Industry insight: Wall decor outperforms the apparel category in dropshipping e-commerce profit

Data released by print-on-demand (POD) company merchOne reveals wall art offers e-commerce sellers using dropshipping services a significantly higher profit margin compared to apparel, allowing them to earn more per sale. After analyzing more than 311,000 orders users have sold using merchOne’s dropshipping service, the company discovered that wall art has an average profit margin of 74%, compared to 60% for apparel items. In merchOne’s case, the average base prices for both categories are similar – at $16.50 for wall art and $16.20 for apparel. The base price is the initial cost a seller pays for a product before applying their own markup. merchOne is an on-demand dropshipping company, specializing in wall art products, that is part of The Customization Group (TCG).

Apparel is the leading category in dropshipping, accounting for 15.2% of all products shipped in 2021, according to Shopify data. The home and garden category ranks second with 10.6% of all products dropshipped. Despite the higher order volume in apparel, home decor offers sellers a more profitable opportunity due to its higher pricing potential. Conversion rates for both apparel and home decor are similar, at 2.6% and 2.4%, respectively. This further indicates that wall art can be a highly profitable product category for sellers aiming to maximize their earnings.

“Interior elements, such as wall art, are perceived to have a higher value than apparel, meaning that people are more willing to justify paying $60 for an interior decor item than for a t-shirt or hoodie,” explains Elina Pīka, head of marketing at merchOne. “Our data indicates that sellers are aware of this and adjust their pricing accordingly. Wall art is sold with a profit margin 14 percentage points higher than that of clothing, despite the fact that the average base prices for products in both categories are nearly identical.”

In addition to the higher profit margins, wall decor also has lower return rates than apparel. According to merchOne data, the return rate for wall art is 0.12%, while for clothing items, it’s more than four times higher – 0.5%. Other industry data show that apparel is the most returned product category in e-commerce.

“Buyers often choose interior elements with more consideration than clothing. There’s also less room for getting measurements wrong, which is one of the most common reasons for returns in the apparel category,” Pīka notes. “As a result, sellers can expect not only higher profits but also a more stable revenue stream when they focus on selling wall decor.”

Dropshipping as a business strategy continues to grow in popularity. The dropshipping market was valued at USD 222.46 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 28.4% from 2023 to 2031. merchOne’s findings highlight an opportunity for online retailers to diversify their product offerings and add more home decor to their catalogs, maximizing their profits within the expanding industry.