Dropshipping Business

How Profitable Is A Dropshipping Business? (Updated for 2024)

Pat Walls

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Updated: September 6th, 2024

How Profitable Is A Dropshipping Business? (Updated for 2024)

So you want to start a dropshipping business?

And the first question that came to your mind was, “well, are dropshipping businesses actually profitable?”

With a market size of $2.72T - there’s plenty of business to go around.

Especially considering:

You could start a dropshipping business with as low as $200
Based on our data, dropshipping businesses generate an average of $5.44M per year
You could see gross margins as high as 70% with dropshipping businesses

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a dropshipping business.

Let’s dive in!

Is a dropshipping business profitable?

Yes, a dropshipping business is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $5.44M per year with an estimated gross margin of 35%, you could expect to recover your investment within 7 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your dropshipping business.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your dropshipping business is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a dropshipping business worth it?

If you’re wondering if a dropshipping business is worth it, the answer is a big YES. With dropshipping businesses, you have the potential to earn $5.44M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $2.72T, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a dropshipping business to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful dropshipping businesses case studies.

Examples Of Profitable Dropshipping Businesses

Here are a few examples of profitable dropshipping businesses, and a few more details about them:

1. Dropshipping.com ($120K/year)

Martin, co-founder of Dropshipping.com, came up with the idea while working on a simple directory for dropshipping products. With a million-dollar offer to sell the website even before it was fully developed, Martin realized the potential and decided to build something bigger. With a focus on providing value to online sellers and creating unique content, Dropshipping.com has seen impressive growth, attracting 40,000 organic traffic in just one year and generating $10k from brand and affiliate deals.

Is it profitable? Yes
How much money it makes: $120K/year
How much did it cost to start: $30K

How We Organically Grew Traffic From Zero To 40,000 Visitors In One Year [Dropshipping Resource]

Dropshipping.com is an all-in-one resource center for dropshippers, offering 2000+ vetted suppliers, 300K+ product ideas, hand-picked winning product ideas, 140+ downloadable premium guides, and more, with the website currently generating $10k on average from brand and affiliate deals and $7-8K monthly expenses.

Read this case study

Read by 3,718 founders

2. JetPrint ($8.4M/year)

Inspired by a childhood fascination with CMYK printing, Mark ventured into the print-on-demand industry in China after discovering Printful in 2015. Leveraging his software development background, he launched JetPrint, now generating $700,000 monthly and prominently featured on Shopify.

Is it profitable? Yes
What's the gross margin? 12%
How much money it makes: $8.4M/year
How much did it cost to start: $750K

How I Started A $8.4M/Year Print On Demand Company [From China]

JetPrint is a Chinese print-on-demand company that offers customizable products to global e-commerce sellers, with watches and balls being their featured products. In a short amount of time, they went from starting with a few thousand US dollars in monthly income to making $700,000, and their app was approved by Shopify and recommended in the Shopify App Store. They attribute their success to service quality, innovation, and accurate audience targeting.

Read this case study

Read by 2,012 founders

3. Importify ($900K/year)

Moshe Lugasi, founder of Importify, came up with the idea for his business while running his own online store on Shopify. Frustrated with the time-consuming process of adding products and fulfilling orders manually, he outsourced a developer to create an app that would automate the process. After launching the app, Importify quickly gained traction and became one of the first companies to offer this level of functionality, generating $128,000 in its first year and now grossing $60,000 a month.

Is it profitable? Yes
What's the gross margin? 70%
How much money it makes: $900K/year
How much did it cost to start: $10K

We Launched A $720K/Year Dropshipping App [With 7,500+ Customers]

How a video game industry sales manager turned his frustration with dropshipping into a $720k/year business, helping thousands of online storefronts automate their product import and dropshipping with app Importify.

Read this case study

Read by 5,401 founders

Learn more about starting a dropshipping business:

Where to start?

-> How much does it cost to start a dropshipping business?
-> Pros and cons of a dropshipping business

Need inspiration?

-> Other dropshipping business success stories
-> Marketing ideas for a dropshipping business
-> Dropshipping business names

Other resources

-> Dropshipping business tips

How much can you make with a dropshipping business?

With a dropshipping business, you can make an average of $5.44M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $200. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a dropshipping business make a week?

Based on our data, average weekly revenue for a dropshipping business ranges around $113K. As such, you could see monthly revenues of $453K.

To know if your dropshipping business achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your dropshipping business.

How much do dropshipping businesses owners make?

The income of a dropshipping business owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established dropshipping business is about $113K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a dropshipping business owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Dropshipping Business Profit Margins

Generally speaking, a dropshipping business can expect profit margin of around 35%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a dropshipping business, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, dropshipping business owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, dropshipping business owners can ensure long-term sustainability and profitability for their business.

Dropshipping business owner salary

The salary of a dropshipping business owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established dropshipping business, in a prime position, might see an average weekly salary around the ballpark of $39.6K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a dropshipping business may be a promising business to start - but the success of your dropshipping business mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable dropshipping business.

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Starting A Dropshipping Business: Everything You Need To Know

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