Dropshipping is one of the easiest ways to start an online business. You don’t need a huge sum of money to start or even a storage space to keep products. 

Instead, you work with a supplier, focusing on selling while your supplier handles the shipping. Sounds great, right? 

If you’ve been wondering how this eCommerce business model works or whether it’s still a great business to start in 2025, this article will work you through how dropshipping works and how you can get started as a beginner. 

What is a dropshipping business model?

A dropshipping business model is like your typical retail business, only you don’t have to keep inventory. 

This business uses a retail fulfillment method where you sell products, but the suppliers handle storage, packaging, and shipping orders directly to your customers. 

This nature is a big reason why this business model has grown in popularity over the years and continues to hold great potential as a sustainable and lucrative business for beginners. 

The model appeals to individuals looking to start an online business with low upfront investment and minimal risk.  According to PR Newswire, the global dropshipping market is expected to reach $557.9 billion by 2025, highlighting its massive potential. 

Since you don’t need a warehouse or upfront investment, the barriers to entry are almost nonexistent. However, this business model does come with its challenges, which we’ll discuss shortly. 

How does dropshipping work?

Dropshipping follows this simple sequential process:

1. Choose a Product and Supplier

First, figure out the type of niche and product you want to sell and find a supplier for the product.  You can partner with a dropshipping supplier like AliExpress, Oberlo, or Spocket, or a supplier you know personally, and strike a deal with them. These platforms connect you with manufacturers and wholesalers offering products ready to ship.

2. Set Up Your Store

Next, you want to create an eCommerce store using platforms like Shopify, WooCommerce, or Wix. Add the chosen products to your catalog, set your prices, and create compelling product descriptions. 

3. Customer Orders

When a customer places an order on your website, you forward the order details to your supplier.

4. Seller receives order 

The supplier handles everything, from packaging to shipping the product directly to your customer.

Which niche is best for dropshipping? 

Figuring out the right niche when starting a dropshipping business is a common dilemma most beginners face, which delays the founding process of your business.

Choosing the right niche is critical for success and standing out in the crowded dropshipping market. But with so many dropshipping niches, how do you know which is the best and most profitable? 

1. Sustainable and Eco-Friendly Products 

More people, including you and me, want to shop responsibly. It’s no surprise, considering 73% of global consumers say they would change their consumption habits to reduce environmental impact. 

This trend is only growing, and it’s your chance to tap into a profitable niche while making a difference.

When I look at what’s trending, items like reusable water bottles, bamboo utensils, and biodegradable packaged goods are great products to consider in the sustainable niche. 

You can also consider the following products if you plan on selling products in the sustainability niche: 

• Chemical-free cleaning products 
• Organic clothing made from cotton, hemp, or bamboo
• Reusable cups 
• Sustainable activewear 
• Tote bags
• Bamboo straws  

2. Health and Wellness products 

Health and wellness is one of the most profitable and sustainable niches in dropshipping. These products are constantly in demand and are projected to reach $7 trillion by 2025. 

So, if you’re looking for a niche with consistent revenue, this is it.  You can consider the following trending products to sell in the health and wellness niche: 

• Neck massager 
• Facial beauty roller 
• LED facial lifting device 
• V-Line face shaping strap 
• Electronic teeth whitener 
• Lash-lifting kit
• IPL Laser Epilator
• Automatic hair curling iron 
• Blackhead Remover Vacuum
• Pilates reformer 
• Yoga mat 

As consumer interest in fitness, beauty, and wellness products continues to increase, this niche is expected to experience continued growth. 

If you’re ready to explore this niche, you can profit from the growing demand for fitness, beauty, and personal care products listed above that show no sign of decelerating. 

3. Home Office Supplies

With remote work growing by 91% over the past decade, the demand for home office products like ergonomic chairs, adjustable desks, and organizational tools isn’t slowing down anytime soon. 

If you think about it, almost everyone working from home wants a comfortable and productive space. 

This niche provides tremendous opportunities for you to earn high-profit margins, considering the 417% increase in American employees expected to work from home by 2025.  

If you’re considering this niche, focus on items that solve real problems for people. For example:

• Ergonomic chairs to reduce back pain.
• Cable management systems for a clutter-free desk.
• Noise-canceling headphones for better focus during virtual meetings.

You can also consider the following products to sell in this niche: 

• Desk pads 
• Dry erase markers 
• Desk lights 
• Ergonomic desk and accessories 
• Mechanical pencils 
• Notepads 
• Staplers 
• Desk mobile phone holder 
• Cell phone adjustable stand 
• Webcams and microphone sets 
• Wireless charging pads 

I’d also recommend keeping an eye on seasonal demand. During back-to-school or end-of-year periods, people tend to upgrade their workspaces. 

You also want to partner with reliable suppliers who can deliver quality products.  

4. Phone Accessories 

Owning a mobile phone has become a necessity for individuals, and people understand how important it is to protect and also feel the need to accessorize their phones. 

This niche has shown peak growth in the last five years and is projected to grow 8.3% annually through 2028. If you’re considering dropshipping phone accessories, you can dropship these in-demand phone accessories: 

• Phone mounts and stands 
• Ring lights 
• Selfie sticks 
• Tripods 
• Phone grips 
• Screen protectors 
• Phone wallets 
• Cleaning kits 
• Phone cooling accessories 
• Phone cases 
• Wireless chargers 
• Car chargers 
• PopSocket 
• Phone armband 
• Lens kit

Smartphones are everywhere, and most people don’t just use them—they like to accessorize them. From protective cases to wireless chargers, phone accessories are always in demand. 

According to Statista, the mobile accessory market is expected to reach $328 billion by 2030, and that’s a lot of opportunity for you to tap into.

Plus, new phones come out every year, and with them comes a demand for compatible accessories. This constant product cycle makes the phone accessories niche lucrative. 

5. Personalized items

If you’d like to differentiate yourself from the competition, print-on-demand dropshipping is another profitable niche that allows you to provide customized products that are unique to customers.  

Whether it’s monogrammed mugs, custom jewelry, or photo-printed blankets, personalized items drive customer engagement and loyalty, boosting your revenue as you can charge more for custom products. 

Also, suppliers like Printful, Printify, and Auto-ds offer easy-to-use tools that let customers customize their products directly on your site, so you don’t have to handle the details.

If you’re considering this niche, here’s a list of profitable print-on-demand products to dropship: 

• Mugs
• Phone case 
• Tote bag 
• T-shirts 
• Hoodies 
• Pillows 
• Blankets 
• Belts 
• Hats 
• Towels 
• Engraved jewelry 
• Stickers 
• Shower curtains 
• Wall art 
• Yoga prints 
• Backpacks 
• Personalized baby clothing 
• Water bottles 
• Socks 
• Face masks 

Finding the best and most profitable dropshipping niche requires a lot of research. You can use tools like Google Trends, Exploding Topics, Dropship Spy, and TikTok Creative Center to research the rising demand for products and their competition. 

Look for niches that have steady growth but aren’t oversaturated. You also want to test your niche before going all in. 

Use a small budget to run ads or test products on platforms like Facebook or TikTok. See what gains traction before you scale up. This way, you’re not just making assumptions but making decisions based on data and insights. 

Pros and Cons of Dropshipping

Pros of Dropshipping 

1. Low Startup Costs

What makes dropshipping an attractive small business idea for beginners is that it doesn’t require a hefty budget to start up. 

You don’t need a warehouse to keep inventory, and you can run the business from the comfort of your home, using just your laptop or smartphone. You also only pay for a product after a customer places an order. This means you’re not stuck with unsold items or storage fees. 

To start a dropshipping store can cost as little as $100 to $150, depending on the platform you choose and any optional tools you add. If the cost has ever held you back from starting an online business, dropshipping offers an affordable way to get started.

2. No Inventory Management

When running a dropshipping business, you don’t have to deal with the headache of managing inventory. 

I’ve seen how time-consuming and costly it can be for traditional retailers to store and organize products, track stock levels, and ensure nothing gets damaged. With dropshipping, you skip all of that. 

Your supplier handles everything from storing the products to shipping them directly to your customers, which helps you save time and money. The lack of inventory management is one of the top reasons why most individuals chose this model.  

You get to focus on growing your business—marketing, customer service, and making more sales. This makes dropshipping an ideal small business idea for beginners looking to start a business online. 

3. Wide Product Selection 

By partnering with suppliers like Alibaba, AliExpress, and CJ Dropshipping, you get the opportunity to sell a variety of products. This allows you to provide an array of trending products to customers. 

You can offer any product, from fashion accessories to home decor and fitness, allowing you to experiment with multiple niches to know which has more demand and is more profitable.  

So, if you’re someone who wants to explore different product categories or adjust quickly to trends, dropshipping’s wide product range is a massive advantage. It puts you in control, giving you the freedom to cater to your audience’s preferences without limitations.

 4. Easy to Scale

Scaling a business, especially a traditional retail business can sometimes be challenging and requires planning.  

You could receive a large number of orders, and if you don’t have the resources to accommodate them, customers might have a lack of trust in your brand. 

With dropshipping, it is easy to scale. Suppliers usually have many products in stock if you get a bulk order, so it’s always easy for them to fulfill bulk orders, making it easy to scale your dropshipping business.  

As your sales increase, you don’t have to scramble to stock up—your supplier handles that for you.

5. Flexibility

Dropshipping allows you to work from anywhere with an internet connection, whether it’s your kitchen table or a coffee shop. You only need to connect with suppliers, communicate with them frequently, and provide timely customer support. 

You’re not tied to a specific location because there’s no need for a warehouse or office space. This makes dropshipping ideal for anyone looking for a business model with a work-life balance. 

Whether you’re a parent, a student, or someone looking for a side hustle, dropshipping provides freedom to manage your time spent on work and other important areas of your life.  

Cons of Dropshipping 

1. Lower Profit Margins

Since you rely on suppliers for sourcing products, handling inventory, and shipping, they get most of the profit, while you get less, because you have to consider suppliers’ prices when setting your product prices. 

Also, the low barrier to entry makes dropshipping highly competitive, which could also cause you to reduce your prices as you’ll be competing with other dropshippers in your niche. 

Doing this will result in low-profit margins, making it hard to cover operating costs, this includes marketing, advertising, managing your website, and other expenses. 

And let’s not forget about marketplace fees. Using marketplaces like Amazon and eBay for your dropshipping business can take a percentage fee out of every sale, which eats into your already-thin profits.

To avoid low-profit margins, you want to make a deal with your suppliers, select the right products, and choose a niche that’s not oversaturated. This way you don’t have to continuously reduce your price to compete with others, improving your profit margins. 

2. Less Control Over Shipping

As you don’t package or ship the products yourself, you can’t guarantee the delivery speed or the quality of the product delivered. 

If your supplier delivers a poorly packaged product or a product that’s damaged, it could tarnish the reputation of your brand, and customers don’t care if it’s not your fault or not.

Also, suppliers can delay orders, preventing customers from shopping with your brand, considering 87% of shoppers say shipping speed is a key factor in deciding whether to shop with a brand again. 

You’ll also face challenges with tracking orders. Sometimes, suppliers use unreliable tracking systems, and you’re left explaining delays you can’t control. If you’re considering dropshipping, you want to be prepared for these challenges and make sure you vet your suppliers carefully. 

3. Intense Competition

Dropshipping is easy until you have to compete against established stores with lower prices, faster shipping, and better customer reviews. When you sell the same products as hundreds of other dropshippers, it’s tough to stand out.

If you don’t offer unique products or a stellar customer experience, you’ll lose customers to competitors who do it better. It’s frustrating, especially when you’re just starting.

So, what can you do? Focus on creating a strong brand using strong marketing and advertising tactics. Use professional product photos, write compelling descriptions, and provide exceptional customer service. 

4. Refunds and Returns

When it comes to refunds and returns, dropshipping can get tricky. As you aren’t the one in charge of fulfilling orders, when something goes wrong, whether it’s a damaged product, wrong size, or late delivery, you’re the one customers will reach out to. 

Most suppliers have their own return policies. Some don’t accept returns on certain items, which might not always align with what you want to offer your customers.  

You want to make sure your supplier has a clear and flexible policy. Choose suppliers with flexible return policies upfront and communicate your return process clearly on your website.

Conclusion 

Dropshipping in 2025 is still a viable and lucrative business model, however, it does come with some challenges. 

Understanding these challenges can help you implement effective strategies to build a thriving dropshipping business. You need to choose the right niche, partner with reliable suppliers, and prioritize customer satisfaction.

Dropshipping FAQ 

Should I start dropshipping?

Yes, if you’re looking for a low-cost entry into the eCommerce industry, dropshipping could be a good choice. You don’t need to manage inventory or handle shipping, which makes it beginner-friendly. 

Although there is some work required to make it a successful business, if you’re ready to put in the work to market your store and find the right niche, dropshipping can be a profitable venture.

How much can I make dropshipping?

On average, dropshippers make 10-30% profit margins per sale. However, your earnings depend on several factors, such as product type, product price, niche, and how much effort you put into marketing to get customers. 

How much do I need to invest to start dropshipping?

You can start dropshipping with as little as $100 to $500. 

This amount can cover essential costs like setting up a dropshipping store with an eCommerce platform, buying a domain name, and marketing your products. While the initial investment is low, you’ll need to budget for ongoing expenses like website management and marketing.

How do I start a dropshipping business?

To start a dropshipping business, you can follow the steps below:

• Choose a niche that you’re passionate about or one that’s trending.
• Find reliable suppliers using platforms like AliExpress, Spocket, or Oberlo.
• Set up an online store on platforms like Shopify or WooCommerce.
• Add your products and write compelling product descriptions.
• Market your store through social media ads, email campaigns, and influencer partnerships.
• Optimize your store for conversions and monitor analytics to scale.

Is dropshipping a good idea for beginners?

Absolutely. If you’re new to eCommerce, dropshipping is one of the easiest ways to start. You can focus on building your brand and marketing while suppliers handle your customer orders.