Every single year, we find countless people asking the same question, “is dropshipping profitable?”. We saw “is dropshipping profitable in 2021?”, we see now “is dropshipping profitable in 2022?”, and we will see “is dropshipping profitable in 2023?” next year.
The answer to this question is, was, and will be the SAME for years to come.
If you want to find out what it is, in full detail, then keep reading!
A Quick Overview of the Dropshipping Business Model
What exactly is the dropshipping business model? You’d be surprised by how many start doing dropshipping without even fully understanding what the business is.
In dropshipping, you are the middleman between your customers and suppliers. You connect suppliers and manufacturers of various products with people who want to buy them.
It’s as simple as that!
However, in order to achieve success in this, you need a few things first. Mainly, you will need to secure the following resources:
- Find a winning dropshipping product
- Connect with a reliable supplier
- Create your first Shopify dropshipping store
- Choose a platform to advertise your products on
- Scale your store
How Can I Confirm That Dropshipping Is Still Profitable in 2022?
You’re about to take part in a three-step process that clearly shows (with proof) how profitable dropshipping is, and will be in the future.
So, let’s answer the ultimate question, “is dropshipping profitable in 2022?”, with facts!
Step 1: Analyzing Dropshipping Popularity
You need one simple tool to determine the popularity or demand of anything today. It’s called Google Trends.
So, let’s see what it has to say about dropshipping.
All you need to know about how to use Google Trends, for now, is that the closer the blue line is to 100, the more popular and searched something is.
So, this is a search for the keyword “dropshipping” in a 12-month time frame. As you can see, throughout the past 12 months, dropshipping has been highly searched for every single month, with a slight dip in December.
Let’s look at a 5-year time frame. 👇
From what this chart tells us, dropshipping has been on the rise constantly in the past five years, with a few dips here and there. However, what’s important here is that the demand always surpassed the dip and grew higher.
With this chart, we can now calculate the rate of growth and determine how much it will grow in the future with decent accuracy.
DON’T MISS: How Much Does It Cost To Start Dropshipping In 2022?
Step 2: Analyzing Dropshipping Growth
According to this Statista research, the global dropshipping market was worth slightly less than $130 billion in 2020. With the current growth, experts predict the dropshipping industry to reach well over $450 billion by the time 2027 arrives.
With this in mind, how can anyone say that dropshipping is dead? How can anyone ask, “is dropshipping profitable in 2022?”.
Step 3: Analyzing Dropshipping Profitability
Finally, let’s have a look at an important analysis shared by Shopify for 2021. In 2021, Shopify’s revenue skyrocketed to $4.6 billion from $2.9 billion in 2020.
To clarify, this directly correlates to the total sum of all Shopify stores combined making $175 billion in sales just in 2021. Compared to all Shopify sales from 2020, this is a 47% increase.
Keep in mind, these numbers are just in regards to Shopify, as there are plenty of other Shopify alternatives for dropshipping that are making countless dropshippers money as well.
How to Make Dropshipping More Profitable?
There are three effective strategies any dropshipper can implement to increase their dropshipping profits.
- Reduce ad costs
- Increase dropshipping profit margins
- Find more affordable suppliers
Reduce Dropshipping Ad Costs
The cost of your ads can eat away quite a lot of your earnings. This will mostly hurt you in the beginning stages, while your ads are still learning and adapting.
In order to speed this up, you need to test and quickly find your dropshipping target audience. Doing so means that more of the people who see your ads will buy from your store.
In other words, you won’t be wasting ad money on people who aren’t even interested in what you’re selling.
Increase Dropshipping Profit Margins
By this, we generally mean to increase your product prices. But, in order to back this up, you can utilize branded dropshipping, a strategy that allows you to charge insane prices that are ridiculously higher than what it takes to manufacture your product.
A good rule of thumb here is to charge double or triple what your supplier charges for a product in the first place.
So, for example, if you pay your dropshipping supplier $10 for the product, it should be at least $30 on your online store. Otherwise, it’s just not worth all the trouble it takes to sell it.
Find Affordable Dropshipping Suppliers
If you don’t know by now, not all dropshipping suppliers charge the same prices for their products. Some suppliers have the exact same products while still charging different prices.
With this in mind, you should always compare suppliers. Never settle for the first one you find.
Use dropshipping.com’s free supplier directory to browse thousands of suppliers. You will find out all of their product prices and instantly compare them without having to waste time doing your own research.
Important Questions About Dropshipping Profitability – Answered
Here are several frequently asked questions about dropshipping profitability. This will allow you to finally clear your head and focus on actually starting and scaling a dropshipping business.
Is Dropshipping Saturated?
Yes, dropshipping may be saturated now more than it was a few years back. But you’re looking at this the wrong way. This is not an issue.
The fact that more people know about dropshipping and are starting dropshipping stores does not mean they will steal your business. In fact, the chance of success for total beginners who don’t know anything about dropshipping is extremely low.
With this in mind, you don’t really need to worry about this. So, get this saturation issue out of your head and focus on building your own dropshipping business.
According to Mark Mehling, a marketing strategist, and problem solver, Dropshipping is highly saturated:
This is a great old saying: “The market is never too saturated for someone to do it better. “
The biggest problem most people have when they consider a business using drop shipping? Believing this is a simple, guaranteed money business. It’s not. It requires all the same business skills, especially marketing, as any other business.
On another forum, I routinely find people with a drop ship company and no customers. Why? They don’t understand marketing and advertising. They assume people will just find them and buy from them. One person had gone 5 mo this without a sale. But he had no knowledge of his client avatar, what they needed to hear to act, didn’t use any SEO, and had a poor website if anyone did arrive.
Tesla arrived in a saturated market and is doing well with sales.
Do your research first to know what you need to do to differentiate from the competition. And how to get people to your site and close sales.
You will do great!!
What Are the Most Profitable Products to Dropship in 2022?
At any given time, there will always be various trending products that absolutely dominate the eCommerce market. It’s your job to quickly find these products and start selling them online.
Learn more: Dropshipping vs Ecommerce: What’s the Difference and Where to Start?
A few great examples that work currently include streetwear clothing, luxury clothing, unique gaming gadgets, makeup gadgets, and unique phone accessories.
In addition, this list of 19 amazing products to dropship in 2022 can get you started on the right track. However, you should always learn how to spot winning products and not have to rely on anyone else.
What Is the Average Dropshipping Profit?
When you ask yourself, “is dropshipping still profitable in 2022?”, you need to keep in mind that the average dropshipping profit is only between 15% to 20%.
For many people, this may seem quite low. However, it’s a global average that seems to work for suppliers, dropshippers, and customers.
Of course, some products feature profit margins of well over 50%. These are high-ticket products that are a bit more difficult to sell but are much more rewarding. Plus, you don’t need to sell hundreds of them to make a lot of money.
How to Calculate Dropshipping Profit?
In order to accurately calculate dropshipping profit, you need to subtract all of your business costs from your total revenue at the end of each month or year. The money that’s left to put into your pocket is the actual profit.
For example, if you make $10,000 in one month and spend $3000 on ads and $4000 on the actual product from your supplier with included shipping, you will only be left with $3000.
However, we’re not done yet. Then, you need to subtract the processing fees, Shopify fees, and other fees you may have gotten. At the end of all that, you’ll probably be left with around $2000 to keep for yourself.
That will be your dropshipping profit for that month!
How to Win in Dropshipping?
Being profitable is the ultimate goal when it comes to dropshipping. This is why so many people ask, “is dropshipping profitable in 2022?”.
With this in mind, here are a few tips to consider if you want a safe and risk-free journey toward dropshipping success and a life of financial freedom and travel.
Drop Your Ego And Start Learning
For those with huge egos, it’s almost impossible for them to start learning something from others because it means accepting that they really don’t know anything.
Whether you like it or not, learning is the first step toward achieving anything in life.
So the first step is to accept that you need to learn more about the business.
The second step is to find someone to learn from. At dropshipping.com, we offer countless free resources for you. Free supplier directories, free winning product suggestions, and free guides on just about any dropshipping topic your mind can think of.
And the third step is to think about your priorities. What’s more important to you, becoming financially free or going out and wasting time every single day? The answer to this question will determine your future.
Join Online Dropshipping Communities
One of the best dropshipping secrets I wish I knew in the early days was to join dropshipping communities full of real people who’ve actually done what you’re trying to accomplish now.
Can you imagine how valuable this actually is?
Think about it. You can become a part of Discord, Twitter, or Reddit communities that exclusively talk about dropshipping and nothing else. You can get instant answers to questions that you’d otherwise spend a whole day researching.
This is a powerful tool that you must take advantage of.
Is Dropshipping Still Profitable in 2022? – Final Answer
Yes, dropshipping is still profitable in 2022, just like it was in 2021, 2020, and a decade before that. You don’t even have to worry about this question when starting your dropshipping business.
If you fail on your first try, it doesn’t mean that dropshipping isn’t profitable. It only means that you have to try harder. Luckily, dropshipping.com is here to help guide you on your journey.