Can Dropshipping Make You Rich? (How Much You Can Earn And Which Products Are Best To Sell)

July 11, 2023

Can dropshipping make you rich? Yes and no. Generally, dropshipping business owners earn a profit margin of 20% to 30% from their sales. This can mean a monthly salary of $1,000 to $5,000 during your first year. Depending on the size of your business as well as the type and quantity of products you're selling, you can potentially boost your earnings by up to $100,000 per year. Meanwhile, there are also some dropshippers who have reached the big time after making millions in revenue. These include Andreas & Alexander, Harry Coleman, Alex Philip, Cole Turner, and Sarah & Audrey, among others.

Today, around 33% of online stores are dropshippers and about 23% of all online sales are through dropshipping. According to experts, the dropshipping market is expected to hit and surpass the $372 billion mark by 2025. That said, it should also be noted that statistics show that around 90% of dropshipping businesses fail during their first month.

So is dropshipping really the best way to make money online? With dropshipping, you’ll have to find winning products, sell them on your online store, and make sure you provide your customers with a positive overall experience.

Lead generation can be an alternative business model for those who want to earn passive income online. Unlike dropshipping, competition is not as tough with lead generation. Besides, you’re not competing with thousands of other dropshipping stores but are only going against 20 or 30 small businesses. Your goal is to reach the top search engine ranking for your locally-targeted keyword. As you achieve that, you can guarantee organic traffic and leads for their websites. Of course, this can result in consistent earnings for you and your clients.

How much money can you make from dropshipping?

Dropshippers can make a 20% to 30% profit from every sale. This can generally mean a monthly earning of anywhere from $1,000 to $5,000 within the first year, depending on the size of your business. In a Quora thread, published author Juan Pasalagua wrote that earnings usually depend on several factors, such as:

  • your niche
  • the products you sell
  • the volume of sales you generate
  • the profit margins you have

Meanwhile, online business owner Ori Firouz pointed out that dropshipping earnings usually depends “on the effort and ad investment that you do.” He also added a screenshot of his company's monthly sales, which amounts to over $691,000.

Can Shopify dropshipping make you rich?

Shopify dropshipping can make you rich, as seen in the experiences of the dropshipping millionaires we mention below. While using Shopify is not a guaranteed way to be wealthy, some users have proven that it is possible to earn 6 to 7 figures through dropshipping.

Besides, Shopify is a popular and trusted platform used by ecommerce merchants in more than 175 countries across the world. In addition, statistics tell us that Shopify stores have made a total of over $700 billion in sales over the past 17 years.

Who are the world’s richest dropshippers?

The world’s richest dropshippers are Andreas Koenig & Alexander Pecka, Harry Coleman, Alex Philip, Cole Turner, and Sarah & Audrey.

1. Andreas Koenig & Alexander Pecka

Andreas Koenig and Alexander Pecka began with the goal of earning $1,000 a day. Their dropshipping journey began in 2018 when they built their first online store on Shopify. They started selling toothpaste dispensers and then placed ads on Facebook.

Eventually, the partners established their own pet dropshipping store and began earning $500,000 per month. Now they’re already making over $10 million a year.

2. Harry Coleman

In 2008, Harry Coleman made $5 million from his three stores on Shopify. He initially invested $500 to $800 in advertising to get his first sale, but it all eventually paid off. Today, he shares his dropshipping knowledge through the Beast of Ecom YouTube channel where he has over 71,000 subscribers. In addition, he also offers the Ecom Beast 2.0 online course.

3. Alex Philip

Alex Philip made headlines after becoming one of the world’s youngest and most successful dropshippers. When he was 11, he began selling Pokemon toys on his Amazon store. By age 15, he made more than $2 million by sourcing Alibaba products and then selling them on Shopify.

“For an hour before school I’ll spend time looking at all the big Instagram pages to see if any products are popping out at me so that I can jump on,” Alex said in an interview with Forbes. “School takes up most of the next nine hours of my day, and I listen well in class to compensate for the time I have to work on my business.”

4. Cole Turner

Cole Turner first found out about dropshipping when he was 18 years old and he immediately jumped into running his own ecommerce business. Initially, he operated a general store and sold different products to a wide audience. He eventually moved to selling jewelry online and then scaled up his business by focusing on the niche and placing ads on Facebook. This move made him more than $75,000 in sales.

After only over a year, Cole has earned over $2.1 million worth of sales from March 2019 to May 2020.

5. Sarah and Audrey

French entrepreneurs Sarah, 25, and Audrey, 26, both had their own dropshipping businesses before deciding to band together in 2019. The two focused on boosting their brand through investing in product placements by working with Instagram influencers. As influencers helped promote their products online,

The strategy proved to be effective as they managed to earn more than $1 million in sales in a matter of weeks during the lockdowns. Today, Sarah and Audrey are known as the richest female dropshippers in the world.

How much do I need to start dropshipping?

You will need at least $100 to start a dropshipping business. As a business model, dropshipping has gained popularity because of its affordable startup costs. Business owners won’t have to spend on and store inventory to begin with.

To start your own dropshipping company, here are some steps and expenses you’ll need to make:

1. Researching suppliers and products to offer

Using Google can be a good way to find the best suppliers and winning product ideas for your online store. The best thing is you won't have to spend anything for this since researching online is free. As you compare your choices and read reviews, you can decide which options are most ideal. Eventually, you can invest on paid product research tools as you grow your dropship business.

2. Creating a logo

You can use free graphic design platforms to create your own logo and build your brand. Some of the best websites for logo creation are:

  • Adobe Express (a free logo maker you can use for “AI-generated quality logos that can be shared across all your printed and digital platforms.”)
  • Canva (a free graphic design platform, Canva allows you to make your own business logo in minutes using custom templates and its drag-and-drop tool.)
  • Hatchful (a free online logo maker from Shopify that offers hundreds of logo templates.)

As an alternative, those with extra budget can check out premium plans of these software or hire professional graphic designers for better results. 

3. Buying a domain name

Dropshippers can purchase a domain name for a cheap price. For example, Alibaba Cloud offers domain names for $10 per year. NameSilo sells $10.95 .com domain names while pricing starts at $10.99 per year.  These options can be ideal for those starting a dropshipping business for the first time.

4. Building your ecommerce store

You will need to sign up with established ecommerce platforms to build your business. For example, a basic Shopify membership costs $19 per month and is billed yearly. This plan includes an ecommerce website, blog, 24/7 support, manual order creation, marketing automation, and more.

Shopify also offers a free 14-day trial period for users who want to test the platform’s tools before making the purchase. So be sure to check out the free version to see if the software matches your business needs.

5. Marketing your business

Of course, you should also market your business to reach more of your target customers. You can advertise your dropshipping store by using pay-per-click platforms from Google Ads and Facebook Ads. Their PPC advertising options allow you to promote your brand among search engine and social media users. Depending on your budget, you can spend anywhere from $0.1 to $10 per click for your campaign. You can later increase your budget for ads as your business grows. 

Is dropshipping a good side hustle?

Dropshipping can be a good side hustle, depending on your niche, products, and skill set. Take note, however, that the dropshipping business model is definitely not a get-rich-quick scheme. While others have achieved significant success in the industry, it is also worth noting that many fail and those who excel had to invest a lot of work and time in the process.

In a Reddit thread, a user pointed out that it’s important to “find a really good product that’s not overly saturated… then have a demographic that product would certainly appeal to.”

What are the disadvantages of dropshipping?

The disadvantages of dropshipping include low-quality products, a highly competitive market, and low profit margins.

Low-quality products

Ensuring product quality can be a challenge in drop shipping. Since you can’t personally check each item you sell, receiving low quality items can lead to disappointment for some of your customers. So it’s definitely important to work with the right supplier. Read customer reviews to see which sources are best for your business.

Highly competitive market

Competition can be tough in dropshipping. As a new dropshipper, you’ll have a hard time competing because most ecommerce businesses are selling the same products. If you can find unique products and niches that are low in competition and high in profit margin, you’ll have higher chances of succeeding when you start a dropshipping business.

Low profit margins

As mentioned, dropshippers can earn a profit of 20% to 30% from each sale. This means your average dropshipping income will depend on the quantity of your regular sales. You'll have to work hard on marketing your business in order to boost your profits.

Related Articles on Dropshipping

Conclusion: What is more profitable than dropshippping?

Lead generation is more profitable than dropshipping. Compared with dropshipping, the lead generation business model is easier to learn and operate. You won’t have to hunt for winning products all the time or deal with customer complaints about delayed shipments and other concerns. In short, you don’t need to be available around the clock to respond to messages from your buyers.

With lead generation, your focus is ranking a business website to the top of search engine results. Achieving this allows you to deliver organic traffic for your clients, which then translates into leads and customers for their business.

Competition is also not as tough as competing with hundreds (or thousands) of dropshipping stores online. Besides, ranking an area-specific keyword usually means you only need to compete with 20 to 30 local businesses in lead generation.

Today, I earn $52,000 per month as I rent out lead generation websites to my clients. Obviously, this is significantly higher than the average revenue of those running online dropshipping businesses. If you’re aiming to find a profitable passive income source, lead generation is significantly a better choice than dropshipping businesses.

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Ippei Kanehara

$52K per month providing lead generation services to small businesses is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2024, is to build your own lead generation business.

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