Understanding Shopify Dropshipping: The Best Guide in 2021

on Data Driven, Data Driven Strategies, Digital Marketing, e-commerce, Marketing, Marketing Dashboards, Sales, Shopify, Shopify App Store, Tutorials • October 19th, 2021 • Write for Hevo

Shopify is a popular E-Commerce platform that allows businesses and individuals to sell their goods and services online. It accounts for more than 20% of the market share. Shopify’s cost makes it accessible to everyone, from start-ups to established businesses. Shopify Apps have such a significant impact on merchants that 85% say they rely on them to run their operations. To date, thousands of Shopify Apps have been created to help merchants establish businesses, sell more, scale more, and save time. 

Entrepreneurs sometimes feel constrained by the costs to manage manufacturing, supply chains, and fulfillment, since they must spend a considerable amount of money on inventory before they can begin selling. Dropshipping could be a terrific choice for you if you want to get into the E-Commerce industry but do not have the means to. Dropshipping is a flexible method to manage your business, and it’s supported by the majority of the leading E-Commerce platforms, including Shopify.

This article will provide you with a glimpse into the world of Shopify Dropshipping. You will understand what exactly is Shopify Dropshipping and how does it work. In addition, you will learn the various types and key features of Shopify Dropshipping. Moreover, you will understand the steps to set up a Shopify Dropshipping service. At the end of this article, you will unravel key strategies to overcome the challenges faced while Dropshipping. You will also explore the best Shopify Dropshipping Suppliers. So, buckle up yourself to take a journey through the world of Shopify Dropshipping.

Table of Contents

Introduction to Shopify

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Shopify is a Cloud-based platform with both a shopping cart and an online store. It allows enterprises to set up an online store fast and efficiently. Shopify has become a household name for all-in-one E-Commerce solutions, with over 1 million businesses using the platform in over 100 countries. Because of its minimal running costs and user-friendly interface, Shopify is preferred by many E-Commerce businesses.

Shopify prioritizes customer service. They are available 24/7 through phone, E-Mail, or webchat. Furthermore, all of Shopify’s themes are mobile responsive, and the platform includes a free built-in mobile commerce shopping cart, ensuring that your store looks great on any device and that your customers can shop from anywhere.

Shopify lets you sell a wide range of goods and services, including:

  • Physical Products: For items you’ve manufactured that can be delivered to a customer, Shopify offers door-to-door delivery. Printed mugs and t-shirts, as well as jewelry and presents, are among the items available.
  • Digital Products: These include e-books, audio, course materials, and more.
  • Services and Consultation: Services like home-cooked meals, event planning, or anything else may be offered on Shopify.
  • Memberships: Various memberships such as yoga-classes membership, event membership, etc. can be sold to the customers.
  • Experiences: Tickets for activities and hands-on workshops, such as sports and travel adventures, mountain trekking events can also be sold through Shopify.
  • Rentals: If you provide rental services such as apartment rentals, taxi rentals, or gadget rentals, Shopify allows you to post advertisements and communicate with clients.

To unravel other features and benefits of Shopify, you can visit the homepage here.

Introduction to Shopify Dropshipping

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Dropshipping is a method of selling products without having to store the inventory yourself. Dropshipping is used by a lot of Shopify firms, partially because it’s simple to set up. Dropshipping is a business strategy that allows entrepreneurs to launch an online business and sell products to customers without ever having to physically stock the items. When a Dropshipping store offers a product, it buys it from a third party and has it supplied to the client directly. As a result, the seller is relieved of direct product handling.

The most significant distinction between Dropshipping and Traditional Retail is that the selling merchant does not own or stock inventory. Instead, the seller fulfills orders by purchasing goods from a third party—usually a Wholesaler or Manufacturer—as needed. So, Merchants can say goodbye to their inconvenient inventory management system with the Shopify Dropshipping Integration.

Understand Working of Shopify Dropshipping

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Dropshipping is an excellent business model for new entrepreneurs to start with because it is simple to implement. It enables you to swiftly test several company ideas with little risk, allowing you to learn a lot about how to select and promote in-demand products.

Let’s first understand the key players in the Dropshipping supply chain:

  • Manufacturer: The product is created by Manufacturers, and the majority of them do not sell to the general public. Instead, they offer Wholesalers and Retailers in bulk.
  • Wholesalers: Wholesalers purchase things in bulk from Manufacturers, mark them up significantly, and then resell them to Retailers for the public.
  • Retailers: A Retailer is someone who sells things to the general public at a profit.

It’s worth noting that “Dropshipper” isn’t listed among the supply chain’s participants because any one of the three—Manufacturer, Wholesaler, or Retailer—can Drop Ship!

Let’s take a look at how a drop shipped order is processed now that you know who’s involved. 

Step 1: Customer places an order with the outlet and the payment is captured during the checkout process. 

Step 2: The store places the customer’s order with its supplier. The Wholesale team has a credit card on file for the outlet, which will be charged for the wholesale price of the products, plus any shipping or processing fees.

Step 3: If the item is in stock, the Wholesale store ships the order directly to the customer.

Step 4: The outlet alerts the customer of shipment via email or another channel.

For the end-user, the Wholesaler does not exist. Its main function is to stock and ship Dropshipping merchandise. The Merchant is responsible for everything else, including Marketing, Website Development, and Customer Service.

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Key Features of Shopify Dropshipping

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A variety of E-Commerce platforms can power your Dropshipping business, but Shopify remains one of the most popular platforms for Merchants. This is due to the amazing features offered by Shopify Dropshipping. A few key features are listed below:

  • Dropshipper-Friendly: One of the best aspects of Shopify is that the platform is well-suited to integrate Dropshipping. For example, Oberlo is a Dropshipping app that integrates exclusively with Shopify.
  • All-in-One: Shopify has a lot of options that can help you start an online store. It provides services to manage your Sales, Marketing, and Payments in addition to its online store builder, which allows you to design and set up your site.
  • Easy to Use: Shopify is one of the most user-friendly E-Commerce platforms available. It has a lot of features and functions, yet it doesn’t grow too complicated. The company does an outstanding job of explaining how to use its software to Retailers.

Types of Shopify Dropshipping

Dropshipping is a very broad term and hence, it is important to understand the wide range of Dropshipping scenarios. Some of the types of Dropshipping are listed below:

1) Product Reselling

The most popular sort of Dropshipping is when a company collects products from a range of suppliers and offers them all in one spot for online purchase. These companies make it simpler for the general public to locate and purchase these items. 

People who are strong at Marketing or have a thorough understanding of a particular sector or niche will benefit from this form of Dropshipping. If you can come up with original Marketing concepts for your firm, you’ll have a better chance of succeeding with Product Reselling.

2) Business Extensions

Many people don’t have the time, money, or experience to put their business online, even if they want to. Some Dropshipping companies prefer to partner with these enterprises and take on the role of their online presence. When the Dropshipping company makes a sale, they request that the item be shipped to the consumer by the retailer.

Business Extensions works well in smaller cities where businesses are more likely to consider expanding their market, however, it’s quite difficult in rural areas. As you must create a strong relationship with the Retailer, this sort of Dropshipping necessitates more effort.

3) Product Creation

Many Dropshipping businesses prefer to bundle or combine products and sell them as a single product. It can be tough to create new items by mixing old ones, and it necessitates a certain amount of imagination. It’s better to make new items using products that come from a single supplier that bundles all of the products in the same order.

4) Print On Demand

Print on Demand is a sort of Dropshipping in which a business deals with printing and wishes to sell products with text or images printed on them. Mugs, pet food bowls, and T-shirts are just a few of the things that most printing firms provide. Print-on-demand Dropshipping may be a suitable fit if you have access to a certain set of people who share a shared interest.

Steps to Set Up Shopify Dropshipping

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Two of the most frequent ways to Dropship on Shopify are to use Supplier Databases to find a supplier in North America or elsewhere in the world, or to use a Shopify App that connects you and your business to thousands of suppliers. Follow the steps below to set up your Shopify Dropshipping store.

Step 1: Define your Product

You must first self-analyze your product before beginning to build your Shopify Dropshipping store. You must select the appropriate product, name it, and conduct market research. The following are some of the points you should consider before moving on to Step 2.

  • Choose a Product: The first step in starting your Shopify Dropshipping store is to decide what you’ll sell. To check if your products are in demand, look at Amazon Best Sellers and Google Trends. Calculate your potential margins by comparing pricing on AliExpress and other prominent marketplaces like Amazon.
  • Define the Target Audience: The next step is to determine who is most likely to buy your stuff. Determining your target audience will assist you in determining what motivates individuals to buy from you, as well as their anxieties and challenges, and how your products may address them.
  • Choose your Store’s Name: Keep the name of your store simple, unique, and creative. Create a name that isn’t too difficult to recall or too long.

Step 2: Create your Shopify Account

If you haven’t created a Shopify Account before, you can do so by signing up for a new account at this link. You can also try the 14-Day free trial, in case you want to experience the Shopify account, before actually buying the plan.

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Step 3: Customize your Shopify Store

When you log into your Shopify account, you’ll find three options for adding and customizing your Shopify Dropshipping store. The three options are as follows:

1) Add Products

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You may add products to your Shopify Dropshipping store in a variety of ways. Some of the options are:

  • Use a CSV file to import your product catalog.
  • Upload your items in bulk.
  • Upload your products individually.

After adding the products you need to connect your Shopify account to one of the Dropshipping suppliers. Next, fill in the product details like title and description. If you haven’t found your suppliers yet, you can also check the best Shopify Dropshipping suppliers at the end of the article.

2) Customize Theme

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Over 100 free and premium themes are available on Shopify. You can look through them by industry to see which ones are the ideal fit for your company. You can also tweak each theme to meet your specific requirements by adding or removing content sections. Moreover, you can fine-tune your store even more if you know how to code.

3) Add a Custom Domain

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Your store’s default name will be -store-name.myshopify.com. You have the option of purchasing a domain from Shopify or adding a third-party domain. It’s also possible to link an existing domain.

Step 4: Set Up Payment

It is critical to ensure that customers can properly pay for their orders. To change these payment options, go back to your Shopify dashboard’s left-hand menu and click “Settings” and then “Payment Providers“. You can choose which payment providers you want to use in this section. Here are some of Shopify’s payment options:

  • Shopify Payments
  • PayPal
  • Amazon Pay
  • Bitcoin

You’ll also need to add refund policies, terms of service, and shipping policies.

Step 5: Market your Shopify Dropshipping Store

When creating your Dropshipping store strategy, you may want to put an extra effort into your Marketing and promotion to stand out in your industry. Let’s look at the various Sales and Marketing channels:

  • Paid Ads: You can use Google Shopping Ads to target long-tail keywords where customers are more likely to purchase. Facebook Ads are scalable and they appeal to people’s desire to buy on the spur of the moment. 
  • Influencer Marketing: As a novice Dropshipper, you may only have a small Marketing budget. Because people trust influencers more than traditional Advertising, influencer Marketing is a cost-effective strategy to reach your target demographic.
  • Content Marketing: Add content Marketing to your Dropshipping business plan if you want to establish a long-term source of visitors for your store. Create content that entertains and educates your target audience by starting a blog dedicated to your Dropshipping niche. To assist spread the word about your brand, you may launch a YouTube channel, make infographics, or start a podcast.
  • Communities: Join communities of people who are enthusiastic about your niche such as Reddit, Facebook Groups, and online forums to initiate discussions with potential customers.
  • Mobile Marketing: Mobile Marketing is a broad phrase that relates to a company’s use of mobile phones to communicate with customers. To promote Sales and revenue for your Dropshipping business, you may use a mobile Marketing platform to create automated Lead Generation, Customer Retention, and Cart Abandonment Campaigns.

Hurray!! You have finally understood the steps to set up your Shopify Dropshipping Store

Strategies to Overcome Challenges Faced with Shopify Dropshipping

While it is possible to send products to your clients from all over the world, shipping times may be affected depending on how far away your supplier is. Shipping times can make a big impact on your small business’s success.  So, it’s important to overcome the drawbacks to use Shopify Dropshipping to your advantage. Some of the strategies are listed below:

Strategy 1: Choose Products Wisely

It might be tough to choose products for your product line, which is why some businesses try to sell as many different things as they can. In addition, it can be quite difficult to build a business brand around selling every product imaginable. Moreover, it’s unlikely that you’ll be able to match every customer’s expectations because there are already established marketplaces on the internet where you can locate a wide range of products. So, first, do market research using keywords and other techniques to select the best product to grow your business.

Strategy 2: Choose Suppliers Wisely

Suppliers are in charge of a significant portion of your organization. This indicates that the quality of your supplier has an impact on the quality of your company. If a consumer has a bad experience with your company, they are reluctant to order from you again, even if the problem is caused by your supplier rather than you.

You should research potential suppliers’ ratings, policies, and speak with them to determine their quality. Working with trusted suppliers guarantees that you supply high-quality products, that your orders are processed swiftly, and that no unnecessary branding is added to your orders. The best Shopify Dropshipping Suppliers will be explored at the end of this post for your benefit.

Strategy 3: Order Some Products to Your Location

While one of the advantages of Dropshipping is that your supplier handles inventory, there are a few reasons why you should consider ordering a few products and having them delivered to your location:

  • Assess the Products’ Quality: Product reviews can help you determine a product’s quality, but you won’t know for sure unless you see it for yourself. You may also view the product’s packaging and whether the supplier has included any promotional materials.
  • Ship Bulk Orders Yourself: You must pay each supplier a shipping fee if a customer orders merchandise from numerous providers. If you already own such items, you can combine them into a single box and charge only one shipping fee to deliver them to your consumer. If you plan to employ this method, contacting your supplier to see if they can provide you with free shipping when ordering things for yourself is an excellent idea.
  • Put Yourself in Customer’s Shoes: You should examine what your clients go through when they order from your store. Knowing how soon your suppliers handle orders might help you establish the right expectations for your customers in your order notification emails.

Unravel the Best Shopify Dropshipping Wholesalers

To use Shopify Dropshipping at the best you need to have good suppliers that provide quality service to your customers. For your ECommerce store, the best vendors for Shopify Dropshipping are listed below:

1) Oberlo

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Oberlo is a Dropshipping tool that makes it simple to select products to sell in your Shopify store from AliExpress. It is Shopify’s greatest free Dropshipping supplier directory. The site features over 30,000 of the finest dropshipping products from sellers all around the world in 60+ specialized categories. Oberlo has a free sign-up option, with paid plans starting at $29.99 per month.

2) SupplyMeDirect

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SupplyMeDirect is one of the Dropshipping Wholesalers that can help you grow. To sell branded products and maximize earnings, the app provides private labeling and trustworthy sourcing. It’s a free Shopify app with a dedicated support team available 24 hours a day, 7 days a week. For the US, UK, and European markets, it is the top private label Dropshipping supplier.

3) CROV

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CROV provides merchants with a diverse choice of products from a pre-screened list of Dropshipping wholesalers in the United States. This is a free Shopify app for adding items to your business and automating orders. CROV offers 35,000+ items from selected vendors in 20+ different trending areas. It is recommended for Shopify, Amazon, and eBay retailers who want to market distinctive products.

To explore other Shopify Dropshipping suppliers, you can visit Where to Find the Best Dropshipping Suppliers

Conclusion

In this article, you gained a basic understanding of Shopify and Dropshipping. You explored the key features, types, and working of Shopify Dropshipping. In addition, you learned the steps to set up Shopify Dropshipping. Moreover, you understood the various strategies to overcome the challenges while Dropshipping. At the end of this article, you unraveled the best vendors for Shopify Dropshipping.

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Share your experience with Shopify Dropshipping in the comments section below!

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