The ultimate guide to dropshipping: what is it and is it worth it?

As a fast-growing ecommerce business model, dropshipping lets you ship items directly to customers once an order is placed. The logistics is handled by your chosen dropshipping supplier rather than having to keep stock in your warehouse.

We will give you a helping hand with our thorough guide into dropshipping. From understanding the benefits to how the process works and identifying the best dropshipping suppliers, you should feel more confident about becoming a dropshipper by the time you reach the bottom of this page.

What is dropshipping?

Dropshipping is a method of retail fulfilment for ecommerce businesses where a third-party manages the logistics of manufacturing, warehousing and shipping.

This order fulfilment option allows the business to outsource the whole ecommerce process from start to finish. For example, when a seller receives an order from a customer, they send it to another company who will then ship it to them. This allows people to start a business and sell products without the need to rent warehouse space or manage inventory. Many simply need a TikTok account to start dropshipping.

And don’t worry – dropshipping is completely legal in the UK and is treated like any other kind of ecommerce store. As long you’re abiding by all applicable sales and consumer protection laws, you’re good to go.

A great example of dropshipping is Gymshark. Instead of keeping mountains of products stored in a warehouse, items are directly shipped to customers by a supplier when an order is made.

How does dropshipping work?

As mentioned above, dropshipping is product shipping service from you to your customers. The process is fairly straightforward and goes as follows:

1. You create an online storefront with products you wish to sell.
2. When you receive an order, the supplier is contacted by you or automation software.
3. The supplier packs and ships the products directly to your customer.
4. You profit the difference.

You need to create an online store to start dropshipping

Shopify is our #1 pick of online store builder if you want to start a dropshipping business

Visit Shopify Dropshipping Get started for free

Ecommerce platforms for dropshipping

Before committing to one of the dropshipping services above, it’s important you first choose which ecommerce platform you’ll use to build your dropshipping store. This way, you can ensure your platform is compatible with the dropshipping app you choose.

There are also other factors to add to the equation, such as budget constraints and how much experience you have with web-building products.

You can also use social media platforms like TikTok or Instagram for dropshipping. This will give you access to an instant, ready-made audience to sell your products and is a powerful channel to sell through when used in conjunction with your website.

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Dropshipping apps and services

You can start a store for almost anything you can think of these days, from phone cases to partyware – there are suppliers for everything.

Once you’ve decided on what you want to sell, you can start shopping around for dropshipping suppliers. We’ve collated a few below, and some are recommended based on the specific website platform you’re using.

Do dropshippers really make money?

There’s no doubt that dropshippers globally are making money. Whether or not the average Joe is one of them, however, is a different matter.

Dropshipping can be incredibly lucrative and successful, but it is a highly competitive market and only the best seem to reap any real benefits. According to Shopify, only between 10% and 20% of dropshipping businesses actually succeed.

A lot of your success will depend on scale and time. Scaling takes a keen eye to know what products will be profitable and potentially push them further with advertising, as well as making sure your supplier can actually deal with larger demands and orders in the case of a particularly popular product.

Significant time is needed to build a brand around what you sell in order to build trust and familiarity. This ensures that customers have loyalty to your store over the thousands of other dropshipping stores out there.

A lot of people go into dropshipping thinking it will be a ‘get rich quick’ scheme and don’t put enough effort into these two crucial aspects. The industry is certainly not without its fair share of failures.

What profits can dropshippers make?

According to data by Oberlo, the global dropshipping market in 2024 is valued at $351.8bn – up 23.6% compared to the previous year. The sector is projected to reach $435bn in 2025.

There’s no limit on how much money you can earn this way. People like Irwin Dominguez from San Diego prove this – he is a fast growing and high-earning dropshipper who made $1,000,000 in profit within eight months.

The niche you choose has an impact as some products are much more profitable than others. The most crowded and profitable niches are in the gadgets, devices and accessories niche according to Alidropship, with 18.5% of all dropshippers catering to the high demand for new trending technology.

A higher price point decreases the amount you’d have to sell, and that would also have an impact in gaining more profit.

Here is an example of the type of profit you could make. If you sold 25 phone cases a month at £80 and deducted the supplier’s wholesale price of £20, that would put you in the market of the average dropshipper’s profit range – a potential earning of £18,000 in a year.

You can make a rough estimate based on a 20% margin and 2% conversion rate, but you need to factor into your profit calculation that your discount from wholesalers might be less than 20%.

Can you lose money by being a dropshipper?

If you don’t prepare your dropshipping journey with as much knowledge as you can, you will almost certainly lose money. As mentioned above, a common mistake most new dropshippers make is failing to choose a good niche.

Another way you might lose money is by purchasing your own products at least once to test quality and how fast they are delivered to ensure that your supplier is reliable.

You may also need to verify your business with your online banking providers before any influxes of huge profits lead to your account being flagged for suspicious activity.

How can you be successful at dropshipping?

With the right drive, mindset and tools at your disposal, you can potentially succeed with any new business, and dropshipping can absolutely be one of those pathways.

However, you will need to consider if you are truly passionate about the time and effort it will take to build this business type.

The biggest hurdle – as reported by 84% of ecommerce retailers – is finding and securing a good supplier to get their business going.

Once you’ve overcome that, you’ll need to actually launch your brand new online store, your chosen range of products, and ideally have the beginnings of an incredible brand.

The great part about dropshipping is that it’s a pretty sturdy business model during a recession. Because of the low upfront costs, you have enough to keep you afloat as soaring inflation and costs make life hard for other types of businesses.

How much work is dropshipping?

Depending on the levels of success you want to reach, the level of work, time and expertise will be different.

• If you’re looking for your dropshipping venture to be a small side hustle on your lunch breaks or after work most days, it can be a good source of extra income. However, doing it this way has a greater risk of failure due to all businesses needing strong commitment to them – especially in the beginning stages, and this leaves you with more lost costs than earnings.
• If you want a breakout brand that reaches high numbers, it is going to take a lot of work – it isn’t something you should begin lightly.

While you don’t have to keep stock, dropshipping still has all the other needs of a business – and unless you have enough money to hire a team to help you, it will involve you being the driving force behind everything including content, promotion, brand strategy, budgeting and operations.

How long might it take to start making money?

According to Shopify, it takes about a year on average to build a dropshipping business that generates an average full-time income – but for some people, it can take as little as a few weeks. This often depends on how much they knew of the industry and the size of any audience they had beforehand.

But no matter what, ensure that you give yourself a grace period before celebrating too hard and spending all your profits. As with most businesses, there will always be some people who want to return items, and these requests will often have to be resolved and come out of your profits.

Beware of relying too much on your profits if they do well in the future too, because online sales are largely inconsistent and hard to rely on as a sole source of income.

Dropshipping alternatives

Whether it’s because you think the dropshipping market is saturated or you think it’d be too logistically complicated for you to ace, here are a few dropshipping alternatives to try:

Print on demand (POD)

This is a fulfilment model that lets sellers design graphics for products. Once you receive an order, all you have to do is tell the manufacturer what to print on the product (t-shirts, mugs, tote bags – you get the idea) to then ship it to the customer. This is easier to set up than traditional dropshipping and there’s just few upkeep costs, mostly because the products you print on can be pretty cheap.

Pro: you have creative control over the designs
Con: you can’t check the physical product before its sent to the customer

White labelling

This model allows you to sell product markers with your company’s brand. This can be done by putting your company’s logo on the product and packaging. White label products are generic products manufactured by a supplier that are rebranded for multiple brands. In this case, the competition will be less of a worry since no one will sell the exact same product.

Pro: you can create a easily but your branding on a product
Con: the products are generic so you won’t have a unique selling point

Drop servicing

This is an online business model that involves selling a service to a client and then hiring someone else to do it for cheaper so that you can make a profit. This can be anything from designing logos to doing an SEO analysis of someone’s ecommerce store.

Pro: if you’re organised and have lots of contacts, it can be a simple way to make money
Con: hiring someone else to fulfil the service means there is more room for error or setbacks

Final thoughts: Is dropshipping worth it?

There are positives and negatives to consider when starting a career in dropshipping. The most prevalent positive is that there is really no upper limit to the potential profit you can make – but the most notable negative is that it takes more work and effort than most people imagine, especially when first starting out.

Throughout this article, we discussed how dropshipping works, the best platforms for dropshipping, the type of money you could stand to lose or gain, and whether or not all of it is worth it.

Overall, by having a strong awareness of what you’re about to get into, understanding the strengths and weaknesses of the business model and knowing that it is not a ‘get rich quick’ scheme, anyone could achieve a viable dropshipping business with some hard work and dedication.