If you’re wondering how much you can make or average as a dropshipping business owner, this blog post covers all the nitty-gritty details of how much dropshippers make on average.
To preamble this discussion and ensure that this blog helps you clearly understand how much dropshippers make on average, let’s briefly discuss how dropshippers make money using the dropshipping model?
目录
How Do Dropshippers Make Money?
Fundamentally, dropshippers make money from the difference between the price at which they purchase a product from dropshipping suppliers and the selling price to the customer or end-users.
Take the example of a Shopify dropshipping business owner who buys a middle-ticket product from a dropshipping supplier for $20, including shipping and order processing fees, but sells it for $75 to the end consumer. In this case, for every successful order placed, the dropshipping business owner would make $50:
Courtesy: Orbelo–How the dropshipping business model works
With that mentioned, it’s also worth noting that:
How Much Do Dropshippers Make on Average?
How much dropshippers make on average or from every successful sale varies from one dropshipping business owner to the other, often determined by factors like:
- Whether the dropshipper is doing low, medium, or high-ticket dropshipping
- The percentage differences between the buying and selling prices —most dropshippers aim for as high a profit margin as possible, but the widely accepted profit margin is nothing below 20%
- Other costs; for example, if a dropshipper foots the shipping cost —because offering free shipping or bundling it into the purchase price can motivate customers to purchase, per order fees, the commission rates, etc
Because of these and many similar factors, like order fulfillment costs from a dropshipping supplier, the commission rates, store size, etc., how much dropshippers make on average varies.
Factors That Influence How Much Dropshippers Make on Average
The main factors that determine how much dropshippers make on average include:
1: Dropshipping category
Courtesy: ECom Experts
Dropshipping has three main types, levels, or categories, and the level at which a dropshipper operates can significantly influence how much that dropshipper makes on average.
The three levels are:
Courtesy: Tidio
1: Low-ticket dropshipping
Low-ticket drop shipping is the most common type of dropshipping and what most people usually refer to when thinking about dropshipping. It involves selling low-ticket, or low-priced items, often sourced from platforms like AliExpress and other dropshipping supplier platforms.
Low ticket dropshipping also encompasses the philosophy of “targeting to sell many cheap, low-profit-margin items per day to many customers,” which can cumulatively amount to a lot of money at the end of the day.
Courtesy: Drop Ship Lifestyle
Low-ticket dropshipping has advantages and disadvantages that can determine how much a dropshippers makes on average.
For example, a low-ticket dropshipping business is easy to set up, especially using platforms like AliExpress as your supplier. On the other hand, competition is usually high in low-ticket dropshipping, and success usually depends on how well you can generate traffic and drive customers further down the sales funnel. The higher the traffic, the more a dropshipper can make on average.
NOTE: Although there’s no accepted standard price point at which a dropshipping product stops being low-ticket and becomes medium-ticket, the guideline is anything a customer would purchase without considering the price too much —a range of $0.99-$10 (or $20) is acceptable:
Dropshippers with low-ticket stores, the kind of store common with beginner dropshippers, can expect to generate anywhere from $0-$1000 or more per month on average within their first 3-6 months of starting business operations.
However, this income varies significantly depending on various other factors like the dropshipping commission, rates, etc., and more importantly, successful marketing and the drop shipper’s expertise. The more experienced and knowledgeable a dropshipper is, the higher the chances of more revenue at any category/level.
2: Medium-ticket dropshipping
Medium ticket dropshipping is the middle ground between low and high ticket dropshipping. Dropshippers in this category usually sell middle-ground products —products not as expensive as high-ticket items or as cheap as low-ticket items.
For example, and keeping in mind that there are no accepted or industry-wide standards, a medium-ticket dropshipping item could cost $20>$100 or more, depending on the niche and the product in question.
Like low-ticket dropshipping, medium-ticket dropshipping has advantages and disadvantages that determine how much dropshippers in this category earn on average.
For example, it takes fewer sales to make more money with medium-ticket dropshipping because the prices are average. Additionally, since medium-ticket products are a good balance between great value and a reasonable price for consumers, they offer better profit margins and attract the average spender.
Medium ticket dropshipping businesses are fairly common among dropshipping business owners with some experience building dropshipping stores. The average income of a medium-level dropshipping business is anywhere from $500-$2500 or more per month.
3: High-ticket dropshipping
High-ticket dropshipping involves dropshipping business owners selling higher ticket items that generate higher revenue. For example —although there’s no industry standard figure— high-ticket drop shipping items can cost anywhere from $100> to thousands of dollars.
Typically, because it’s a bit more involved than low-ticket dropshipping, how much high-ticket dropshippers make on average is usually higher. Because experienced dropshippers are the ones who own most high-ticket dropshipping stores, they can make an average of $1000-$10000+ per month.
Based on these three categories, we can notice that, on average, dropshippers can make:
- $500-2500 per month: By setting up a user-friendly and well-optimized eCommerce website/store, working with reliable suppliers, and running effective marketing campaigns, most dropshippers can average $500 or more per month. However, remember that it will be relatively easier for a high-ticket dropshipping business owner to generate an average of $500 per month from a few sales. On the other hand, it takes more sales for a middle or low-ticket dropshipper to generate the same average monthly income.
Irrespective of whether you’re doing low, medium, or high-ticket drop shipping, if you put in the work, you can average $0-$500+ in your first three months as a dropshipping business owner, but only if you keep experimenting, learning, and improving your strategies. Success in dropshipping boils down to knowledge.
- $2500-$5000 per month: On average, it’s easy for medium and high-ticket dropshippers to make an average of $5000 per month six months —or less— after establishing their stores. Likewise, a low-ticket dropshipping store can achieve the same, but as you can imagine, it would require more monthly sales to average the same revenue.
In most cases, dropshippers who make an average income of $5000 or more have been at it for a while —say six months or more—learned, experimented, and found some key products and strategies that work great for them.
As a beginner, depending on how hungry you are for a successful dropshipping business, you can get to this level in 3-24 months, depending on which products you dropship—whether low, medium, or high-ticket products— the size of your store, marketing strategies, etc.
- $5000-$10000 per month: It is easy for a high-ticket dropshipper to make an average of $10000 per month in the first few months of business. For example, a high-ticket dropshipper selling a product with a profit margin of $500 per sale only needs to make 200 sales per month to average $10000 per month. On the other hand, a low-ticket dropshipper earning $5 from each sale would need over 2000 sales to generate the same average income per month.
- $10000+: Whether low or high-ticket, all dropshippers can make $10000 or more on average per month —some dropshipping business owners even generate an average of $100000 per month from their businesses. However, as you can imagine, it will take fewer sales for a high-ticket dropshipping business to average that revenue and more sales for a low-ticket dropshipping business to maintain the same average earnings.
Often, dropshippers who make an average income of $10000 or more per month have a lot more experience than the average Joe and can create and optimize stores and marketing campaigns using various tools and approaches.
For example, at this level, dropshippers know how to use PPC ads effectively, do SEO for long-term business growth, use influencer marketing, cart abandonment tools, etc.
2: Niche and product
As you can tell from everything we have discussed, a drop shipper’s chosen niche and product can greatly determine how much revenue and income that dropshipper makes on average.
For example, winning products in popular niches like health and personal care, car accessories, urban wear, etc., are likely to perform well in the market —notwithstanding all other factors— because such products are evergreen and always in demand among a wide range of customers.
Thus, even a low-ticket dropshipping store dealing in these products can generally expect to make $500> on average, with the income increasing depending on factors like the product in question, dropshipping commission, supplier fees, effective marketing, etc.
3: The size/age of the store
The size of a dropshipping store is another key factor determining how much dropshippers make on average. A bigger store with more inventory will most likely sell more than a brand new store and therefore make more money on average.
Here, the average earnings worth noting are:
- Brand new stores: Most new dropshipping stores, whether low, medium, or high-ticket dropshipping stores, can make an average of $0-$1000 per month in the first three-twelve months. However, how much money new dropshippers make on average in the first few months of being in business depends on many other factors, the size of the store included.
- 3-6 months old stores: Dropshippers with 3-6 months old stores have sizeable stores because they have probably found a winning product —or several of them— and established a moderately-sized store that can generate $1000+ per month on average. At this level, the key determiner of how much a dropshipper makes on average is effective marketing campaigns and how knowledgeable a dropshipper is —more so how good a dropshipper is at experimenting to find different marketing strategies that work.
- 12+ months: A 12-month-old dropshipping store is relatively sizeable and can make $2500-$5000+ on average per month, provided the store owner has found multiple winning products, priced them appropriately, marketed them effectively, and created a winning brand strategy.
NOTE: The size of a dropshipping business does not necessarily have to depend on how long the store has been in operation. In the hands of an experienced dropshipper, even a new dropshipping store can have hundreds if not thousands of products, therefore generating higher income faster.
Additionally, these are not the only factors influencing how much dropshippers make on average. As mentioned, various other factors, like commission rates, the product in question, drop shipper’s experience, etc., all determine how much a dropshipper makes.
As you can see from this discussion, how much dropshippers make on average depends on various factors, mainly the dropshipping category, niche and product, and store size.
Key Tips to Keep in Mind to Improve How Much Dropshippers Make On Average
Based on all the factors we’ve discussed that influence how much a dropshippers makes on average, here are various tips dropshippers can use to maximize their average earnings:
- Your product pricing strategy: Use a pricing strategy that allows you to sell products at a profitable yet-customer friendly price. For low-ticket dropshipping, use the fixed percentage profit markup strategy and aim for products that give you a 300% profit margin.
Courtesy: dodropshipping
For medium and high-ticket dropshipping, use cost and value-based pricing, respectively. With value-based pricing, you price your product based on its perceived value —the higher the perceived value, the higher a price you can set. With cost-based pricing, your selling price and the profit markup factors in your expenses —marketing, dropshipping fees, free shipping, etc.
- Work with reliable suppliers: Whether you’re just starting your store or an established dropshipper, the suppliers you work with can significantly influence how much you make as a dropshipper. Work with various trusted and reliable dropshippers because a few winning products from trusted dropshippers can help you create a dropshipping business that averages a five-figure income each month.
In some instances, you will find a winning product but no reliable supplier for it on supplier platforms like AliExpress or Alibaba. In such instances, you can work with a professional dropshipping and fulfillment agent like Bestfulfill to source, inspect, warehouse, fulfill and process orders, manage inventory and provide 1-1 customer support.
- Product choice/niche: This boils down to choosing your category wisely and then optimizing your marketing strategy for it. For example, to generate more money with a low-ticket dropshipping store, a dropshipper must create highly effective, well-optimized marketing campaigns. To ace product choices and ensure that you get into the right niche, pursue the right products and therefore increase your chances of earning more from your dropshipping business, conduct thorough product and market research.
- Costs: Whether using the fixed percentage markup, cost, or value-based pricing, keep your costs in mind. Some key costs to keep in mind include per-order fees, shipping costs, advertising, etc. All these factors can eat into your profit margins, and you should keep them as low as possible —or ensure you use a pricing strategy that ensures you earn a worthwhile profit.
Dropshipping Business FAQ
Q1: How much profit can you make dropshipping?
How much profit you can make dropshipping varies, depending on factors like product, niche, store size —and all the other factors we discussed—, but using the fixed percentage profit markup strategy, the average profit per sale is 300%.
Q2: Can you get rich from dropshipping?
Yes, as shown by this list of the richest dropshippers, but getting rich from dropshipping takes a lot of work, experimentation —and the failures that come with experimenting— finding winning products, and tons of other business factors.
Q3: Is Dropshipping worth it?
Yes, dropshipping is worth it. Even low-ticket dropshipping is worth it because you can use it to create a business that makes $500 each month.
Q4: How much can you make from dropshipping?
How much you can make from dropshipping varies based on:
- Your level of expertise,
- Chosen product and niche
- Your costs
- Dropshipping commission
- Whether you’re doing low, medium, or high ticket dropshipping,
- The effectiveness of your marketing plan, campaigns, and the many other factors discussed in this blog.
Conclusion
How much dropshippers make on average varies depending on the various factors we’ve discussed.