Today, if you were to buy a product online, chances are it is a dropshipped item. Dropshipping is a business model where a business does not have to hold inventory. A dropshipping store acts like a middleman, taking the orders and sending them to another company. This other company, usually a supplier, will ship the product to the customer who ordered it. Statistics about dropshipping vary from one source to another. But it can help you learn more about the business model.
So in this article, I want to highlight some of the statistics you need to know about the dropshipping market size. From market size around the world, products that dominate the market, and what eCommerce platforms are leading the way, I will also provide some analysis so that the statistics make more sense for you.
Dropshipping Market Size Statistics You Need To Know
Analyzing statistics can help show a better picture of what is happening. Here are some of the statistics I want to highlight on the dropshipping market size in different categories ranging from product types, different regions, and platforms:
Dropshipping Market Size and Growth At CAGR of 26.1% Till 2030
The first thing we need to look at is the dropshipping market size and its potential growth in the future.
The first insight you need to know about the dropshipping market size is how big it is. At a staggering 280 billion dollars, the current market size is large enough to make anyone want to start their own dropshipping business. This rise was partly thanks to the coronavirus pandemic, which saw dropshipping rise to an all-time high and growing ever since. People saw the potential in such a business model, encouraging more entrepreneurs to enter the market.
- Expected to grow to just over $1.4 trillion by 2030 at a CAGR of 26.1%
The growth is expected to stay consistent till 2030. The compound annual growth rate or CAGR is expected to be over 25% for each year up to 2030, and the dropshipping market size will eventually reach and exceed the trillion dollar mark. That shows how lucrative the market is and why so many are entering the dropshipping market.
- 23% of all online sales are fulfilled by drop shipping. eCommerce giants like Amazon and Walmart fulfill the rest
The combined eCommerce sales are over 5 trillion dollars. With 23% of that, dropshipping is the fastest-growing business model, and it has not even been 10 years since its popularity grew. Since most drop-shippers are small business owners, giants will rule the market. But this shows how anyone can enter the market with ease.
10% Of Dropshipping Stores Able To Make It Past The First Year
Let’s look at some of the dropshipping challenges and how successful is the dropshipping business model.
- 90% of dropshipping fail within four months, with even fewer making it past the first year
- 87% of drop shippers say finding reliable suppliers is the most difficult part of the business model
As you can see, only 10% of dropshippers make it out of their first years. There are many challenges drop shippers face, and the primary challenge is the immense competition in the market. Product categories like clothing are the most competitive, and few dropshippers can last in the market.
The dropshipping model is all about how fast the products can be produced and shipped to the customers. This is where finding reliable suppliers is another major issue. Without good vendor relationships, drop shippers fall into the trap of not fulfilling orders in time and losing customers fast. However, that is not always the case.
- Over 27% of retailers use dropshipping for fulfillment
- Dropshipping businesses typically have a 15–20% profit margin
Retailers constantly look for reliable partners, making B2B dropshipping a lucrative business. Along with order fulfillment, B2B drop shippers can also give additional services like inventory and order tracking to help maintain healthy profit margins.
That is why you should not be discouraged by the high failure rate in the dropshipping business. The dropshipping company is still relatively new. By providing added-value services, your dropshipping business can escape its first year of failure and continue to gain a sizeable share of the dropshipping market size.
Asia-Pacific And China Are The Kings Of Dropshipping Regions
Now, let’s see the global dropshipping market size and how it is divided worldwide.
- With 62.8% of dropshipping stores in the US and a market share of over 35.72% in 2023,
Most eCommerce dropshipping stores are located in the US. The US makes up over 60% of the dropshipping stores in the world, closely followed by Canada and the UK. It shows how easy it is to enter the North American market.
However, even with North America’s dominance in several stores, the Asia-Pacific region holds the largest market share in the world. This is due to the sheer number of people in the area and the popularity of the dropshipping business model for digital buyers.
- China is the leading country in the dropshipping market, growing at a CAGR of 29.3% from 2020 to 2027.
But, the true kings of dropshipping go to China. They have over 30% of the 35% market share in the Asia-Pacific region alone. This is largely due to the number of suppliers in China. Unsurprisingly, China is also where most of the Western world gets its supply of products. China also has the largest CAGR for dropshipping in the world and shows no signs of slowing down.
- Germany is the fastest-growing dropshipping market in Europe, with a CAGR of 16.9%.
Over in Europe, the UK holds the largest market share in drop shipping. Yet, Germany’s expected CAGR of 16.9% might overtake them in Europe. The popularity is slowly growing all over Europe, with the third-highest market share in drop shipping.
- Middle Eastern countries and Africa are the least popular dropshipping markets.
The MENA region comprises the Middle Eastern countries and the African continent. Dropshipping is currently the lowest here than the rest of the world. It might hold the lowest market share but also has the highest potential because it is an untapped dropshipping market. With suitable investments and incentives, the MENA region is the next area to face a late boom in the dropshipping market size.
Dropshipping Is Dominated By Gen Z And Millennials
Who are the ones that are buying and selling dropshipped items around the world? The statistics show it is dominated by Gen Z (1995-2010) followed by millennials (1980-1995)
- 24% of dropshipping store owners were small business owners in 2022
- Gen Z runs 38% of Dropshipping stores, while millennials run 30%
In 2022, 24% of dropshipping stores worldwide were opened by small business owners looking to grow their businesses. It is mainly startups who decided to enter the market around this time to capitalize on the growing popularity of the dropshipping business model. At 38%, Gen Z is the largest group to own dropshipping stores, followed by millennials at 30%. The ease of entry into eCommerce with dropshipping and profitability is why the younger generation prefers dropshipping over traditional business models.
- The largest age group of digital buyers is 25 to 34 years old, at 20.2%
The younger generation also shares the most significant percentage of buying dropshipped goods. Dropshipped goods appeal to the younger generation of buyers as well. Over time, the older generation might grow interested in dropshipped products, especially in healthcare. This opens up the market and is one of the contributing factors to the increase in dropshipping market size till the next decade.
Fashion And Apparel The Top Dropshipped Product Category
Now that we have looked at the platform let’s see which products contribute most to the dropshipping market size.
- As of 2023, the apparel market generated $1.74 trillion in revenue worldwide, thanks in large to drop shippers
- Of the top 1% of dropshipping stores, 26% of dropshipping stores are Apparel stores
Clothing is by far the largest dropshipping market out there. With the ability to customize clothes and the number of variants available, it is easy to see why online shoppers prefer to have clothes drop-shipped to them. The fast delivery combined with the ease of production makes clothing the most convenient yet competitive dropshipping market to enter. It is also no surprise that the top-performing stores are also apparel stores.
Here are the rest of the product categories and their percentage of sales in dropshipping:
Shopify The Dark Horse eCommerce Platform For Dropshipping
So far, we have seen the dropshipping market size, where it is most popular, and the age of dropshippers. Now it is time to see some eCommerce platform statistics for dropshipping.
- More than 30% of eCommerce stores use dropshipping to fulfill orders.
- Dropshipping contributes to 34% of Amazon sales.
The most surprising statistic is how prominent dropshipping is in the Amazon marketplace. Amazon sellers worldwide send out products in the millions, and dropshipping is possibly the fastest way. By removing the middleman, dropshipping is becoming the go-to way for sellers to fulfill their eCommerce bulk orders as fast as possible.
- WooCommerce has that position, powering 27.86% of the world’s dropshipping websites. Squarespace is the second, powering 21% of dropshipping websites.
For people who want to create their eCommerce stores, WooCommerce and Squarespace are popular platforms. Due to the ease of creating eCommerce websites on these platforms, most sellers are opening their stores here.
Third is Shopify, which has less than half the dropshipping market share compared to WooCommerce and Squarespace. However, Shopify also holds the highest growth numbers in overall eCommerce sales despite fewer shops powered by Shopify, showing more growth than other platforms. So expect this particular statistic to change in the coming years as
Selling Your Dropshipping Products With A Bulk Order App For Greater Effectiveness
The competitive eCommerce dropshipping market means any advantage you can have will help your business. There are many apps for Shopify dropshipping business that you can look at.
I want to focus on a mix and match variant builder app for your Shopify dropshipping store. Here is an example of how such an app can help your dropshipping business:
Here, the store has different product color variants. The app allows the display of all available variants on one product page. This allows the store to sell the variants on one page instead of having multiple product pages. Customers are more focused on shopping rather than wasting switching between product pages.
Next, the customer can select the quantity of each variant in a mix-and-match bundle to choose which variant and how much they want. Once customers are happy with their choices, they can add all the variants to the cart with one click.
For a dropshipping store, this is beneficial because customers are spending more time shopping. Customers in your dropshipping store can easily shop, select all product variants, and add everything to their cart with one click. This makes shopping more efficient and convenient for customers and increases the average order value for the store. It also increases the chances of customers going through with their purchase and is less likely to abandon their cart.
Bottom Line
These statistics showcase just how competitive the dropshipping market is. Everyone wants to enter the market because of the dropshipping market size. I hope the analysis of these statistics has given you a better understanding of the dropshipping market for your success in eCommerce.
