Dropshipping Success Rates: Understanding the Odds and Strategies to Win

The dropshipping success rate is estimated to be around 10-20%. 

24
 min read
January 2, 2024
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We’ve created several dropshipping stores, and while doing so, we’ve learned exactly what we need to do to make our stores successful.

In this article, we’ll look at:

  • The dropshipping success rate
  • Why dropshipping stores fail
  • Dropshipping success stories
  • Top tips to increase your chances of success

We’ll share everything we’ve learned so you can decide if dropshipping is right for you and how to build the most successful store.

Key Takeaways

  • There are no official figures for the dropshipping success rate.
  • Poor online marketing and lack of online search visibility are the top two reasons e-commerce stores fail.
  • There are tons of successful dropshippers, but often they will have failed many times before becoming successful.
  • Don’t be afraid to fail, as you’ll likely learn a lot, and studies show it increases your chance of success when you try again.
  • Finding the right product, choosing the right supplier, and learning how to market your products will increase your chances of success.

What is the Dropshipping Success Rate? 

Experts estimate the dropshipping success rate is between 10% and 20%. However, there is no actual data about dropshipping success.

We expect that the rate is probably more like 10%, as dropshipping is often presented as a low-risk, quick-return money-making model. 

There is also a low barrier to entry, as you can start with little to no money. Many people jump in expecting results without putting in the time, money, or hard work. We’re not saying that dropshipping is impossible. But it's not always as easy as it’s made out to be online. 

From my experience, if you are someone who tries more than one product. You are already in the top 25% of dropshippers. 

With the right information, mindset, knowledge, and guidance, it’s absolutely possible to build a successful dropshipping business. 

And don’t be disheartened if you’ve tried and failed at dropshipping. Studies show that if you’ve attempted and failed to start a small business, there is a higher chance of success the second time around. 

First-time small business owners have a success rate of 18%, and this increases to 20% when small business owners have had a failed startup.

Why Do Dropshippers Fail? 

We don’t have exact data for why dropshippers fail. However, we can look at a study of why 1253 e-commerce store owners failed and how to avoid making the same mistakes [1]. 

These are the top five reasons:

  1. Poor online marketing 
  2. Lack of online search visibility
  3. Little to no market for the products or services
  4. Running out of cash
  5. Price and costing issues

Poor Online Marketing and Lack of Online Search Visibility

The first two reasons are pretty similar. The business owners couldn’t market their brands or products and, therefore, didn’t make enough sales.

To avoid this, you need to increase your brand's visibility and get your brand in front of the right customers.

How to Overcome Poor Online Marketing and Lack of Online Search Visibility

There are tons of ways to promote your products online, including the following:

  • Build a brand with a strong social media presence and an SEO website. 
  • Produce content to attract your dream customers
  • Create funnels and email marketing campaigns 
  • Pay-per-click (PPC) advertising

Paid ads are the most common way to promote your dropshipping products and generate sales.

We recommend learning how to create and run converting Facebook and Instagram ads. 

Dropship has an Ad Spy tool that allows you to search and filter through ads. You can see the engagement, copy, and ad content. Looking at competitor’s ads can help you create winning ads for your own dropshipping store.

Little To No Market for the Products or Services

Launching a product with no market means no one is interested in your product or service. And therefore, you make no sales.

An alarming number of businesses use this as an excuse for their online businesses failing.

In our opinion, this shouldn’t ever be a reason for your business to fail. 

How to Overcome Little To No Market for the Products or Services

Product research is the main way to ensure your product has a market. You can do product research on social media, on marketplaces, using your own experiences, or using a product research tool. 

A product research tool is the most accurate way to do product research, as it allows you to spy on other sellers to see the exact sales they’re making. This will tell you the market the product has. 

Dropship is the best product research tool (although we are biased) as it reveals Shopify sellers’ sales, product listings, revenue, and more. 

We’ll look at how to find the right product in more depth in the section below.

We also have a complete article on How to Do Product Research for Dropshipping if you're looking for more information.

Running Out of Cash

Dropshipping only requires you to pay for stock once you make a sale. Traditional e-commerce, however, requires you to prepay for stock. 

This means that running out of cash isn’t as much of an issue with dropshipping as it is with other e-commerce businesses. 

However, it is still something to consider. 

How to Overcome Running Out of Cash

Make sure you have enough money to start dropshipping and some knowledge of cash flow to keep your business growing.

To start dropshipping, you’ll need to pay for software, samples, and ads. 

You’ll also need to know your product prices and costs and your revenue and profit.

Dropshipping also has a high return rate, so you’ll also need to ensure you have a clear refund and return policy that you can afford to stick with. In our experience, refunds are one of the main reasons dropshipping businesses fail, as owners cannot afford to refund customers and grow their business. 

Reducing your return rate with high-quality products, good customer service, and offering exchanges and credit rather than refunds can increase your chances of success.

Price and Costing Issues

Your product cost, shipping cost, running costs, and cost per acquisition will all need to be factored into your product price to ensure your business remains profitable. 

If you don’t consider everything it takes to run your business, then you could end up running at a loss.

How to Overcome Price and Costing Issues

Before you commit to selling products, factor in all of your costs and the amount of profit you want to make per piece.

You can then look at your competitor's prices and see if you are able to match the price while still achieving your ideal profit margin.

Some products might seem like winners, but the profit margin is too low to sustain your business.

Dropship has several free calculators. These include a profit margin calculator, as well as cost per acquisition, return on ad spend, and break-even return on ad spend calculators.

We also have an article on How to Price Your Products. It includes calculating your price, analyzing your price, pricing strategies, and much more.

Dropshipping Success Stories 

We know it's possible to have successful dropshipping, as we’ve done it ourselves. 

But looking at other’s dropshipping journeys and successes can inspire us to believe in ourselves. 

Here are five dropshipping success stories that have motivated us.

1. Nawras Ganim

Nawras Ganim is a successful 8-figure dropshipper with years of experience. He is also one of the Dropship founders.

Nawras creates YouTube videos with actionable steps to help you build a successful dropshipping store.

In one of his recent YouTube videos, he did a 7-day dropshipping challenge. The challenge showed how you can generate profit dropshipping for under $25. The video included product research, building a store, promoting the product, and making sales. 

2. Andy Stauring

Andy Stauring has scaled several businesses to over 7-figures. 

He shares his dropshipping journey on TikTok and YouTube, along with tips and coaching sessions.

Andy talks about the failures and mistakes he’s made while dropshipping, as well as how to overcome them and the steps he’s taken to become successful. 

3. The Ecom King

The Ecom King is a successful dropshipper and e-commerce entrepreneur. His e-commerce businesses generate more than $5,000,000 in sales per year. 

He has a YouTube channel with over 500,000 subscribers. On his channel, he shares dropshipping tips, along with dropshipping experiments and challenges. 

He recently made a video that explored a dropshipping store he created that generated $400,000 in sales in 30 days. He went through the ad campaigns, email marketing campaigns, product page and website design, and more. 

4. Jordan Welch

Jordan is a successful dropshipper who has made over $6,000,000 in five years and owns two seven-figure businesses.

He has been documenting his dropshipping journey since he started on YouTube. His YouTube channel has tons of tips to help people get started and scale their dropshipping business.

In the last year, his channel has transitioned from e-commerce and dropshipping to sharing success stories and challenges. 

5. Brian Jung

Brian Jung started dropshipping in 2017 when he built his first six-figure business within a few months. He now has multiple seven-figure businesses.

He has a YouTube channel with almost 1.5 million subscribers, where he shares his journey.

As well as dropshipping, he also invests in other businesses and shares tips on crypto, credit cards, investing, and entrepreneurship to help people make informed financial decisions.

How to Increase Your Chances of Success with Dropshipping 

After looking at success stories and building stores ourselves, we’ve learned a lot about how to succeed dropshipping.

Success also means something different to everyone. Success for you might be creating a multi-million dollar business, but for someone else, it might be making an extra $200 a month. 

No matter what your definition of success is or what you’re looking to achieve, here are ten tips to help you increase your chances of success.

1. Find the Right Product

The first step is finding the right product to sell. 

Before we start searching for products, we need to know what we’re looking for. These are our requirements for selecting a winning product:

  • High Demand - The demand is how many people will buy your product. You need to find a product that people want to buy. If your product doesn’t have any demand, then you won’t make any sales.
  • Profit - You need to ensure every product you launch is profitable. Otherwise, your business will be running at a loss. To quickly check your profit, you can deduct the costs to sell your product (product price, shipping, ads, etc) from the selling price. We recommend that you look for products with 20-25% profit. Ideally, the more profit, the better, as it gives you space for any issues.
  • Competition - Your competition is anyone else selling the same product as you. Ideally, you want low competition, and any competition you do have, you need to be able to beat.
  • Restrictions or Laws - Make sure to check whether your product is subject to any specific laws or restrictions. This could include products with a trademark or products that are illegal to sell, import, or export in certain countries. 

There are also a few other things to consider, like product availability, product outlook, and your customer base. For more details on winning product requirements, check out this article.

You can find products in tons of different ways, and everyone has their own methods. But these are the ways we’ve found the most successful products:

Product Research Tools

A product research tool reveals product, store, or ad information so you can make data-driven decisions when you choose your dropshipping product.

It provides more accurate results than the other methods we’ll discuss. And you don’t need to manually search for products.

We’ll look at two product research tools, but if you want more options and help choose the right tool, check out our article, 20 Best Dropshipping Research Tools.

1. Dropship

Although we’re a bit biased, Dropship is the best dropshipping product research tool.

And you can check it out for free with the 7-day free trial. 

It allows you to spy on other Shopify sellers’ stores so you can see the real numbers other dropshippers and e-commerce stores are making. 

Dropship has several tools so you can find, track, and take action on winning products.

The Product Database lets you search and filter through products to find ones that meet your criteria.

You can then save products and stores to your own Sales Tracker. This allows you to monitor their performance over time.

Once you’ve found products you think are winners, you can search for your competition using the Competitor Research tool. You can analyze the competition and work out how to beat them.

Once you’re ready to launch your product, you can use the quick action buttons to search for the product on AliExpress to find a supplier and import the product to your Shopify store using AutoDS.

Dropship also has several other product research tools. These include the following:

  • Portfolio - Let Dropship do the research for you. Every week, they send a list of winning products with a complete overview, a list of pros and cons, potential competition, a list of suppliers, and much more.
  • Top Stores and Products - Dropship has lists of the top-performing stores and products, which are updated every 24 hours. These are proven winners and can give you inspiration for your own store.
  • Ad Spot - One of the latest tools dropship has launched is the Ad Spot. Search for ads by their copy, type, engagement, domain, CTA, and more. You can also do a quick search for top performers and weekly winners. Looking at other seller’s ads can help you identify products that advertise and convert well.
  • Chrome Extension - Find winning products while you browse. The Chrome extension works on all Shopify stores, so you can see the sales, revenue, ads, themes, best-sellers, and more. The extension links with the web app, so you can also save as you search.
2. AliExpress Dropshipping Center (DS Center)

Another tool we’ve used to find winning products is the AliExpress DS Center. 

You can sign up for the DS Center for free through your AliExpress account. 

The DS Center allows you to search for winning products and see the number of orders and performance of AliExpress sellers. 

As the DS Center analyzes AliExpress sellers, it makes it easy to find the right supplier and source your products.

Social Media

We use social media to market our products as it’s where our customers are.

But we can also use it to find what they’re interested in to give us product ideas. 

Some of our favorite ways to use social media for product ideas are the following: 

  • Facebook Groups - Join Facebook Groups in the niches you want to sell in. You can look at the products they’re recommending and the equipment they use for product inspiration. These groups are often full of experts in the niche who can provide ideas and feedback on your products.
  • Instagram and TikTok Hashtags - Search for terms like AmazonFinds on TikTok and Instagram. Influencers create videos with 5-10 products from Amazon and show them off in the video. The products are often trendy, or ones that can easily be showcased in the video, which are perfect to dropship. 

Checking out the comments to see the reactions to the products can help you identify winners.

  • Product Reviews - If you have a few products that you’re thinking about dropshipping, check out review videos. The reviews will often include the pros and cons of the product, which can help you decide if it’s right for your store. If you do decide to go ahead, the real feedback can help you create compelling copy for your listings and ads.

Amazon

Amazon and other marketplaces, like Etsy, Walmart, and eBay, are where our potential customers are shopping. Looking at which products are popular, most frequently purchased, or searched for can help us find winning ideas.

Here are a few ways you can use Amazon to find winning products:

  • Best Sellers - Amazon lists all its best-selling products in each category. These products are all guaranteed to have high demand. You can search through each category to find products that meet your winning criteria.
  • Auto Complete Search Bar - Amazon completes the search bar when you start typing in the name of a product. It does this to help potential customers find the products they’re looking for. Although we don’t know the exact formula for the products Amazon recommends, we can assume that they are based on popularity and purchase rate. This means that all of the products suggested are ones with high demand and high sales.

Your Own Knowledge, Experience, and Ideas

We all have different interests, knowledge, and experiences. 

For example, you might be really into running. And one day, you think, I wish I could find a running belt that doesn’t move while I run. Instantly a product idea.

Think about gaps in the market, products that don’t quite meet your expectations, or products that aren’t easy to find.

Products we’ve found like this have been some of our best sellers. This is because we know the market. We are the target audience. So, we know what to look for when sourcing the products, how to write copy that converts, and who the target market is. All of this gives us an edge over the competition.

2. Choose a Reliable Supplier 

You will rely on your supplier to prepare, package, and ship your orders. So you need to make sure you find a reliable one with high-quality products.

For dropshipping, we usually find our suppliers on AliExpress.

AliExpress is a huge marketplace of suppliers and small businesses, mostly located in China. AliExpress is our go-to as they offer business-to-consumer purchases. 

This is perfect for dropshipping, as you can order one piece at a time rather than in bulk, but still for an affordable price.

As AliExpress is such a huge site, with many suppliers offering the same product, it can be difficult to decide which supplier to choose.

These are some tips for finding the right supplier:

Contact Several Suppliers 

We recommend reaching out to at least five suppliers and asking them the same questions and comparing their answers. 

If you need help with questions to ask, we usually ask the following:

  • What is the price per piece?
  • How much is shipping?
  • Which packaging do you offer, and is it included in the price?
  • Which locations do you ship to?
  • Where are you shipping from?
  • How long does shipping take, and which courier do you use?
  • How long does it take to ship an order after you receive it?
  • What is your refund, return, and warranty policy?
  • Do you provide images and videos of the product?
  • Are you able to offer dropshipping? (including no invoices in the packaging, no brands on the product or packaging, etc.)
  • Can you send samples?

You can usually narrow your suppliers down based on the answers to the questions. 

We also recommend comparing their response time and overall communication skills. You’ll be working closely with your supplier, so making sure they are quick to reply and easy to communicate with is essential. 

Request Samples 

After you’ve narrowed down your suppliers based on the above, we recommend requesting samples from the remaining contenders. We always ask for samples as it is the easiest way to compare the quality of the product.

Comparing the answers along with the samples will give you the best chance of choosing a reliable supplier. 

If you want more information, we have an article that includes everything you need to consider when choosing a dropshipping supplier.

3. Pick the Right Selling Platform and Automation Tools

You’ll need a platform to sell your dropshipping products on, and we also recommend using automation software. 

Dropshipping Platforms

There are tons of platforms that allow you to dropship. 

Most commonly, you’ll build your own website to sell your products. We always recommend Shopify.

Shopify is an e-commerce platform that allows you to build an e-commerce store, market your products, and accept payments. 

It’s super easy to use, and you can build a professional-looking website in minutes. It also allows you to accept orders from across the world and integrates with tons of powerful apps to help you grow and manage your dropshipping store.

And the best part is we have an exclusive discount. 

You can access Shopify for $1 per month for three months. You can start making money before paying for a full-price subscription. 

If you don’t want to use Shopify, some of the best alternatives are the following: 

  • BigCommerce
  • Squarespace
  • Wix
  • WooCommerce 

If you don’t want to build your own website, you can also dropship on marketplaces like eBay, Etsy, and Amazon. We don’t usually recommend dropshipping on these platforms as there are additional fees and restrictions, but we won’t go into that here. If you think one of these marketplaces might work for you, we’ve written articles with everything you need to know.

You can also sell on social media, including TikTok, Facebook, and Instagram. However, these won’t work for everyone. To create shops on Facebook and Instagram, you’ll need to live in the US or Canada. Otherwise, you’ll still need a website to link with the platforms.

Automation Software

Automation software isn’t a requirement for dropshipping. But we wouldn’t (and couldn’t) run our dropshipping businesses successfully without it. 

Automation tools can import products from AliExpress to your store, process orders automatically, send tracking updates to customers, and manage returns and refunds.

We use AutoDS as it’s reliable, easy to use, works with Shopify and AliExpress, and is affordable. 

We have an article on Best Dropshipping Software, which has more information on AutoDS, as well as other dropshipping automation software. 

4. Learn Everything About Running Ads and Marketing

As we saw at the beginning of the article, the top two reasons e-commerce businesses failed were due to poor online marketing and lack of online search visibility.

Essentially, your dropshipping business will fail if no one knows it exists. To overcome this, you need to learn how to market your products. 

There are several ways to do this, including the following:

Paid Ads

The most common way to advertise dropshipping products is using paid Facebook and Instagram ads. Paid ads allow you to reach your target audience to make them aware of your brand and products.

We find that paid ads generate the most traffic to our stores, which helps to drive sales.

We recommend learning to create, analyze, and optimize Meta ads. 

Organic Social Media

You can create and post content on social media to promote your products and increase your brand’s visibility. 

One of the Dropship founders, Nawras, recently did a YouTube video where he started a dropshipping business and only used TikTok and Instagram Reels to promote his products. He created short-form videos of the products, which went viral and helped generate sales. 

Email Marketing

Sign potential customers up to your email list and create campaigns with offers for your products.

You can build an email list in a variety of ways, such as the following:

  • Host a giveaway, and to enter, they need to sign up for your email list
  • Offer a free product or service in exchange for signing up for your email list
  • Offer a discount in exchange for signing up for your email list
  • When a customer makes a purchase, ask them to join your email list for future offers

Focus on Branding

As well as using the tips to advertise your product, you should also think about your overall brand. Consider your product packaging, website design, product quality, service you provide, and content you post.

Everything you do should have your target customer in mind.

5. Monitor Your Competition and Don't Become Complacent

You’ve started making sales, your ads are optimized, and your store is profitable.

It would be very easy to take your foot off the gas and let your dropshipping store run itself.

However, if you don’t continually monitor and update your dropshipping business, it could fail quickly. 

We recommend keeping an eye on your competition and making sure you’re still one step ahead. Look at what they’re posting, the ads they’re running, their price changes, and any new product launches.

To find your competition, check out Dropship’s Competitor Research tool. You can search your product by name, and it will show you all of the other Shopify stores that sell the same product. You can then add their stores to your Sales Tracker to keep an eye on them.

As well as monitoring your competition, we recommend the following:

  • Check your ads regularly and make any changes to improve your conversion rate
  • Try out different ad copy and media to improve your ads
  • Post content consistently 
  • Check on trends in your niche 
  • Look at any new product releases in your niche
  • Join communities and groups in your niche for product inspiration 
  • Update your product listings based on feedback from customers
  • Test out new software to see if you can make your business more efficient 
  • Consider hiring experts 

6. Focus on Customer Service

Customers will need service throughout their entire journey with your dropshipping store. Including before and after they purchase. 

Before they make a purchase, they might ask you questions about your products, shipping, or anything else. 

Answering the questions and providing good customer service can increase your conversion rate. If your replies and interactions are public, like in the comments of your social media posts, they can also help you attract more customers.

After the customer has purchased your products, it’s even more important to provide good customer service, as it’s likely that the customer is contacting you with an issue.

You will likely face some issues with your dropshipping store; some will be your fault, and others will be completely out of your control. 

We’ve encountered all kinds of issues, including the following:

  • Poor quality products
  • Products not arriving on time
  • Customs issues
  • Products damaged during shipping
  • Incorrect item shipped
  • Item lost during shipping

Customers are usually willing to forgive these errors if you provide good customer service and a solution to the issue. This will increase their experience with your brand and the likelihood they’ll buy from you again.

7. Ensure You Have the Funds

In the earlier section, we saw that running out of cash and price and costing issues were among the top five reasons e-commerce businesses fail. 

Dropshipping is seen as a relatively low-risk business, as you don’t purchase any stock until the customer buys from you.

You can technically start a dropshipping store for under $20, but we don’t recommend it. 

We recommend that you have enough for the following:

  • Ordering samples
  • Signing up for all of the software you need
  • Building a store
  • Market products (paid ads, hiring a professional product photographer, influencer marketing, etc.) 

And this is all before making a single sale. 

Once you start making sales, you’ll need to make sure you manage your money properly and reinvest it into your business. 

The main thing to consider is returns, exchanges, and refunds. As we looked at earlier in the article, a high refund rate has been one of the most common reasons for dropshipping stores to fail.

You’ll also need to consider general business expenses, like the following:

  • Business License
  • Taxes
  • Insurance

All of the dropshipping success stories we looked at earlier encountered failure at some point. This often results in losing some money. So make sure that any money you invest in dropshipping at the beginning, you can afford to lose.

Usually, it’ll take a few attempts to succeed. We’ve launched several products that have flopped, but once we found a winner, we recouped all the money we invested in the failed products and more (plus we learned not what to do!)

Frequently Asked Questions 

How Profitable is Dropshipping? 

It depends on the products you launch, the number of sales you make, and how you run your business. We aim for anywhere between 20-25% profit.

How Long Does it Take to Make Money with Dropshipping? 

You can make money on the day you launch your products. However, the money you make will likely need to be reinvested to create a sustainable business.

What is the Amazon Dropshipping Success Rate?

There are no official numbers for Amazon dropshipping success rates. We’ve sold successfully on Amazon, but we’ve only tried its FBA program. Dropshipping overall is thought to have a 10-20% success rate, but again, there is no exact data.

Final Thoughts

Hopefully, the success stories in this article have inspired you to build a dropshipping store, and you can use the tips to make your store as successful as possible.

If you want help finding the right product to start your dropshipping journey, check out Dropship’s Product Database tool using the 7-day free trial

Try Dropship
Discover winning products to sell today.
Shopify Offer
Start and sell with Shopify $1/month for 3 months.
Try Dropship
Discover winning products to sell today.
Shopify Offer
Start and sell with Shopify $1/month for 3 months.
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