Your guide to kickstarting your Shopify dropshipping business
Running a dropshipping business is a surefire and cost-effective way to start your successful Shopify venture. There has been a striking increase in Shopify dropshipping stores, and the trend is still on the rise. Eager to make a foothold and be the next dropshipping champion? Here is an ultimate guide to starting your own Shopify dropshipping business.
Dropshipping is a retail order fulfilment method where a store doesn’t keep the product it sells in stock. Retailers act as a storefront and purchase the goods directly from a third party. This third party can be a manufacturer, a wholesaler or another retailer. The goods are then shipped directly to the customer, and the merchant can charge the customer without actually handling the projects.
Besides the retailer, there are three different parties involved in dropshipping. First, the manufacturers or wholesalers provide you with the raw product. Then, customers would buy from your retail store, and once a customer places an order with your retail business, you can alert the manufacturer or wholesaler. After that, these manufacturers or wholesalers will charge you, package, and ship the product to the customer. The dropshipping cycle is then completed once you charge your customer for the service.
4 key benefits of dropshipping
Flexible cost structure
With dropshipping, you can avoid the huge initial cost of paying for inventory and warehousing upfront. Your only pay per sale and your overhead costs remain low.
Because you don’t have any physical inventory or facilities, you can technically run your dropshipping business anywhere as long as you have internet access.
Since you can choose from the millions of readily-available options, you can either stick to a niche with a loyal following or adapt quickly to the latest trends. The choice is yours.
Without holding physical inventory, you can skip the hassle of managing your warehouses, watching stocks or fretting over expiries. Use your brainpower on something more value-adding.
Shopify dropshipping is a great way for sellers to test out new product ideas without having to own or pay for a large inventory shipment. It allows more people to participate in eCommerce and fulfil their entrepreneurial spirit in a relatively low-risk environment, and many of them have credited their dropshipping success to Shopify.
In this case, the biggest steps are finding your right market position, setting up your Shopify storefront, and finding the right manufacturer or supplier. Marketplaces like AliExpress have millions of products immediately available with a click of a button, and reliable integrated supplier directories like DSers can help you resolve the logistical issues.
Besides starting from scratch, you can also find one from Exchange, Shopify’s official online store marketplace. Once you find a business that matches your goals and budget, you can take it over and start running it.
Dropshipping has many advantages indeed, and if you were to run your dropshipping business on Shopify, it can give you an additional edge. Choosing Shopify as your eCommerce platform can help avoid unnecessary steps or difficulties. Here are the reasons why:
Shopify has a wide range of solutions that can integrate seamlessly with the platform, all specifically catered for dropshipping retailers. For example, a dropping shipping app like Oberlo can be quite useful for the management of inventory, packaging, and shipping.
Shopify is one of the simplest and the most user-friendly platforms available with comprehensive tutorials, guides, and videos everywhere online. Customer support is also very accessible for anyone who needs it.
Shopify is also known for its plethora of storefront designs. No matter your niche offering, there is always something that matches you.
According to Shopify’s figures, many dropshippers can stack up to USD100,000 in sales per year. As long as you find the right market and supplier, you can also generate USD1,000 to USD2,0000 per month within 12 months by working around 10-15 hours per week.
Two main types of dropshipping business models offer different returns. First, the low-ticket dropshipping method is designed for large quantities of low-cost products. While it can be very profitable, it often only generates short-term income as customers are unlikely to return, and products have short lifespans. Conversely, high-ticket dropshipping focuses on delivering superior quality to a dedicated consumer base. While it takes more time and effort to build, the results are more sustainable as you build a loyal fanbase with evergreen products.
Usually, dropshippers make around 20% or 30% of the profit from each sale. This number can stack up to around USD100,000 per year on average, or USD1,000 to USD5,000 per month. The usual expenses include products, overhead fees, and your usual Shopify fees. An important note here would be that high-quality products usually have a higher dropshipping profit margin despite selling fewer products and vice versa. Hence, sellers need to make their decision based on the amount of time that they are willing to contribute and the objective of their business.
Besides, if you were to run a business that will be predominantly online, it would be crucial to include the online ad budget into your regular and overhead costs. On average, a cost per click ad on Google is worth USD1-2, and each campaign usually generates 1-3 sales for every 100 clicks. So that’s something to take into account.
Discover your brand persona, find the voice for your business, and begin your dropshipping journey.
Step 1: Choose a dropshipping business idea
Find the direction or niche that fits you. It can be delivering the best products to a dedicated market, or pushing out mass-produced products.
Step 2: Do competitive research
Before committing to dropshipping, check whether your idea is profitable and what your competitors are doing.
Step 3: Sign up for Shopify
Get on the platform to sign up for an account, then start building your dropshipping business.
Step 4: Choose your dropshipping apps
There are different apps specifically designed for dropshipping on Shopify. Enable them and see which ones work for you.
Step 5: Choose a dropshipping supplier
AliExpress is usually dropshippers’ favourite, but there are still different choices in the market. You can also rely on apps like DSers to help you.
Step 6: Build your eCommerce store
Shopify has a ton of customisable storefronts. Choose one that fits you, and then tweak it to your liking.
Step 7: Get your finances in order
Step 8: Market your dropshipping store
Get the message out. Start placing ads and creating content, but don’t forget the captivating visuals and videos.
Step 9: Analyse and improve your offering
Keep an eye on the numbers and see what’s working, and what isn’t, notice the time period when sales peak, and whether the earnings are coming in the way they should
. It always pays to be prepared.
While it is true that dropshipping can work for any product with the virtually unlimited choices and sources out there, some categories are a hit right now. One thing in common is that they’re all readily available from different suppliers and manufacturers, so there’s no need to keep inventory on your own. Let’s take a look at the most desired categories!
Health and personal care
Despite the drop in COVID-19 cases worldwide, customers are now accustomed to buying personal care products online. We can expect that this trend will continue for the time being.
Kitchen and grocery
Consumers’ change in preferences doesn’t end with personal care. Kitchen appliances and non-perishable groceries are also their favourites.
Did you know that gaming hardware is in great demand? Things like headsets, monitors, mousepads and even chairs are well sought-after.
Fashion and accessories
Imagine selling all pieces of fashion statements online. There are thousands of choices online for all kinds of people, readily available from different sources. They can be the perfect choice for your dropshipping ambition.
There is no definite way to find the right Shopify dropshipping products. Instead, there are many methods to do your research.
Generally, you can start by using Google Trends to see what’s trending or identify any top niches with high potential. If you’re pursuing the mass market approach, you can dropship what’s high in demand with generally lower marketing fees. Or, if you’re catering to a niche audience, you may want to spend more time on online marketing and SEO.
Besides search engine tools, social media hashtags are also a good indicator of what people are after. You can leverage that on platforms like Instagram or Tiktok and see which posts have the most engagement or draw the most excitement.
Not a fan of research? You can use product research tools like Sell the Trend and let them evaluate an item’s potential.
If you think dropshipping on Shopify is something you want, here are our top four picks for suppliers.
Spocket enables retailers to start and scale their online stores with thousands of suppliers from the US and Europe.
Probably the largest merchant marketing, AliExpress has everything you need at slashed prices.
Like AliExpress, Taobao offers retailers access to thousands of merchants and millions of goods. However, their website is Mandarin-based, so you can either use Google Translate or get some help on the translation to ease the process.
SaleHoo is a directory that connects dropshippers to suppliers and is particularly suitable for various niches. Find a selection that serves you best!
If you decide that dropshipping is for you, why not start early? Here are our three tips for success.
Social advertising and marketing
Firstly, having the message out is key. Marketing and driving traffic are fundamental to your online business’ success, so every bit of touchpoint counts. Take time to develop your SEO strategy, place ads and get active on social media. Spend time interacting with your customers as if you’re a sales associate at a physical store.
Building customer relationships
Secondly, you can consider building a long-term relationship with your customers. Small details in the customer experiences, like being clear on shipping times and product origins, making the page easy to navigate or maintaining product quality, can go a long way. Also, take care of each of the details of the store. These include product descriptions, photos and videos, and be helpful to your customers. In a hypercompetitive market, it does take real effort to stand out from the crowd.
Streamlining your workflow with automation
Last but not least, you’ll need a platform to automate the nitty-gritty tasks of your eCommerce store. Platforms like SleekFlow can easily integrate with Shopify and boost your level of convenience in running your site. You can synchronise all customer information, segment them by categories, view important metrics to evaluate success and interact with them via WhatsApp.
Nutrition Kitchen utilised SleekFlow to boost their e-commerce sales. Read to find out more about their strategy.
By adding a human touch and streamlining your operations, you can provide the same outstanding customer experience you’d expect from a physical store. In a low-cost, highly-competitive environment, the little things can wow your customers and ensure your success.
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