14 Drop Shipping Pros and Cons to Decide If It's Right for You

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You've seen the ads promising a carefree life running an online store from the beach, right? You may have even clicked through to read more about drop shipping. For the uninitiated, dropshipping sounds enticing. You can create an online store immediately and start selling products without the hassles of inventory or order fulfillment. But is it as simple as it sounds? As you look closer, you may realize that dropshipping isn't all sunshine and rainbows. This business model has distinct advantages and disadvantages, and assessing these dropshipping pros and cons is critical for determining if this is the right path for you. This article will help you objectively understand the pros and cons so you can confidently decide if this low-risk business model aligns with your goals before you invest time and money and help find Best Dropshipping Niches 2025.

As you research, Shophunter’s Shopify sales tracker can help you achieve your objectives. By tracking your dropshipping sales, this tool can help you determine if this business model will work for you before you fully commit.

Why Is Dropshipping Still Popular in 2025?

Even though dropshipping has existed for years, it remains a viable business model. The number of people searching “dropshipping” increased exponentially from 2004 through 2024, showing its continued relevance. Why? The process of starting a dropshipping business is relatively simple.

Choose in-demand products to drop ship.

Find a dropshipping supplier that stocks the products you want to sell.

Create an online store to let shoppers browse and buy your products.

Watch the money roll in, right? Not always. Opening a dropshipping store may require less investment than a traditional retail business, but dropshippers still need to build an online presence and attract customers.

So, why is dropshipping still popular in 2025? According to research from Grand View, the global dropshipping market was valued at $351.8 billion as of 2024, a 23.6% increase from the year prior. Experts predict a 24.39% average annual growth rate of dropshipping between 2020 and 2026, when the industry is projected to surpass $500 billion.

The Reality of Dropshipping: Debunking Myths and Setting Realistic Expectations

As consumers increasingly turn to the convenience of online shopping, dropshipping has risen in popularity. Entrepreneurs can take advantage of this online-first preference and launch a business without the costs associated with stock management.

The recent increase in awareness of dropshipping has led to an influx of online influencers recommending the business model as a get-rich-quick scheme. Like any business model, dropshipping has pros and cons and doesn’t present an opportunity for overnight success.

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14 Key Drop Shipping Pros and Cons to Decide if It’s Right for You

Pros of Dropshipping

Many of the pros of dropshipping center around how easy it is to get set up with it and the ability to cut costs in some key areas of your retail business. Let’s consider these pros of dropshipping:

1. There’s No Need to Buy Inventory Upfront or Store It

The effect of dropshipping is that you never touch the product, meaning you don’t need to:

Buy the inventory upfront

Facilitate its storage

Package it

Ship it

As such, you could use it to try out new products you are not 100% convinced of yet or use it as your fallback if you accidentally sell more than I have stored in the warehouse.

2. Easy to Get Set Up

Many businesses start with a pure dropshipping model, as it’s easier to get up and running, and you don’t have to worry about where to store your goods. Once your niche is defined, you must find a supplier offering a promising dropshipping service. You may choose to begin your search on Alibaba.com or via Google, or you may even know someone who can already offer you this service.

Next comes an agreement on pricing, ensuring you’re not undercutting the retail side of your business (if relevant) and still making a profit despite the wholesaler’s fees. Now the fun begins – advertise and promote your new venture! It is very easy to get set up with dropshipping, especially compared to selling via retail sales channels alone.

3. Low Overhead Costs

Your overhead expenses can be low as you’re not purchasing inventory or managing a warehouse. These costs will likely increase as you grow, but they will still be low compared with a more traditional brick-and-mortar or online store.

4. Flexibility and a Wide Array of Products

A dropship business can be managed from anywhere in the world, offering flexibility in where you work or your team. This would be great if you could outsource your labour to the overseas market.

You also have flexibility over which products you can sell. You’re simply listing what other suppliers have to sell, allowing you to test out what works with your customers and what doesn’t.

5. Multi-Channel Selling

You can use dropshipping for your business while selling on your domain, through a store like Amazon, or on social media channels.

6. Easier to Grow Your Business

In traditional businesses, if your sales double, you and your team do double the work. But in a dropshipping business, your suppliers bear the brunt of increased volumes and order processing.

There’s no hindrance to growing as a business, as you don’t have to go out and hire 10 more employees. Instead, you can continue functioning relatively generally as a business while your suppliers do the behind-the-scenes work.

7. Simple Testing

Since other tasks like order fulfillment and shipping are taken off your plate as a dropshipper, your main focus is testing which products sell best. It’s why some entrepreneurs consider dropshipping a crash course in ecommerce marketing.

Take it from Caleb Dueck, director of operations at Sperry Honey, who says: “Dropshipping models like print on demand let you add additional value to your products. Since your print-on-demand platform ships the order to the customer, you still get the value of outsourced fulfillment while bringing your unique product to the table.”

8. Adaptability to Market Trends

The nature of dropshipping allows you to adapt quickly to changing market trends and consumer preferences. This business model enables entrepreneurs to respond promptly to emerging opportunities by introducing new products or fine-tuning pricing strategies.

This agility ensures that dropshipping businesses remain competitive and dynamic in an ever-changing marketplace, allowing them to capitalize on trends and maintain relevance among consumers.

Cons of Dropshipping

Dropshipping can be an easy and great way to start or grow your business, but as with anything, there are consequences.

9. Can Be More Expensive Than Traditional Retail

What’s not to love? Well, all of this comes at a price. Dropshipping’s biggest financial drawback is the lower margins, as suppliers will often charge a premium to brand up their packages with your desired branding.

You must seriously consider this in your planning:

Do I increase my prices, potentially scaring away new or loyal customers?

Or should my margins take a bit of a hit at first, before I have the loyal following behind me, allowing me to increase my prices slowly over time?

10. Limited Control Over Quality and Branding

Aside from the costs involved, the real killer for some merchants is damage control, which means acting as the intermediary on product or shipment quality issues.

Running between your company and another supplier (or multiple suppliers) is not only a lot of extra work for you and your team. Still, it can also cause issues with customer satisfaction, which brings us nicely onto…

11. Satisfying Customers Becomes Harder Than It Needs to Be

Trying to handle customer service issues as an in-between can get stressful, as you don’t have complete control. Shipping updates can be hard to give, especially if the supplier has a few warehouses scattered around, each shipping a part of the order, arriving at different times, via various couriers.

12. Tracking Inventory Can Be Tough

When stocking your products, tracking inventory is easy (especially with an integrated retail management platform like Brightpearl). But as soon as you start introducing multiple warehouses (managed by other companies), keeping an eye on stock can be challenging. It’s possible to use EDI to connect with other suppliers’ systems, but this is not always possible – what if your supplier doesn’t have this technology in place?

In these cases, it’s best to have a solid relationship with your supplier and regular updates from them to know how many items you can sell or whether your customers need to wait for more stock to arrive with your suppliers before receiving their deliveries.

13. Complexities With Shipping Can Occur

We’ve already discussed one complexity, such as the possibility of one customer order being shipped from multiple suppliers simultaneously via different couriers. But what about shipping costs? When working with several suppliers, it can be challenging to keep on top of how much shipping each company is charging you and, thus, how much I should charge my customers (without scaring them off).

Be sure to keep an eye on this. Either you should increase your shipping prices accordingly or include some of the costs in the product price so that my margins don’t take too much of a hit.

14. Fierce Competition

The most significant disadvantage of dropshipping is the competition. Because dropshipping is such a popular and low-risk business model, many people are trying to do it. While everyone can quickly run a dropshipping business, you’ll need to make extra effort to make your store stand out and build customer trust.

Social media can boost your dropshipping awareness. Use Instagram or TikTok marketing to grab a younger audience’s attention. Facebook and LinkedIn are better options for promoting your dropshipping business to professionals or older generations.

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Is Dropshipping Right for Your Business?

When you start a dropshipping business, you must understand that you probably won’t have much control over product quality. That’s because dropshippers may not always see products before selling them. It works with suppliers who fulfill orders on its behalf. When a customer buys a product from your store, the supplier packages and ships the item directly to the buyer.

If the product is damaged or lacks the right packing materials to protect the order, you’ll likely want to consider other options. To avoid quality control issues, order test pieces from potential dropshipping suppliers. This will help you describe goods accurately in your listings and ensure that your supplier provides a good shipping experience.

Where Will You Sell Your Products?

Before starting a dropshipping business, you need to choose a sales channel. Is your audience on eBay, or are they more of an Instagram crowd? Whatever you decide, make sure your e-commerce platform includes direct integration with your desired social media sites or online marketplaces. There are lots of third-party apps that can facilitate these listings, but direct integrations reduce friction and opportunities for error.

How Will You Differentiate Your Store?

Sometimes, you may find that you’re sourcing products from the same suppliers as the stores you compete with. That means you’ll have to find ways to make your listings stand out.

Here are a few strategies to try:

Use SEO and marketing tools: Some e-commerce website builders include search engine optimization features, like helping you choose the right keywords for your page titles and tags, and tools for creating marketing campaigns, including Facebook and Google ads.

Take product photos: High-quality product photography can differentiate your listings from similar products. Make sure your photos show the product from all angles. Videos, if your e-commerce platform supports them, can help show what the product looks like in use.

Compete on price: If an online shopper sorts a list using “Price: Low to High,” lowering your prices can ensure I’m near the top. The tradeoff, of course, is that it eats into my profit margins.

How Will You Ensure a Good Delivery Experience?

When and how orders are delivered to customers is a significant factor in how they will feel about your business. Misdelivered packages, the inability to track deliveries, and poorly packaged or broken products can quickly get your dropshipping business bad reviews. But you can do a few things to boost your dropshipping business’s delivery experience: Try offering more than one shipping option.

According to a 2022 study by UPS Capital, 87% of consumers said being able to control certain aspects of their shipping experience, such as choosing which day their package will arrive or being able to track a package, would motivate them to purchase from a merchant.

Choosing the Right Shipping Carrier and Insurance for Your Business

UPS Capital is a financial services division of UPS. Know how to ship your products. Not all shipping companies will ship every product; some carriers are better at certain items than others. Verify that your partners are using services that can handle the size or weight of your products.

Don’t forget insurance. One of the best ways to ease a customer’s mind is to offer shipping insurance, which usually covers situations during shipping, such as damage to a package or shipping delays. Businesses can offer to let customers pay for insurance, saving the merchant money while soothing customer concerns.

ShopHunter's Shopify sales tracker offers a unique tool for ecom founders, particularly those in the Shopify ecosystem. At its core, it is a custom algorithm that estimates sales for entire stores and specific products, helping users quickly validate product potential. The platform goes beyond basic sales tracking, featuring an ad spy tool that monitors advertising activity across stores.

How Competitive Analysis Can Drive E-Commerce Success

This combination lets users spot trending products and successful marketing strategies early on. ShopHunter aims to streamline product research and reduce the risk of investing in low-performing items, whether you're:

A dropshipper

A Shopify store owner

Someone looking to enter the e-commerce space

Sign up for a free trial (no credit card required) of our Shopify sales tracker tool to find your next eCom opportunity or to level up your current eCommerce store by learning from your competitors.