Average dropshipping income (2025): Myths vs reality
The average dropshipping income is one of the biggest internet myths, fueled by many influencers and online entrepreneurs promising an easy pathway to reach a seven-figure income through dropshipping. The reality? It is not as easy as it sounds.
Although dropshipping is not a get-rich-quick scheme, as most self-claimed online gurus suggest, it is still a lucrative business when done right. According to Grand View Research, the global dropshipping market is expected to reach almost $500 billion by 2026. This means that it is possible to turn dropshipping into a stable source of income.
In this article, we will answer some of the most-asked questions related to average dropshipping income, tips to maximize your dropshipping profit margin, as well as a real-life case study of a successful dropshipping business.
Dropshipping profitability: how much you can expect to make
When it comes to average dropshipping income, not all dropshippers earn the same. With increasing competition and economic uncertainty, margins are getting tighter, making dropshipping income vary widely.
Based on public sources from merchants' discussions on Reddit, as well as Shopify interviews with successful dropshippers, here is an overview of the average monthly income of a dropshipping business based on experience level. Keep in mind that these data will be for reference only.
Experience level | Typical monthly income (USD) | Insights |
|---|---|---|
Beginner | Negative to $3,000 |
|
Intermediate | $3,000 to $10,000 |
|
Advanced | $10,000 to above $50,000 |
|
Dropshipping income is also affected by several factors, such as:
Product niche: In theory, successful dropshipping products share three key traits: low competition, distinctive appeal, and consistent demand. They also need to deliver stable profit margins that make your business sustainable. Most products will be divided into high-ticket products and low-ticket products.
Pricing strategies: Your pricing strategies are the key consideration for your potential customers. You need a competitive price that guarantees your profit, aligns with competitors, and matches customer demand. The best way to increase your margin is to lower your per-item cost. This can be achieved by getting more orders to negotiate better prices with suppliers, or providing more value to your customers through volume discounts and upselling techniques.
Your capital: Dropshipping doesn’t require much money to start, but having more capital gives you a strong competitive advantage. With a bigger budget, you can invest more in ads, cover any incurring costs, and even scale faster when something starts to work.
Supplier quality: Since you don’t own any inventory, the quality of your supplier can define your dropshipping income. A reliable dropshipping supplier will make sure your products are well-made and shipped on time, keeping customers happy and increasing customer retention.
Customer service: Excellent customer service increases the chance of repeat purchases and positive word-of-mouth, which directly has an impact on your dropshipping profit margin.
Store design and brand reputation: Your store’s look-and-feel is crucial to increasing your dropshipping income. A premium-looking website elevates your products' perceived value, which allows you to set a higher price and increase profit margin.
The difference between revenue and net profit in dropshipping
Most dropshipping experts on the Internet only mention their total sales and orders. In reality, your real dropshipping income is from net profit, which is the amount of money after deducting all the expenses to get the sales.
This is why some merchants generate thousands in revenue but walk away with only a few hundred dollars, or sometimes nothing at all.
Let’s look at some of the differences between revenue and net profit:
Revenue | Net profit | |
|---|---|---|
What it means | Total money earned from sales before subtracting any costs | Money left after subtracting all costs and expenses |
Formula | Price × Quantity sold | Revenue – All costs |
Example | 100 orders × $20 per order = $2,000 in sales | $2,000 in sales – $1,500 in expenses = $500 net profit |
What it tells you | How much money your business brings in | How much you actually keep |
In one month, you sold 200 items, which means that you earned $3,000 in revenue ($15 x 200 items). Your cost of goods sold is $1,600 ($8 x 200 items). You also get taxed $150. Therefore, your net profit is $1,231 ($3,000 - $1,600 - $150 - $19).
You can see that the net profit has been significantly lower compared to the revenue, although the profit margin of 41% ($1,231/$3,000) is still considered healthy.
The costs will vary based on different dropshipping businesses, so take your expenses into consideration before diving deeper.
How long does it take to earn consistent dropshipping income?
Despite how eager you are to turn dropshipping into a stable source of income, everything takes time.
Before you set your expectations, it’s important to understand what can influence how long it takes to reach a steady dropshipping income, such as:
Domain knowledge: If you have expertise in a specific industry, you’re already ahead of the game. You deeply understand what your customers’ pain points are, which translates to better product choice and more persuasive marketing materials. This is why we often advise beginners to start dropshipping in an industry they are genuinely interested in to speed up the time it takes to reach profitability.
Competition: The more crowded your market, the longer it takes to gain traction. More competitors mean more price wars and thinner margins, making consistent income harder to achieve. Starting in a less saturated niche helps you stand out faster. However, profitable products attract copycats. If you're not regularly updating your products, you will waste your money promoting items that have already lost their appeal.
Budget: A bigger budget helps you get ahead faster. Think about spending more money on ads and hiring influencers to promote your products, which will drive traffic to your store quickly. However, if you’ve got a smaller budget, you’ll need to rely on free traffic, which takes more time to accumulate momentum.
Is dropshipping income enough to go full-time?
Dropshipping is beyond a get-rich-quick scheme that dropshipping gurus often talk about. If you think about it, dropshipping is actually a type of fulfillment process where the merchant markets and sells products, but the supplier holds the inventory and ships orders directly to customers.
That said, dropshipping can fall short when compared to a traditional 9-to-5 job in terms of stability, especially during the early days. While a full-time job provides consistent paychecks and benefits, dropshipping income can fluctuate from month to month.
Dropshipping, like any business, requires dedication and discipline to scale into a full-time operation. If you decide to turn dropshipping into a career, here are some best practices to set yourself up for long-term success:
Start small and scale up: Before pouring thousands of dollars, test different products to find which one has the best potential. Spend some dollars running ads to gauge the demand. Take advantage of the free trials offered by Shopify and dropshipping apps. Only scale up your spending when you have real data showing what works.
Master your marketing: Marketing is the backbone of any business, not just dropshipping. Most people often see marketing as just running ads, posting on social media, or optimizing for SEO. But it goes much deeper than that. When you learn how customers think, you can use marketing psychology to grab attention and design a customer funnel that converts browsers into buyers.
Mindset and consistency: The most important factor when you set up for a dropshipping career. While dropshipping requires little cost to get started, be prepared when things get tough. After all, success comes from staying committed when sales are slow, ads that don't convert, and lessons learned the hard way, even when results aren't immediate.
4 tips to maximize average dropshipping income
Increasing your average dropshipping income really comes down to applying the right strategies consistently.
Here are four proven tips to maximize your average dropshipping income and accelerate your path to profitability:
Reduce unnecessary costs
Although you need to spend money, there are dropshipping costs and fees that are more important than others. That said, prioritize expenses that contribute greatly to your monthly dropshipping revenue.
To identify your cost structure, list all your expenses, then categorize them as either fixed or variable, as well as direct or overhead. Now, you should be able to identify which costs take up a greater proportion of your spending. From there, you can trim unnecessary expenses and redirect those budgets toward what grows your average dropshipping income. For instance, better products, smarter ads, or improved supplier relationships.
Increase average order value (AOV)
Average order value, or AOV, is an indicator that represents the average amount of money a customer spends per order in your store. Increasing AOV means higher revenue for your store.
The most popular way many dropshippers often choose is to use quantity discounts. You can offer a better price per unit if customers purchase in bulk. Some merchants even go above and beyond by offering free gifts at specific quantities, encouraging larger purchases while keeping margins healthy.
Free shipping bar is another effective way to increase average order value. According to the PRN survey, 82% of shoppers would rather get free shipping over expedited shipping. That said, people will add more to their cart purposely to reach this threshold.
Product bundling is another smart strategy to boost AOV. Instead of selling items individually, group complementary products together at a slightly discounted price. Customers feel they're getting a deal, and you sell more items per order. Just keep in mind that this strategy works best when the products come from the same supplier.
Explore new markets
The next way to maximize your dropshipping profit is to explore new markets, given that you have established yourself in a prior market.
As you go along, you will make a name for yourself in your chosen industry within a specific market. When all the processes are in place, it is logical to think about expanding to new markets.
Start with a few products to see how your sales fare. If there are early positive results, you can gradually add more products and see how they perform. A good approach is to enter a market that is similar to your current one. For instance, if your current market is the US, it makes more sense to target Canada or the UK, since their shopping behaviour may overlap, and shipping will be much easier.
From zero to profit: A real dropshipper’s success case study
Tze Hing Chan’s Subtle Asian Treats is one of the most popular dropshipping case studies using Shopify.
During the COVID-19 pandemic, Tze saw a rising trend of bubble tea within the Asian American community. Without hesitation, he put together a bubble tea-themed store with the phone cases as the main items.
Initially, he made a couple of sales, but still lost money after accounting for ad spend. He then moved on to kitchenware and martial arts apparel, learning lots of valuable lessons along the way. In the end, Tze found his success in dropshipping plush toys, with boba tea plushies as the winning products.
The number speaks for itself. After sales declined due to the emergence of competitors, Tze had a profitable two-month run of monopoly sales for this product. In those two months, his store generated a total revenue of $100,000. Out of that, he spent $31,000 on advertising and $48,000 on goods and shipping. In the end, he earned approximately $19,000 in profit, resulting in an average profit of $24.57 per transaction.
The success formula behind the store
Tze firmly believes that his store succeeded because he knew his ideal target audience. Since his customers are often impulsive buyers, a winning product has to be cute and personally appeal to customers in some way, such as culture.
Tze also credits his storefront and customer interaction to be reasons why his dropshipping business is a success. As for his online store, He made sure his customers get the look and feel exactly like professional stores such as Nike and Adidas. Additionally, Tze was also transparent with shipping information and where his products were from.
But it is the “three for the price of two” bundle that doubled his AOV and changed the game. Tze knew that every click from his ad cost money, so he wanted visitors to spend as much as possible when landing on his site. And all it costs is a little extra fulfillment time.
Increasing dropshipping income with Qikify Quantity Discounts
Throughout this guide, we've explored realistic average dropshipping income expectations and actionable tactics to grow your earnings. Now it's time to put one of the most effective strategies into action.
With Qikify Quantity Discounts, you can now effortlessly implement one of the most effective AOV-boosting strategies: bundling using volume discounts.
Set up tiered pricing in minutes, offer "buy more, save more" deals, or add free gifts at specific thresholds, all without touching a line of code. The app integrates seamlessly with your Shopify store and works responsively across all devices, making sure your promotions look professional and convert consistently.
FAQs
Harry Nguyen
Digital Marketing Specialist at Qikify
Hi, I’m Harry, your friendly neighborhood marketer at Qikify. I am all about providing E-commerce merchants like you with the best insights and industry tips to help you grow your online stores and drive more sales.
Out of office, I like working out at a gym and learning about all things E-commerce and Marketing.
Feel free to reach out to me on LinkedIn. I’m always up for a coffee chat with other marketing folks and store owners to exchange ideas and explore potential collaborations.
TABLE OF CONTENT
- Dropshipping profitability: how much you can expect to make
- The difference between revenue and net profit in dropshipping
- How long does it take to earn consistent dropshipping income?
- Is dropshipping income enough to go full-time?
- 4 tips to maximize average dropshipping income
- From zero to profit: A real dropshipper’s success case study
- Increasing dropshipping income with Qikify Quantity Discounts
- FAQs
