Dropshipping involves selling products online that you don’t need to stock yourself. Businesses work with a third party, such as a wholesaler or manufacturer, to fulfill orders before organizing eCommerce order processing at a fulfilment centre to store, package, and send goods to customers.
Knowing whether dropshipping suits your unique business model can be challenging, but the following statistics are worth keeping in mind before you make your decision.
Dropshippers Can Earn 50%+ More Profit Than Stock Holders
Storing stock can be expensive. If you don’t have a physical retail store to house your goods and enjoy walk-in customer sales, you must lease a warehouse or organize another storage facility.
Dropshipping businesses don’t have that problem. Instead, they can display pictures of their goods on their websites and work with a fulfillment center to house stock and manage orders. As a result, some surveyors have found that dropshippers can earn up to 50% more profit than people who have to stock their own inventory.
Around 27% of Online Retailers Are Dropshipping
Many businesses market and sell their goods from their websites as if they have them in stock, ready to send out to their customers. However, the truth is that nearly one-third of online businesses leave product stocking and sending in the capable hands of third parties.
Because these businesses can offer custom packaging with business branding, customers never have to know that the brand itself played no hand in getting the goods to their door.
The Dropshipping Industry Will Reach Over $476 Billion By 2026
Dropshipping offers many benefits, such as increased profit potential, more time, competitive shipping rates, and less stress. As more business owners have reaped those rewards, the dropshipping industry has grown in leaps and bounds. Statista estimates that dropshipping will grow to a $476.1 billion industry by 2026.
As the years pass, more customers will experience the speed, efficiency, and cost-effectiveness associated with this form of online shopping, which will only trigger more growth.
More Than 2.14 Billion People Now Shop Online
Not everyone feels like venturing out of their homes in search of goods and services. Instead, they want to browse for products from the comfort of their sofas and have them delivered to their doors.
Online shopping used to be a daunting prospect for many people, but technological advancements and the COVID-19 pandemic have inspired many people to get used to making purchases at the click of a mouse. According to Statista, there were over 2.14 billion people making purchases online.
Around 66% of Buyers Want Better Shipping Options
Shipping is the bane of any eCommerce business’s existence. Even when you can offer competitive product pricing due to minimal overheads, you have few options regarding affordable shipping. Thankfully, many fulfillment centers make shipping flexibility and affordability their priority.
As they work with many businesses simultaneously, they’re often able to negotiate cheaper rates with couriers and postal services, saving customers money. If you provide free or low-cost shipping, purchasers might be more likely to click that “checkout” button rather than abandoning their shopping cart like 70% of shoppers do.
Knowing if stocking or dropshipping is a more suitable model for your business is not always easy, especially when dropshipping means you have to give up control over shipping and handling. However, once you learn that it’s a growing industry that promises high profits, you might jump at the chance to explore this option for yourself.
