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Dropshipping Success Rate (How To Improve Yours)

8 Minutes Read
Dropshipping success rate
Ana Gelevska

Ever wondered if dropshipping is the golden ticket to e-commerce success? 

With low startup costs and the promise of passive income, it’s no surprise that many entrepreneurs are trying out this business model.

But before you jump in, it’s crucial to understand the success rate and what it takes for success.

While dropshipping offers an enticing opportunity, not everyone strikes gold. Success depends on several factors. Let’s take a look at what it takes.

Everything about Dropshipping 

At its base, dropshipping is a sales execution and inventory management method where store owners do not hold onto their stocks and purchase the products from a third party who then ships it directly to the customer. 

The seller does not handle the product directly which leads to a reduction in upfront costs. 

This sales method is simple and flexible and potentially only requires a computer and internet connection. Like any other business model, dropshipping is not challenge-free and has its specific success rate that is mandatory to understand before taking the big step. 

What Is the Success Rate of Dropshipping

what is the dropshipping success rate

The success rate of dropshipping is between 10-20%

While this range might seem low, it’s important to understand the contributing factors for these numbers. Poor product selection, unreliable suppliers, and inadequate marketing efforts often lead to failure.

This business method requires dedication and a good strategic plan because even though only a small percentage of dropshippers reach the desired success, those who do achieve significant rewards. 

Strong competition, lack of accurate research and being unrealistic in regard to expectations are what credit the low success rate. 

Success is also subjective. We define success as generating a consistent and increasing net profit from sales after accounting for all operational costs. 

According to ZipRecruiter, the average dropshipping salary is $40,970 so if you play by the rules and work diligently, you can potentially earn a modest income in this field. 

With the right approach and tools, you can improve your chances of becoming part of the successful 10-20%. 

We created a custom Shopify spy tool just for this, the Koala Inspector.

Koala inspector will provide you with real-time analytics and lead you to success. It will give you insights into competitor’s strategies, performance metrics and help you tailor your campaigns to drive engagement.

Being the most talked about e-commerce analysis tool out there, it is a must have for your store. Oh yes, and it’s free. 

The Reality of Dropshipping Success Rate

Reality of dropshipping success

So many businesses tailor the dropshipping method and the success rate is not measured in the same way for every store.

Even the definition of success changes and it depends highly on individual goals and circumstances. Some industries see dropshipping as a pure hobby, or a side hustle which provides a supplementary income stream. 

These businesses see their enterprises as being successful even if they do not make too much money and only profit a few hundred dollars every month. 

Other business owners set higher targets and aim to construct a fully grown and successful e-commerce empire. 

Dropshipping success rate is not a one size fits all and even the profitability exists on a wide range. You will be surprised but some businesses barely break even or make just enough to cover the time they invest. 

For others and those who achieve sufficient success, dropshipping can generate a secure and comfortable income. 

At the top of the success pyramid, stand the highly successful dropshipping businesses who easily reach six figures annually and yield sustainable profit margins. 

The top performers expand their range of products regularly, strengthen their presence online and reinvest their earnings so they can escalate their business operations. 

To set realistic expectations and to create a custom-made strategy suited for your individual goals, acknowledging the range of outcomes, is essential.

Why Dropshipping Businesses Fail

Why dropshipping business fail

There are several key factors that contribute to dropshipping low success rates and one of the main reasons is poor niche selection. 

Rushing into oversaturated markets or going for niches that are based on fashionable trends will not escalate the business.

Focusing on sustainable demand could make all the difference. 

Choosing the wrong product to sell, unable to find reliable suppliers and platforms or wrongly managing the inventory you desire, can be the next barrier between making it big or staying behind as all these will influence the shipping and delivery of goods, poor quality and customer dissatisfaction. 

Do not underestimate the importance of excellent customer service. It will make your business stand out in the crowded marketplace. 

Another parameter that can put dropshippers off guard are the secret hidden costs. 

Advertising expenses, platform fees and delivery returns are all things that must be taken into account because if they are not managed properly, they can significantly eat into your money and profits. 

Before giving up the success of your e-commerce business, remember that time, persistence, and determinations are the elements that will make you grow. 

7 Strategies to Improve Your Dropshipping Success Rate

Increase your chances of dropshipping success by implementing these 7 key strategies:

1. Niche Selection 

To make your business model stand out, it is crucial to choose the right niche. Aim for finding the balance between the two big P’s: passion and profitability. For more insights on niche selection, learn about selecting the right niche.

2. The Right Products 

Dropshipping success comes along with the right product. Use powerful and influential research tools like Koala Inspector to analyze trends and fashion, evaluate the ongoing competition, and make impeccable data-driven decisions. Explore effective product research strategies to find the right products.

3. Get Reliable Suppliers 

You want to ensure the quality of your product and make sure your shipping and deliveries are timely; therefore, it is essential to partner with reliable and trustworthy suppliers, which will contribute to your customer’s satisfaction.

4. The Right Platform 

Select an e-commerce platform that aligns with your business needs. Discover the best platforms for dropshipping to match your business goals and budget.

5. Build a Brand 

Developing a strong brand identity with a unique language and a different approach is a must if you want to make a difference. This will lead to customer loyalty and eventually the successful dropshipping rate you are after.

6. Marketing Your Stores 

Efficient and strong marketing strategies are the key to drive traffic and take sales to new heights. Learn about effective marketing strategies for your dropshipping store.

7. Provide Great Customer Service 

There is no room for compromise when it comes to exceptional customer service. Engaging new customers is one thing, but preserving them is another. Encourage repeat purchases and generate positive word-of-mouth referrals.

Adjust Expectations and Plan for the Long Term

adjust expectations long term

Dropshipping success is not something you can expect to happen overnight. If you are striving for success, realistic goals and the long-term perspective will escort you through the challenges. 

It is no secret that the e-commerce landscape is evolving constantly and if you adopt the changes the market displays, you are in for success. 

You cannot rely on building a strong brand only as part of your strategy. 

See it as a necessity as your compelling identity will push your brand forward and make it stand out. Invest your time in ongoing market research as the industry moves faster than you think. 

Trends, fashion, and your customers preferences are shifting promptly so in order to stay ahead of all other competitors, analyzing the market and identifying opportunities are essential. 

Koala Inspectors’ uncompromising tools will help you gain real-time insights of the most successful Shopify stores, all effective market strategies and the trending products that are right for now. 

Use a data driven approach to pivot your strategy and make the most influential decisions for your business. Boosting your dropshipping success is about merging all elements together. 

When you set realistic goals and expectations, when you build a strong brand identity and assure you are up to date, you will guarantee you will not only survive, but also succeed in the world of dropshipping. 

In times, the success rate might seem daunting, however you can increase your chances and become one of the few who live a profitable and sustainable dropshipping business.

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Ana Gelevska
Ana Gelevska
Ana is a creative and customer-oriented freelance writer with over 5 years of experience working with eCommerce global clients. Ana enjoys breaking down the latest eCommerce trends and diving into the needs of today’s merchants.

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