Is Dropshipping Dead or Still Profitable in 2024

Since the outbreak of COVID in 2020, many people have started to wonder if dropshipping is still a viable business model.

After all, it has faced a lot of challenges in recent years, including delayed shipping issues, limitations of Facebook Pixel on iPhones, and most recently, the rise of Temu.

However, statistics show that dropshipping is still a lucrative business. The global dropshipping market size is projected to reach a staggering $476.1 billion by 2026, growing at a compound annual growth rate (CAGR) of 28.8%.

So, why do many dropshippers fail? It’s because they use the wrong marketing strategies and don’t spend enough time picking trending products.

In this article, I’ll show you why dropshipping is far from dead.

Is Dropshipping Still Alive: Google Trends For Dropshipping

Dropshipping is definitely on the rise, as reflected by the growing interest in the search term “dropshipping” over the last 5 years. Although there have been some ups and downs, the trend is still steadily increasing.

People often wonder if AliExpress dropshipping is still a viable option, and the answer is yes. In fact, searches for “aliexpress dropshipping” have seen a significant increase over the last 5 years. This is because AliExpress is a platform where you can source a wide variety of products from thousands of sellers at affordable prices. 

On the other hand, the trend for “alibaba dropshipping” isn’t as impressive. As a B2B-oriented platform, Alibaba suppliers usually have a requirement on minimum order, making it costly for dropshipping. Moreover, Alibaba has fewer payment options, which could also contribute to less interest in their dropshipping services.

As for Amazon dropshipping, it’s a common question of whether it’s profitable or not. Although Amazon is a great platform, the search term “amazon dropshipping” has a lower growth trend compared to AliExpress. Dropshipping on Amazon is more technical and comes with FBA fees and storage fees, which only increase if the product is in their warehouse for more than 6 months.

Is Dropshipping Worth It?

If you’re considering starting a low-cost business, dropshipping might still be a good option. The interest in dropshipping has skyrocketed in recent years. But, to be successful, you’ll need to choose the right products, increase your profit margins, and collaborate with the right suppliers.

While starting a dropshipping business is simple in theory (create an eCommerce site, find a supplier, pick your products), it does require a big investment of time and attention. For example, you have to spend a lot of money on social media ads to increase your brand awareness and drive traffic to your dropshipping store. 

With dropshipping, you won’t get a sale if you don’t invest in marketing campaigns. If you’re not familiar with dropshipping, here’s a guide to help you learn more:

• What Is Dropshipping and How Does It Work?

Is Dropshipping Dead in 2024?

Contrary to popular belief, dropshipping is far from dead. In fact, the industry is expected to reach a market valuation of $557.9 billion by 2025. Currently, 27% of online retailers use dropshipping and it can even earn 50% more profit compared to keeping a stock inventory.

Every year there are rumors of dropshipping dying, but in reality, some dropshippers are making thousands of dollars every month. After all, dropshipping is a business model that requires low initial costs. you only purchase products when you make a sale, which reduces overhead costs significantly.

The model allows for easy scaling without the need for significant inventory management. This flexibility is crucial for adapting to market trends and consumer preferences.

Is Dropshipping Still Profitable?

The answer is a resounding yes! Dropshippers can earn anywhere from a few hundred to several thousand dollars per month. Most successful dropshippers have reported monthly incomes ranging from $1,000 to $50,000, depending on their sales volume and profit margins.

If you want to increase the profitability of your dropshipping store, you usually have to choose high-demand, low-competition products and reduce customer acquisition costs (CAC) using effective marketing strategies. 

AliExpress Dropshipping: Estimated Earnings

The amount of money you can make with AliExpress dropshipping varies widely based on several factors, including the types of products you sell, your marketing strategies, and your ability to manage costs effectively.

The typical profit margin for dropshipping ranges between 15% and 20%. You should aim for a margin of around 20% to cover various expenses and still generate a healthy profit.

High-ticket items (expensive products) can have lower percentage margins but still yield significant profits due to their high price points. For example, a 30% margin on a $5,000 item results in a $1,500 profit. Low-ticket items might have higher percentage margins but lower absolute profits.

Now, let’s use an example to calculate how much you can make as a dropshipper. Let’s say you source a product for $15 on AliExpress, and after factoring in shipping and ad costs, you sell it for $30 and make a profit of $10 per product.

So, if you’re aiming for a $100,000 annual income from dropshipping, you’ll need to sell 1000 products a month. That breaks down like this:

• $10 profit x 1000 orders = $10,000 per month
• $10,000 per month x 12 = $120,000 per year

Keep in mind, these are just estimates and your profits will depend on your investment and other expenses. 

Dropshipping vs Affiliate Marketing: Which One Is More Profitable?

Let’s talk about the profitability of dropshipping versus affiliate marketing. Both can be quite profitable but in different ways.

With affiliate marketing, you make commissions (let’s say 5%) on products sold. To make $100,000 a year (like with dropshipping), you’d need to sell products worth $340 a day, or $10,000 a month. That means your customers would have to buy products worth $7,000 a day.

Dropshipping, on the other hand, often has a 20% profit margin. So you’d only need to sell products worth $1,700 a day to make the same amount.

Now, this is just a quick look at the numbers. Dropshipping may be more profitable, but it also requires more set-up and comes with higher risks. On the other hand, affiliate marketing has a lower entry barrier, but doesn’t bring in as much quick bucks. 

Is Alibaba Dropshipping Worth It?

If you’re new to the dropshipping game, you might be wondering why some folks prefer selling through AliExpress or Amazon over Alibaba.

Well, the thing is, dropshipping works on a retail model, so selling in bulk quantities (which Alibaba specializes in) can be a bit pricier for us dropshippers. That’s why AliExpress and Amazon are easier to sell from and often result in higher profits compared to Alibaba dropshipping.

Is eBay and Amazon Dropshipping Allowed?

While these platforms have some restrictions that make dropshipping harder, it’s still possible to dropship on both eBay and Amazon.

For instance, eBay doesn’t allow products from China and you need to be based in the US. Amazon, on the other hand, requires that deliveries arrive within a week. These are the main reasons why many dropshippers avoid these platforms. But, if you can find a way around these restrictions, you’re good to go with dropshipping on both eBay and Amazon.

If you’re interested in Amazon dropshipping, here’s a guide to help you get started:

• How to Do Amazon Dropshipping: Complete Beginner’s Guide

What Are the Biggest Problems That Dropshippers Face in 2024?

Because dropshipping is highly intangible, dropshippers might encounter these issues:

• Shipping Delays: If your products are taking too long to arrive, customers might not be too happy and could end up shopping elsewhere.
• Quality Control: Unfortunately, some merchants don’t always follow proper protocols when it comes to the quality of their products.
• Mis-shipped Orders: It’s a bummer when customers receive products they didn’t even order.
• Refund Struggles: Handling returns and refunds can be a headache and could even harm your reputation with payment gateways.

To make drop shipping work, you have to put in the time and effort. And the biggest reason people fail? Their mentality.

Don’t worry, it’s not all doom and gloom. Instead of focusing on why you might fail, zero in on the fundamentals that will set you up for success:

• Choosing the right niche (check out our list of 130+ dropshipping products)
• Finding a winning product 
• Marketing like a pro
• Giving customers an amazing experience

Find products that people want, that solve a problem, save time, or fill a gap. It’s all about testing and tweaking until you find the winning combination. So, don’t give up too soon. 

How To Be Profitable With Dropshipping?

According to experts, 10% to 20% of dropshipping businesses succeed. You can stand out from dropshipping competition by doing things like:

1. Choose a Unique Niche

If you want to stand out in the competitive dropshipping market, choose a unique and profitable niche. You can conduct thorough market research to identify high-demand, low-competition niches. Use tools like Google Trends and keyword analysis to understand market demand and trends. Focus on niches that align with your interests and expertise, as this will help you better understand your target audience and create more compelling marketing strategies.

2. Find Reliable Suppliers

Alibaba and DSers are two popular websites that have thousands of suppliers ready for dropshipping store owners. It’s important to build a relationship with suppliers and only work with those who are reliable and provide quality products. You should also prioritize customer service and be able to handle any mistakes made by your suppliers. To help you get started, we’ve compiled a list of the best dropshipping suppliers. 

3. Focus on Customer Service

Many dropshippers focus only on marketing and forget about their existing customers. Existing customers are more likely to make another purchase, so don’t neglect them. Prioritize customer service to retain customers and increase the chances of repeat purchases.

4. Build a Strong Brand

Branding your dropshipping store is key to standing out from the competition. A strong brand will gain the trust of your target market and make it difficult for others to copy your online business. 

5. Make your store mobile-friendly

More than 51% of online shoppers prefer mobile over other marketing channels. A mobile-friendly store will increase your profit margins and provide a better shopping experience for customers. Don’t worry if you’re not tech-savvy. You can simply choose a mobile-responsive theme for your Shopify store, ensuring it adjusts seamlessly to different screen sizes.

Final Words

If someone asks, ‘Is dropshipping dead? You can assure them that it most certainly is not.

With the world now so reliant on online shopping and eCommerce, there is almost no chance that the dropshipping industry will stop.

So if you’re interested in dropshipping, do your research, choose some trending products, and start selling.

James Johnson

James Johnson, the founder of DropshippingCourse.org, launched his first ecommerce store in 2008 with just a $500 investment. Through dedication, his initial store generated over $500,000 in sales in the first year. By the second year, the store’s sales had reached $1 million, and by the third year, sales soared to $1.5 million, granting him the financial freedom he had always dreamed of.

Motivated by his own success, James aimed to help others achieve similar financial freedom. So, he created the free Dropshipping Course. In this course, he offers comprehensive guidance on launching a dropshipping business, covering essential topics such as niche research, market analysis, store building, supplier approval, conversion optimization, traffic generation, and business automation.

For those seeking more personalized guidance, James also offers a 1-on-1 dropshipping coaching service. Through this mentorship, he shares his secret strategies with those eager to achieve extraordinary results in their own businesses.