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Is dropshipping worth it in 2024?


is dropshipping worth it in 2024

For many eCommerce business owners, the allure of dropshipping sparkles with promise. Dropshipping is often touted as a means to “get rich quick,” with some top sellers earning well into five figures per month—if not more. But this begs the question: Is dropshipping worth it? Is this eCommerce strategy the golden road to success that some people make it out to be, or is it a misleading detour for small business owners? 


Our opinion? With the right research and preparation, dropshipping is most certainly worth it. While it may not be an automatic road to quick riches, it can be a lucrative and fulfilling way to start an eCommerce business. 


In this article, we look beyond the glossy veneer of convenience and low start-up costs, delving into the real heart of dropshipping. We'll help you discern whether or not this business model is right for you.


Ready to start selling? Take our dropshipping website builder for a spin.



What is dropshipping?


Dropshipping is a retail fulfillment method in which an eCommerce business sells products without stocking them. Instead, when the business receives an order, it purchases the items from a third-party supplier—like Modalyst—who handles delivery.


This approach eliminates the need to store and maintain inventory, reducing overhead costs and simplifying logistics. It allows you to offer a wide range of products without the risk and expense of holding physical stock.



how does dropshipping work and is it still worth it


Is dropshipping still worth it in 2024?


Yes, dropshipping is still worth it in 2024. 


Whether you already own an eCommerce venture or are looking to start a business in the space, dropshipping offers a low barrier to entry and less risk than traditional retail. As long as you work with trustworthy suppliers to guarantee product quality, it remains a legitimate eCommerce business model.


However, it’s not for everyone. If you’re looking for a get-rich-quick scheme, you may be disappointed to learn that dropshipping still requires a lot of hands-on work to build into a million-dollar venture. You’ll need to select the right products, perfect your pricing and nail down an effective marketing strategy to succeed.

But if you’re ready to grab eCommerce by the horns, you can enjoy the rewards of hard, honest work without having to do everything on your own.


Build your eCommerce website today with Wix.



is dropshipping with it? wix dropshipping builder


Advantages of dropshipping


If you’re looking to start an eCommerce business or researching ways to expand your business, dropshipping offers several advantages worth considering. This model is not only accessible for newcomers but also provides established businesses with an efficient way to diversify their product range and reduce operational burdens:


  • Low startup costs: As an entrepreneur, dropshipping allows you to start an online store without the need for upfront investment in inventory. You also don’t need to pay for the items you sell until a customer makes a purchase. This makes it an accessible model for nearly any type of business in the retail space, especially those new to eCommerce.


  • Flexibility and scalability: The dropshipping model offers the flexibility to operate from anywhere with an internet connection. It's scalable, allowing you to easily expand your product range without worrying about storage space or logistics.


  • Wide product selection: Millions of products are available via dropshipping suppliers, and since inventory isn't purchased upfront, you have the freedom to test and offer a wide variety of products to gauge interest and adapt quickly to market trends.


  • Automated business operations: Many aspects of a dropshipping business can be automated using various eCommerce tools and platforms. This automation can include order processing, inventory management and even certain aspects of customer service, reducing the time and effort required for day-to-day operations.


  • No inventory management hassles: Since you don’t physically carry the products that you sell, you don’t have to worry about any issues with warehouse management, stock counting or unsold inventory. You can also save on warehouse and inventory storage costs.


  • Access to a global market: Dropshipping allows you to sell to customers worldwide. You don’t have to worry about learning the ins and outs of international shipping or setting it up on your own.


  • Reduced overhead costs: Without the need for physical storefronts, warehouses or warehouse employees, dropshipping significantly lowers overhead costs. 



is dropshipping still worth it  - clothing


Challenges of dropshipping


While dropshipping offers numerous benefits, you need to consider its challenges as well. Despite its ease of entry and flexibility, dropshipping comes with some drawbacks that can impact the long-term sustainability and profitability of your business. They include:


  • A constant need to find new products: The lifespan of most dropship products is about 60 months, after which the market becomes saturated and sales dry up. This means you must continuously research and monitor trends to stay ahead of the competition.


  • Supplier reliability issues: Subpar product quality and spotty supplier reliability can destroy your reputation. Issues with suppliers, such as stock shortages or shipping delays, directly affect your customers, and you have limited control over these aspects.


  • Limited branding and customization: Since products are shipped directly from the supplier, you have limited control over the branding and packaging of your products. This can make it harder to build a unique brand identity and customer loyalty.


  • Shipping complexities: If you source products from multiple suppliers, shipping can become complicated. Customers may receive orders in multiple shipments, which can lead to higher shipping costs and customer confusion or dissatisfaction.


  • High competition lowers potential profit margins: The low barrier to entry means that you may be competing with tons of other dropshippers who sell the same or similar products as you. In fact, 81% of the top dropshippers are located in the U.S. In turn, this can drive down prices and profits, particularly in popular niches. Standing out in such a crowded space requires great marketing, and the ability to identify trending products early.


  • Customer service challenges: Handling customer inquiries and issues can get trickier when you're not in direct control of the inventory. You may find yourself waiting for your supplier to resolve issues with an order. To minimize these types of hiccups, you’ll need to define a fast, reliable way to communicate with your suppliers—while also taking ownership when a mistake occurs. 


  • Limited control over inventory and lead times: Since inventory is not in your hands, you have limited control over stock levels and lead times. This can result in unexpected out-of-stock situations and longer delivery times. To minimize this, it’s important to work with reliable suppliers and implement inventory tracking tools that sync with your suppliers' systems in real-time.



pros and cons of dropshipping and is it worth it


How much profit does dropshipping make on average?


The average profit margin for dropshipping tends to hover somewhere around 20% to 30%, according to Zippia. Considering that the average retail fulfillment profit margin is 3% to 10%, dropshipping can yield much higher profit margins than other forms of commerce.


Of course, this is just the average. The potential profit from dropshipping will vary widely based on various factors, including the type of products you're selling, your marketing strategy and the size of your business. Even within the same niche, there will be fluctuations based on the specifications of each product.


Looking at recent data, the top product categories for profit potential include the following:


  • Fashion and apparel: As one of the most rapidly growing niches, fashion and apparel see gross margins ranging from 30% to 50%, according to Fabric. The global market for fashion and apparel items is predicted to rise at a compound annual growth rate (CAGR) of 12.8% from 2022 to 2025​, per Dropshipping.com.


  • Electronics: This category, particularly significant in North America, has an estimated gross margin of around 20%, according to Fabric. Electronics account for about 30% of the North American dropshipping market, reports Ecommerce Platforms.


  • Home and garden: This sector, which includes home décor and furniture, had a market value of $29.9 billion in 2022 and is expected to grow at a CAGR of 12.3% through 2028, per Dropshipping.com. According to Fabric’s data, gross margins in this category can be estimated at 50% to 60% for home décor and lighting, and around 45% to 50% for furniture​.



Google Trends search for home decor


  • Toys and baby products: Falling under the broader category of toys, hobby and DIY items, this niche can expect gross margins of 40% to 50%, according to Fabric. Ecommerce Platforms notes that these segments are driving significant revenue among online shoppers in various regions, including the U.S., Canada, Japan, China and Europe.



  • Food and personal care goods: Expected to grow at a 30% CAGR through 2025 (per Dropshipping.com), this market is becoming increasingly profitable​—especially in fragrances, cosmetics and skincare items.



is dropshipping worth it - using google trends


Pro tip: Gross margin, which is calculated as the difference between sales and the cost of goods sold (COGS) divided by revenue, serves as an indicator of potential profitability in dropshipping.



gross margin formula


Which dropshipping model is best for your business?


Each dropshipping model has its own set of advantages and challenges, including varying profit potential. Your choice will depend on factors like your familiarity with a particular market, available capital and long-term business goals. Conduct thorough market research to determine the best dropshipping products and set your business up for success. Below are three key models to consider.



01. Low-ticket dropshipping


This model involves selling lower-cost products (like socks or mugs) in high volumes. The idea is to make small profits on a large number of sales. The higher your average monthly sales volume, the greater your potential for a profitable dropshipping model.


  • Profitability: The profits per item are relatively low, and many dropshippers in this category make less than $500 per month. However, with effective marketing and a high sales volume, profitability can increase.


  • Strategy: Success in low-ticket dropshipping often hinges on effective digital marketing strategies to drive as much traffic and sales as possible. Consider using Facebook Ads, Google Ads and Instagram Ads—all of which you can create and manage from your Wix dashboard—to reach more people instantly.



02. High-ticket dropshipping


High-ticket dropshipping focuses on selling fewer but more expensive products, like furniture or luxury goods. High-ticket items tend to have an average price point of $200 and above. These items often have a higher perceived value and require a more targeted marketing approach. With this model, you can focus your efforts on marketing a handful of products each month versus hundreds or thousands of low-ticket items.


  • Profitability: This model can lead to higher profits, potentially ranging from $1,000 to $10,000 per month, depending on factors like product selection, marketing and customer service. 


  • Strategy: High-ticket items often require more detailed product descriptions, higher quality customer service and a more tailored marketing strategy. Seek products that are utilitarian-focused and/or focused around a particular niche, such as sports, hobbies or outdoor equipment.



03. Private-label dropshipping


In private-label dropshipping, you sell products manufactured by a third party under your own brand name. This model allows for greater brand control and differentiation, helping you to build brand recognition.


  • Profitability: While initial costs might be higher due to branding and customization, private-label dropshipping can yield higher profit margins due to brand loyalty and unique product offerings.


  • Strategy: This approach requires a focus on brand-building, product quality and customer loyalty. Your marketing should emphasize your brand story, mission and values.



is dropshipping worth it - increase orders


Tips for a profitable dropshipping business


Making dropshipping profitable requires a combination of strategic planning, market understanding and effective execution. It also requires patience, persistence and a willingness to continuously learn and adapt to the changing market. 


While dropshipping offers flexibility and low startup costs, its success heavily depends on how you manage and grow your business. Here are actionable tips to help you navigate dropshipping and maximize your profits:


  • Select a profitable niche: Choose a dropshipping niche based on market demand, your interests and profitability. Research current trends and consider niches with less competition but high customer demand. Use research tools like Google Trends, SaleHoo or Jungle Scout (for selling on Amazon) to identify products with the most potential.


  • Establish reliable supplier relationships: Partner with reputable suppliers who offer quality products and reliable shipping. Regular communication and good relationships with suppliers can lead to better deals and smoother operations. For more insight, see our recommended list of the top dropshipping suppliers.


  • Optimize your website for sales: Do you know how to make a website that drives sales? If not, take some time to learn. Ensure that your site is user-friendly, fast and optimized for conversions. High-quality images, detailed product descriptions and a seamless checkout process can significantly improve sales.


  • Use effective marketing strategies: As Allison Lee, Editor at Wix, says "Think audience-first". Invest in marketing campaigns that target your specific audience. Utilize social media, SEO, email marketing and paid advertising to drive traffic and conversions. With Wix eCommerce, you can manage and optimize these campaigns directly from your site editor.


  • Focus on customer service: Provide excellent customer service to build trust and customer loyalty. Respond promptly to questions and offer efficient problem-solving and a hassle-free return policy to enhance customer satisfaction.


  • Offer competitive pricing: Part of knowing how to price your products for dropshipping is knowing how to remain competitive. Research your competitors' pricing and offer competitive rates without compromising your profit margins. Consider offering discounts or promotions to attract customers.


  • Continuously expand your product range: Keep your store fresh and appealing by periodically adding new products. Test different products to see what resonates best with your audience.


  • Analyze and adapt: Regularly analyze your sales data, market trends and customer feedback. Use this information to adapt your strategies, product offerings and marketing efforts.



spa and home dropshipping site


More tips for starting a dropshipping business


To set yourself up for success when starting a dropshipping business, it's important to lay a strong foundation for your business overall. In other words, make sure to:


  • Research the market thoroughly: Before diving in, conduct extensive market research to identify trends, demand and competition. Understanding the market landscape is crucial for making informed decisions.


  • Choose the right eCommerce platform: Select a platform that suits your business needs. For example, the Wix eCommerce platform offers features and integrations crucial for dropshipping, including a dropshipping website builder.


  • Develop a strong brand identity: Create a brand that resonates with your target audience. This includes a memorable name, a professional logo and a consistent theme across all your marketing materials and in all your content creation. You can use Wix’s free business name generator and logo maker to get started.


  • Legalize your business: Ensure you have all the necessary licenses and permits to operate legally. This may include registering your business, obtaining a tax ID for sales tax and understanding eCommerce regulations.


  • Create a solid business plan: Outline your business goals, strategies, financial projections and growth plans. A well-thought-out business plan can guide your decisions and keep you focused.


  • Focus on SEO from the start: Optimize your website and product pages to increase search visibility and attract organic traffic. Use tools like Wix’s built-in SEO Assistant to optimize content across product pages and blog posts. Wix’s Semrush integration can help you find relevant, high-quality keywords that accurately describe your products and services. 


  • Network with other dropshippers: Join forums, social media groups and online communities related to dropshipping. Networking can provide valuable insights, advice and potential partnerships.


  • Plan for customer support: Set up efficient customer service processes to handle inquiries, complaints and returns. Good customer service can lead to repeat business and positive reviews. Provide an FAQ and use automated tools such as pre-generated chat responses to help customers find the information they need quickly.


  • Learn how online marketplaces work: Dropshippers often operate within online marketplaces where they showcase and sell their products. They sometimes use extra features, like chatbots, to help streamline the shopping experience. Navigating the dynamics of these marketplaces is key to success. Leveraging video content to showcase products can be a powerful tool in dropshipping, providing customers with a visual understanding of the items they are considering purchasing.



Is dropshipping worth it? FAQ

Does dropshipping really work?

Yes, dropshipping can work but success depends on various factors, including product selection, supplier reliability, effective marketing and customer service. 

While many entrepreneurs have found success with dropshipping, it's not without its challenges. The low barrier to entry results in high competition and the reliance on third-party suppliers can sometimes lead to logistical complications. Because dropshipping usually operates on thinner margins compared to traditional retail, it’s important to keep your costs in line and be strategic in how you scale. It's important to approach dropshipping with realistic expectations, understanding that success requires time, effort and strategic planning. With the right approach and dedication, dropshipping can be a profitable and rewarding business venture.

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Allison Lee headshot

Allison Lee

Editor, Wix eCommerce


Allison is the editor for the Wix eCommerce blog, with several years of experience reporting on eCommerce news, strategies, and founder stories.

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