The southwest coast, specifically the Khulna region of Bangladesh, has seen a substantial increase in the production of dried fish, involving marginalized coastal people. This study uses a mixed methods approach and the sustainable livelihood approach (SLA) to assess these fish-drying communities’ socioeconomic characteristics, ways of living, and adaptability. Due to their lower literacy, irregular wages, and labor-intensive employment, the research outcomes indicated that the communities engaged in the drying process were economically disadvantaged. Male workers exhibited a relatively higher participation rate compared to females. However, it was observed that females had less power over their wages and earned less than USD 2.74–3.65 per day compared to males at USD 3.65–5.48 per day. Even though there were a lot of opportunities for employment, the survey showed that very few vendors, manufacturers, and laborers regarded themselves as financially independent. To cope with various impacts and obstacles, off-season earnings, a variety of fish species, drying facilities, dealer associations, and social relationships were crucial for dried-fish processors, workers, and traders. The research suggests implementing suitable measures to diversify alternative sources of income and emphasizes the importance of fostering strong collaboration among the communities, local management authorities, and the government. With regard to dry-fish approaches, these steps are essential for ensuring long-term sustainability and improving community resilience among coastal communities.