How Much Do Shopify Dropshippers Make?

Last updated on June 3, 2024 5 mins read

Two years ago, ecommerce entrepreneur Sharif Mohsin created a brand-new Shopify store with only $100. Mohsin, who had made 7 figures from dropshipping, wanted to see how much he could make if he was starting afresh as a Shopify dropshipper.

Without relying on his previous relationships with suppliers or knowledge of winning products, Mohsin started a Shopify store. He designed the brand himself, and signed up for the thirty-day free plan. He found a mini portable speaker selling for $38 on Amazon and listed it in the new Shopify store.

To grow the store’s visibility, he recorded several TikTok videos and shared them on TikTok. At the end of the experiment, and having started out with a budget of $100, he’d made three sales and only $119.97.

average dropshipping income

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The experiment showed that dropshipping isn’t a get-rich quick scheme as some experts paint it to be. Users liked the idea, with one commenting, “I really like the idea that you…made it as realistic as what others would really expect”.

On average, dropshippers make $1000 to $3000 monthly in their first year. As with any other business venture, income would vary based on the seller, the product, the buyers, and other factors.

In this article, we’d review the average dropshipping income and factors that can affect dropshipping profits. Let’s get into it.

How Much Do Dropshipping Stores Make

Shopify dropshippers make as much as $500k every year, but this doesn’t happen to everyone. Beginners may find themselves oscillating between $500 and $2000 monthly for their first six to twelve months. This is because dropshipping success needs expertise and quality relationships with suppliers and buyers.

What’s the Average Dropshipping Income?

A realistic average dropshipping income will be around $1000 – $2000 per month. However, this figure is the total revenue, and not the total profits.

You have probably seen dropshipping gurus post screenshots of revenues in 6 and 7 figures. Those are often misleading because scaling as a dropshipper will take a lot of time and patience, and because your profit margins will be around 20 – 30% per sale.

Another thing to note is that only one in ten new dropshipping stores achieve success in their first year. So a beginner’s experience with Shopify dropshipper will differ from the experience of veterans like Sharif Mohsin or Cole Turner.

You can earn up to $5000 monthly if you grow your dropshipping business by figuring out how to source the right products.

What are the Costs of Dropshipping?

Dropshippers keep a fraction of their store revenue. The rest of the fund covers the following costs:

  • Product and Shipping Costs: Even though you don’t hold inventory, you still need to purchase products from your supplier and cover shipping costs. You can source these products from Ebay, Amazon, or Alibaba. These costs vary based on the type and quality of products, as well as the shipping methods used.
  • Platform and Payment Fees: Growing your dropshipping store on Shopify means paying for monthly subscription fees. Shopify charges $29 every month for their basic starter plan. Additionally, payment gateways such as PayPal and Stripe charge transaction fees for processing payments. These fees can add up, especially as your sales volume increases.
  • Marketing and Advertising Costs: Want more people to find your store? You have to market your store on social media and search engines. You may need to outsource content creation, search optimization, and other marketing strategies to attract potential customers and convert them into buyers.
  • Operational and Administrative Costs: This includes expenses for website development and maintenance, customer service, and using dropshipping tools for inventory management and order tracking. Legal and administrative fees, such as business licenses and compliance with regulations, also fall under this category.

These costs, when summed up, eat into your profit as a Shopify dropshipper.

Can Dropshippers Make Six Figures?

Certainly. Dropshipping experts such as Cole Turner and Sharif Mohsin have built successful six-figure dropshipping businesses. However, as this Reddit thread opines, you have to constantly find winning products, offer great customer service, keep gathering organic traction, and sell a ton of units.

When you’ve done all these, you then have to wait. This applies to both newbies and experts – waiting is part of the game.

How to Increase Your Profit Margins

You can boost your profit margins as a Shopify dropshipper with the following tips:

Selling Lucrative Products

Focus on products that have a high perceived value. You can mark up prices and still provide your customers a good bargain. Niche products often have higher margins than general products. An alternative is to sell products that are in high demand, as this leads to higher sales volumes and increased profits.

You can also make more profits by negotiating better prices with your suppliers. For this, you need to build good relationships with them so they keep you in the loop for the best deals, bargains, and discounts.

Marketing on Shopify

On Shopify, optimize your product listings and store pages for search engines so customers can easily find it. Use relevant keywords, high-quality images, and detailed descriptions to improve your visibility in search results.

If you run store ads, tailor your ads based on demographics, interests, and behaviors to attract the right customers who are more likely to make a purchase.

Build an email list with your buyers and send regular newsletters when you have new products in your store. This keeps your store top of their minds, encouraging repeat purchases.

Keeping Customers Happy

Good customer service is one of the oldest tricks for excellent business performance. Happy customers, happy entrepreneurs.

As a Shopify dropshipper, you should respond promptly to customer inquiries. Don’t delay order processing and fulfillment, and provide tracking information so buyers know when to expect their products.

Make it easy for customers to return or exchange products if they’re unsatisfied, as this lets them know they can trust your business.

Shopify Dropshipping Successes

Let’s look at a few stories of successful one entrepreneurs and how much these Shopify dropshippers make:

Cole Turner

At just 18, Cole Turner dove into dropshipping on Shopify, eager to explore online business opportunities. Over four years, his determination paid off as he built a flourishing e-commerce store, generating $2 million from 2019 to 2020.

Cole’s journey began with a diverse product range, but a jewelry item soon caught his customers’ eyes. Spotting the potential, he intensified his focus on Facebook ads and revamped his store. This decision led to $75k in earnings and ultimately enabled him to sell the store to a major corporation for an astounding $2.1 million.

Alex Philip

Alex got into dropshipping in 2015, taking the entrepreneurship world by storm when he turned over $30k a month only three years later, at age 14.

His business model? Sourcing products on Amazon and selling them to his Shopify buyers. Before Shopify though, he bought Pokemon Go from eBay and traded them on Amazon. Next, he ran a candy store and learned the basics of dropshipping.

Speaking to Forbes, the young entrepreneur remarked, “You can find any and every item on AliExpress at wholesale prices, and drop shippers can take any of these items and put them on their store, mark them up at a good price and sell them.”

Conclusion

Dropshipping is profitable when you know the exact buttons to push. You have to know where to find products, how to attract prospects, how to build valuable relationships with suppliers and buyers, how to optimize your conversion rates, and more.

If you set up a Shopify dropshipping store, you’ve covered half of the work. Shopify has a library of third-party apps and resources to figure out how to brand your store, connect to marketplaces like Alibaba and CJ dropshipping, and track your profits.

To beat the competition, you can add specific conversion apps like Adoric. Our app lets you create and recommend products that match your customers’ interests and makes it feel like you read their minds.

Want to see how Adoric improves traffic and sales? Hit the button below for a free two-week trial.

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