How Much Can You Really Make With Dropshipping?

Is Dropshipping Still Profitable? Let’s Break Down the Reality Behind the Hype

YouTube is filled with “dropshipping millionaires” showing off luxurious lifestyles and encouraging viewers to start their own dropshipping businesses. But there’s also a lot of talk from others saying dropshipping is dead and not worth the effort. So, which is it? Let’s dive in and find out if you can still make money with dropshipping.

Is Making Money with Dropshipping as Easy as It Seems?

Once you watch a few dropshipping videos, YouTube will flood you with “dropshipping guru” content—young people claiming millionaire status from dropshipping and eager to teach you how to do it, too.

Their flashy titles and luxurious images can make it seem like everyone’s getting rich through dropshipping. However, it’s worth noting that these “gurus” likely make most of their money from selling courses, ads, sponsorships, and affiliate deals—not dropshipping itself. They paint an idealized picture, which can be inspiring but also misleading.

Let’s look at the real challenges that are often downplayed.

Key Challenges in Dropshipping

1. Intense Competition

Since dropshipping has a low barrier to entry, anyone can start. This creates a highly competitive market where you may be up against hundreds or thousands of stores selling the same products. Dropshipping “gurus” often keep their stores private to avoid competition copying their products.

2. Low Profit Margins

E-commerce has modest profit margins, typically 10-30%. Dropshipping margins are often even slimmer due to competitive pricing and high return rates (17.6% on average in 2023). Additionally, rising ad costs make it harder to stay profitable, leading many to drop prices to compete, which can result in very little profit.

2. Slow Shipping Times

AliExpress, a popular dropshipping platform, usually takes 15-45 business days to deliver, which doesn’t meet most customers’ expectations. Ideally, you want faster shipping by using suppliers closer to your target market, such as Zendrop for U.S.-based suppliers.

3. Lack of Control Over Quality and Service

Since you don’t handle the products directly, you rely on suppliers for quality and timely shipping. If they mess up, your brand’s reputation suffers, which can make it hard to build a loyal customer base.

4. Unpredictable Factors

Dropshipping is inherently unpredictable. Your best-selling product might stop selling, ads might become too expensive, or your account could get banned from social platforms. Suppliers can be unreliable, and payment processors might blacklist you due to issues with your supplier.

So, Is Dropshipping Really “Dead”?

People have been claiming dropshipping is dead since at least 2017. However, the e-commerce industry continues to grow, and dropshipping remains a significant fulfillment model. What doesn’t work anymore is quickly setting up a generic store and hoping to make easy money with basic ads.

Consumers are more aware, ad costs are higher, and the competition is tougher. But, with the right approach, dropshipping can still be profitable. Here’s how.

How to Make Money with Dropshipping

Lose the “Get Rich Quick” Mentality

Dropshipping is not a quick-money scheme. Many people quit because they expect easy success. It’s essential to approach this with realistic, long-term goals.

Create a Long-Term Business Plan

Think of your business in phases. Start with dropshipping to minimize risk, then transition to white label products to control logistics, and eventually to private label products to offer unique items and build a real brand. This evolution might take years, but it can make your business much more valuable.

Learn to Create Unique Offers

Anyone can sell generic products. To stand out, create enticing offers. For example, if you’re selling a fitness product, bundle it with digital workout guides or tutorial videos. This added value allows you to charge higher prices than competitors.

Use a Cart Funnel for Better Conversions

Too many product options can overwhelm customers. Focus on a “cart funnel” for your best product, guiding customers through a straightforward buying process. This method can improve conversions and lower ad costs.

Incorporate Digital Products

Digital products, such as e-books or video guides, can increase your average order value and profit margin. For instance, if you sell outdoor gear, offer a $7 beginner hiking guide and cross-sell related products like shoes and backpacks.

Leverage Email Marketing

Use email to build a relationship with your customers. Send regular newsletters with valuable content and offers. Email marketing is a powerful tool for increasing customer lifetime value.

Build Organic Traffic Sources

Don’t rely solely on paid ads. Grow a social media following or start a YouTube or TikTok channel related to your niche. This organic traffic can reduce your dependency on ads and make your business more resilient.

What Kind of Income Can You Expect?

There’s no set amount, but some dropshipping stores generate millions in revenue. With a profit margin of around 10%, a store earning $1,000,000 in annual revenue could see $100,000 in profit. Monthly earnings can vary, so it’s more realistic to focus on annual profit rather than monthly income.

Start Your Dropshipping Business with ClickFunnels + Zendrop

Our software, ClickFunnels, has everything you need to start and grow an online store. Plus, our partnership with Zendrop makes it easy to find U.S.-based suppliers for faster shipping.

We’re offering a free 14-day trial, so give ClickFunnels a try and see if it’s right for your e-commerce journey!

Dropshipping can be profitable with the right mindset and strategy. It’s not a get-rich-quick scheme, but with a well-planned approach, you can build a sustainable and profitable e-commerce business.

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