Dropshipping got a bad reputation. Everyone and their cousin tried it in 2019 using the same cheap products from the same suppliers. Customers got burned by month-long shipping and terrible quality. Trust disappeared.
But the model itself isn't dead. It just needs to be done differently now. The people making money with dropshipping in 2025 figured out what actually matters.
Shipping speed wins everything
Two-day shipping became the baseline. If your product takes three weeks to arrive, people assume you're running a scam. They're not entirely wrong to think that.
Working with suppliers who have warehouses in your target market isn't optional anymore. A supplier in China with no US presence means you already lost. Find suppliers with local fulfillment or skip the product entirely.
We worked with a store selling home fitness gear. They switched from Asian suppliers to ones with EU warehouses. Returns dropped by 40% just because products arrived fast and matched expectations.
Product selection matters more than marketing
You can't fix a bad product with better ads. Stop trying. The stores doing well picked products people actually want and that don't already flood the market.
Look for gaps. Not trendy gaps that 500 other stores spotted, but real ones. Products that solve specific problems for specific people. Gardening tools for people with arthritis. Desk accessories for people who work from vans. Things that major retailers don't care about because the market's too small.
Your supplier relationship is your business
If you can't call your supplier and talk to a real person who knows your account, you don't have a supplier relationship. You have a transactional nightmare waiting to happen.
Good suppliers care about your success because it's their success too. They'll flag quality issues before you ship them. They'll work with you on custom packaging. They'll communicate when problems come up instead of going silent.
Bad suppliers disappear when orders go wrong. Then you're left explaining to angry customers why their order never showed up.
Stop competing on price
Racing to the bottom on price is a fast way to lose money. Someone will always go lower. Then you're selling $30 products with $5 margins and wondering why you're working 60 hours a week for nothing.
Compete on something else. Better product selection. Faster shipping. Actual customer service. Content that helps people use the products properly. All of these let you charge more because you're providing more value.
The numbers that actually matter
Most dropshipping advice focuses on revenue. Revenue means nothing if you're losing money. Focus on profit margin per order and customer acquisition cost instead.
If it costs you $40 to acquire a customer and your average order profit is $35, you're slowly going broke. The math doesn't work no matter how much revenue you generate.
Track your real costs. All of them. Product cost, shipping, payment processing fees, returns, ad spend, platform fees. Then figure out if you can actually make money. Most people skip this step and find out the hard way.