If you’re an online store owner looking to ship products but don't have the facilities to stock the inventory yourself, the dropshipping model can suit your purposes very well. Starting a dropshipping business is easier said than done, and it's not a get-rich-quick scheme.
Since the pandemic, dropshipping has exploded. The industry is estimated to be worth $197 billion, and experts predict that it will be worth $500 billion by 2027.
Many people run a dropshipping business on Shopify. Should you also get involved? Is it still worth it to start a dropshipping business? What is the truth about Shopify dropshipping?
What Is Dropshipping?
The dropshipping business model is an order-fulfillment method that lets store owners sell directly to customers without having to stock any inventory. When a customer places an order with the dropshipping store, the store owner passes on the order to a third party who is keeping inventory and takes care of the order, and ships it to the customer.
The store owner doesn't handle any products. The store owner pays the wholesaler's retail price but charges the customer another retail price. The difference is the profit to the store owner.
It is simple to start a dropshipping business, all you have to do is register an account with a supplier, and you can start selling.
Is it really that simple, though?
Yes, it's simple, but it's not easy.
Starting a dropshipping business is challenging for the following reasons.
Low Profit Margins
You don't need a lot of money to start a dropshipping business because you don't have to produce the products yourself, you don't have to store them and send them. But putting in less money also means your profit margins are small; most of what you make goes to the supplier.
The fact that little money is needed to start a drop shipping business means the barrier to entry is low, so competition is stiff.
No Control over the Supply Chain
Since you don't keep the stock and don't ship it, you have no control over this part of the business, yet you are the one who is answerable to the customers.
Legal Liability Issues
If you are not careful when choosing a supplier, you might find yourself at the receiving end of questionable practices by your suppliers.
Difficult To Build A Brand
Since you are selling someone else's products, shipped by yet another party, your store won't earn a reputation for excellent products and services. Your customers will see the manufacturer's logo and the shipping company's label, but not yours.
Why Choose Shopify For Dropshipping?
There are many e-commerce platforms to choose from for a dropshipping business, but doing so on Shopify has specific benefits. The platform is very user-friendly and offers numerous apps specifically designed to facilitate dropshipping.
Also, Shopify allows merchants to do much more than just sell products. It's a complete e-commerce platform that enables users to run a viable online business, promoting and selling products to consumers worldwide.
Reasons to Choose Shopify For Dropshipping
1. User-friendly – no need for Advanced Technical Skills
Shopify is user-friendly, so anyone who wants to start a dropshipping business can set up a store on Shopify without needing to be able to code. The Shopify development team takes care of all updates and technical aspects of online stores on the platform.
2. Variety of Apps to enable dropshipping functionalities
Shopify offers a host of apps – more than 150 – that are specifically for dropshipping stores. These apps allow dropshipping businesses to find unique products to sell and stand out from other stores selling the same products.
These are in addition to the thousands of apps in the Shopify app store that are designed to help online businesses thrive.
3. Facilitates Shipping
Through its partnership with leading shipping companies like DHL and UPS, Shopify makes it easy for store owners to manage their shipping. Shipping is a crucial aspect of any dropshipping business, so this aspect is a great bonus for Shopify store owners.
Shopify also enables merchants to use couriers of their own choice.
4. All the Payment Gateways you could wish for
Shopify offers more than a hundred payment gateway options. Since a limited choice of payment options is one of the main reasons for cart abandonment, this is one of the reasons Shopify is a preferred platform for a dropshipping business.
In addition, Shopify also offers merchants its own payment gateway, called Shopify payments. When you choose this option, fees for using it are waived. Shopify payments can offer prices converted to the currency of the country the shopper is from, which makes for a more personalized shopping experience leading to more conversions.
5. Low-Risk opportunity to try out new products to sell
Shopify provides a low-risk opportunity for merchants to try out new products to sell without having to spend large sums of money on the new products. Business owners can try out their ideas for new products without making a financial commitment in advance.
6. SEO perks
Shopify takes SEO seriously and does everything in its power to make sure search engines recognize stores. Shopify works to improve each store's ranking on Google and also provides many SEO functions for store owners to improve their site's ranking.
Is dropshipping with Shopify worth it?
Yes, despite all the competition, dropshipping is still worth it. But success depends on a few factors.
- Investment in time and effort
- Choosing the right products
- Maintaining profit margins
- Choosing the right suppliers
To know if dropshipping is worth it, you must ask yourself, is it profitable? The problem with dropshipping is the stiff competition from many stores selling the same products. This pushes prices down, shrinking the profits you can make on your sales.
Also, you actually do pay for not handling orders, shipping, and returns.
These factors make turning a dropshipping business into a profitable enterprise extremely difficult.
But it certainly can be done.
There are many successful dropshipping companies online. For instance, Odditymall is a hugely successful Shopify dropshipping store with estimated web sales of $10M-$25M. It has an estimated web sales of $10M-$25M. Odditymall.com attracts 59,897 visitors every month, selling unique gifts. The store specializes in odd gadgets and unusual product designs – anything that looks out of the ordinary.
How to start a dropshipping business on Shopify?
Seven steps to starting a dropshipping store on Shopify
1. Choose a store name
Choose your store name with care – it should be simple, easy to remember, and creative. You can use Shopify's online business name generator for this purpose. When you have come up with a name, check on Google if it is available.
2. Create your Shopify account
Access the Shopify homepage and click “Start free trial.”
Enter your email address, create a password for your account and enter the name of your store. Complete the information and questions that follow. When you've done this, your Shopify account will be launched.
3. Customize your settings
You need to customize your settings in order to run your dropshipping business, receive orders and payments, and arrange shipping.
Go to the Shopify Settings page and select the Payments tab. Provide your payment information. For instance, you could choose to add your PayPal account. Shopify supports many payment gateways, but you might consider going with PayPal, to begin with, as it is popular with many consumers.
These tools are available under Settings. Click on the Checkout tab and scroll down to the bottom to find the appropriate fields, and click on the Generate button.
Shopify recommends that merchants offer free shipping, as this is the least confusing. It becomes very confusing if a store offers different shipping rates for different regions. It is recommended that shop owners rather incorporate shipping costs into the product selling price.
First, remove the domestic shipping zones and add "Free International Shipping", then select "Free Shipping Rate."
4. Launch your Shopify dropshipping store
To launch your store, go to the Shopify admin dashboard. Locate the Sales Channels tab and select the "Add an online store" option. Your store is now launched.
5. Design your store
Your storefront is how you will present your business to clients and visitors to your store. The two most important aspects to consider are your theme and your logo.
Choosing a theme for your store
The Shopify theme store offers a wide choice of free options and paid themes. Choosing the best theme might take you quite a while, but it's important, so spend enough time on this aspect. If you are on a tight budget, don't hesitate to go with a free theme.
Shopify offers many resources to help newcomers choose the best option for a dropshipping business. Be sure to consult these resources before you make your choice.
Creating a logo for your store
Give due consideration to your store logo, as it will help you to establish your brand. There are different ways to go about creating a great logo for your store. You can use:
- Shopify's free online logo maker
- Graphic design software, like Photoshop or Canva
- The services of freelance graphic designers
6. Dropship on Shopify with DSers
To add products to your dropshipping store on Shopify, you need to download the DSers app. This app enables dropshipping. It is integrated with AliExpress, so you'll have access to tens of thousands of products to offer in your store.
Remember to add a product category to your store after you have added DSers. If your store sells cell phone cases, simply call the category "Cell phone cases."
Before you choose products on AliExpress to sell, research the best products to sell in terms of a dropshipping business. Choosing the right products is crucial to ensuring a successful store on Shopify.
To sell a product, use the DSers app to find products on AliExpress. Once you have found a product, click the Import button on the product to have it appear in your Shopify dropshipping store.
7. Start a marketing campaign
It is highly unlikely that a new dropshipping store on Shopify will make a notable number of sales without some marketing. You need to investigate and invest in marketing campaigns to draw traffic to your store.
It's important to invest time and effort into choosing the best marketing campaign to grow your business. You can consider the power of social media for this purpose, including Facebook advertising, Instagram, and TikTok.
Shopify has built-in marketing tools that you can take advantage of. You can also consider doing one of the free courses that the platform offers on business and marketing skills. The platform also allows store owners to track the results of their promotional campaigns.
Are you planning to migrate your store? If you are thinking of migrating your store to or from Shopify, the Cart2Cart Shopping Cart Migration tool can accomplish it for you with no fuss. Ours is an advanced automated migration tool that transfers all your data to another platform quickly, and securely.