How Many Dropshipping Businesses Are There?

Dropshipping is one of the most popular ways of making money online so there are clearly a plethora of dropshipping stores online. I have been doing dropshipping myself since 2016 but I was curious myself as to how prevalent dropshipping is so I decided to do a little bit of research and find out.

To be clear, I have no idea how accurate the statistics online actually are. However, I only got statistics from reliable and credible sources so the information could be as accurate as possible.

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How Many Dropshipping Stores Are There in the World?

According to Wikipedia and many other sources, there are estimated to be between 12 and 24 million e-commerce stores online. Of those e-commerce stores, approximately 27% use dropshipping as part of their business. So how many dropshipping businesses are there?

There are between 3.2 and 6.4 million e-commerce businesses that fulfill orders using the dropshipping business model. The dropshipping market was valued at USD $225 million in 2022 and is expected a growth rate of 23.4% from 2023 to 2030. Source Grand View Research.

Whilst this does not mean dropshipping is necessarily the primary method of order fulfillment for each store, it means dropshipping was utilized in some way for these stores. Many e-commerce businesses will do a combination of manual fulfillment and dropshipping of other items.

A thing to consider with most dropshipping businesses is they often start off dropshipping and eventually transition into a conventional e-commerce store that purchases in bulk and holds their own goods.

This is why the number of dropshipping stores is forever changing. Whilst there are countless new dropshipping stores opening daily, they either fail and close down or succeed and pivot in their business strategy.

According to Statista, the majority of e-commerce stores still manually fulfill orders themselves. This means they pick, pack and ship their own goods to customers as opposed to the dropshipping model where a third-party supplier manages the supply chain operations of the business.

How Many Shopify Stores Are There?

There are 3.76 million websites using Shopify to run their store. Almost 70% of the Shopify stores are registered in the United States.

Shopify does not disclose how many of their users are dropshipping but if we use the statistic that 27% of online stores are dropshipping, that equates to 1,015,200 stores are dropshipping on Shopify.

This is not a huge surprise as most beginners to dropshipping use the Shopify platform to get started. Shopify is easy to use, has several great free themes and is affordable to get started.

According to Shopify, their monthly recurring revenue increased to USD $139 million, 30% higher than the previous year due to pricing increases.

How Many Dropshippers Are in the World?

You may assume the number of dropshippers is the same as the number of businesses that dropship, however, the number is much lower.

Merchants who have found the secret to success in dropshipping are not satisfied with running a single store, and rightly so. They realize the process is replicable and often run multiple stores simultaneously or sell the stores once they’re established.

Whilst a lot of merchants only have a single dropshipping store, many have 5, 10, 20 or more. Let’s assume there are an average of 3 dropshipping stores per dropshipper, which equates to around 340,000 dropshippers worldwide. That may be a conservative estimate.

Below is the search term “Dropshipping” according to Google Trends over the past 5 years from a worldwide audience. The demand for dropshipping is steadily growing and you can only expect the number of dropshippers to increase worldwide.

How Many Dropshipping Businesses Fail?

According to Shopify, 10% to 20% of dropshipping stores succeed, which means 80% to 90% of dropshipping stores fail. A failure rate this high is not totally surprising considering the amount of competition in the dropshipping space.

The failure rate for dropshipping would be considerably lower if only experienced and knowledgeable online retailers were building dropshipping businesses. The problem is the barrier to entry for dropshipping is extremely low meaning most people who fail at dropshipping are beginners who don’t really understand what it takes to succeed yet.

There are many components to a dropshipping store and often not getting one or two of these components wrong can be the difference between success and failure. The problem is beginners often can’t identify where they went right and where they went wrong and therefore cannot fix the problem.

You can choose the best product to sell, a professional Shopify store, a compelling offer and persuasive copywriting, however, if you’re ad creative isn’t right you will fail.

Don’t be disheartened by the high failure rate of dropshipping, failure is a pre-requisite to success for most successful dropshippers.

How Many Dropshipping Millionaires Are There?

The amount of dropshipping businesses making millions of dollars per year is very small. There is a very simple reason for this. The profit margins in dropshipping are not typically high, usually between 10% to 30%.

It simply does not make sense to scale a dropshipping business when the margins are relatively low. It makes far more sense to use dropshipping for proof of concept before purchasing the products in bulk at wholesale rates before scaling a business.

Dropshipping is the perfect business model for low to medium sales volume. However, once a product or niche has been validated, e-commerce experts realize they need to transition their business to maximize profit margins.

For this reason, there are very few dropshipping millionaires as they’ve pivoted in their overall e-commerce strategy.

A good example of this is GymShark. They were initially dropshipping many of their products at relatively low-profit margins. Eventually, they transitioned from this strategy to manufacturing their own products.

The CEO of Gymshark Ben Francis is now worth over a billion dollars. Does this make Ben Francis a dropshipping millionaire or billionaire, I’ll let you decide.

Conclusion

There you have it, the dropshipping industry is clearly booming without any evidence that it’s slowing down.

Whilst many people online claim dropshipping is a fad and nobody really makes money, this data shows that online retailers who use dropshipping effectively can still make money.

If you’re making money in dropshipping, I’d love to hear about your experience so feel free to reach out to me.