A Guide To Shopify Dropshipping

A Guide To Shopify Dropshipping

Shopify dropshipping is a great way to start an eCommerce business from scratch. For start-ups and new businesses, breaking into the eCommerce market can be a real challenge and finding where to start can be just as hard. The most difficult part of starting a new business is managing your time money and inventory as it can quickly become a nightmare to manage. It is most likely that it will take a while for a start-up or new business to even make a profit.

However, with Shopify dropshipping, a lot of the burden is lifted off of your shoulders. The dropshipping model allows businesses and start-ups to focus on their growth and resources, as opposed to the development and deployment of products. Shopify is just one platform you can do this on but it is very reliable and has proven to provide growth for online businesses.

But what is dropshipping? And how do you even get started with dropshipping on Shopify?

What is the definition of dropshipping?

Dropshipping is a flexible business model that allows start-ups and new businesses to sell their products without the hassle of carrying any of the inventory. The great thing about dropshipping is that it is a low investment strategy, so your initial business cost is reduced. A dropshipping platform such as Shopify will source the products you wish to sell, stock them in their warehouses and then ship the products right to the front door of your customers. It’s easy, simple and flexible. 

Because of the way dropshipping works, it gives businesses the time to focus on other priorities like maximising growth opportunities and bringing in new customers. It is such a flexible model that it reduces your overall management time and you can even run a dropshipping business in your spare time and still make a profit. But what exactly is Shopify? And why should it be used for dropshipping?

What is Shopify?

Shopify is an online commerce platform for new businesses wanting to expand, grow and easily manage their business from one single place. They create bespoke features for each of their online eCommerce businesses with their team of experts to help shape your online business. This of course comes with the added benefit of dropshipping through Shopify as well. 

 What does Shopify do?

Shopify unifies all your eCommerce features into one platform allowing you to fully manage your business through one online platform. It’s also a cloud-based service meaning that you can access it from any device so, you can run your business from anywhere.

Using Shopify merchants, you can create and customize your online store, and sell over a variety of platforms. They even help to design pop-up shops, as well as access to sell over a variety of social media channels and buying platforms.

Why use Shopify for Dropshipping?

As mentioned previously, Shopify dropshipping is a great way to get started as an eCommerce business. You can set up your company with very little upfront cost and it’s a simple platform to use as well making the day-to-day running of your business easiest than setting it up from scratch.

Unlike other dropshipping methods like white label and private label dropshipping, Shopify allows you to only order what you need, so you don’t have to deal with overstocking your products. Most white label and private label dropshippers have maximum and minimum order quantities, but this isn’t the case with Shopify. This makes it easy to cope with customer demand without having an abundance of stock left over. The best thing about it, however, is how easy it is to manage your sales, costs and inventory.

What are the pros and cons of Shopify Dropshipping?

Although Shopify dropshipping is a great way to kickstart your business, it isn’t perfect. It’s great for some eCommerce businesses, but there are still some issues you can run into it when using it. Here are the pros and cons of Shopify dropshipping for you to decide if it’s the right business model for you.

Pros

Here are the Pros of Shopify dropshipping:

  • Small initial investment – One of the best things about dropshipping with Shopify, is that you do not need to make a huge initial investment to get your business up and running. This is because you don’t have to purchase inventory or pay for a warehouse for your stock. You only pay for the products you need as well, not having minimum or maximum order requirements.
  • Easy to manage – Shopify dropshipping takes care of all of your inventory, storage, shipping and site maintenance, so you don’t have to. This frees you up to focus on marketing your products and help bring customers to your business.
  • Sell a wide range of products – Shopify has thousands of products that you can start to dropship to your customers. Meaning you can provide your customers with a variety of products to choose from.
  • Scaleable – Since you do not have to manage your inventory, storage, shipping and site maintenance through Shopify. It makes it easier to expand your business and encourage growth. You can add more and more products to your inventory as demand increases to grow and sustain your eCommerce business.

Cons

  • Low-profit margins – Due to the low set-up costs of setting up dropshipping, this means that of course, many people are using it. Therefore, competitors tend to set prices very low for products and to stay competitive you have to do the same.
  • Issues with your supplier – Since you have to manage how much stock you need to get to your customers you are in a sense at the mercy of suppliers. Most likely they will also sell to hundreds of retailers so if there is an issue with the supply chain, this could result in longer waiting times and cause issues to your inventory. However, you could always source from many suppliers to avoid this.
  • Customer Service – If you run into any challenges with dropshipping such as selling out-of-stock inventory, incorrect products delivered to customers, shipments that arrive late, damaged products, etc. You will have to be responsible for communicating with customers to find solutions and help them with the products they need which can be a lot of extra work.
  • Shipping costs – You could be sourcing multiple products from lots of different suppliers all with their own shipping costs. This could then become complicated and pricey when getting orders for multiple products. You will have to pay the shipping costs for each product that you order which could rack up your costs as the consumer is buying solely from you and not your suppliers.

Exchanging ecommerce businesses

With Shopify, you don’t even need to set your business up at all but inherit one from someone else. Through their exchange feature, you can purchase an online business from someone who no longer wants to continue dropshipping. S)o instead of setting up a brand-new Shopify store yourself, it can be much easier to exchange a store which has everything you require already in place.

The good thing about the Shopify exchange marketplace is that companies have a legal requirement on their to be transparent with their sales, revenue, store age, business type and any data from the previous store. This also removes a lot of the financial risk of starting your store or being ripped off by someone else.

A step-by-step guide to getting started with Shopify

If you are wanting to set up your own online Shopify store to start dropshipping, there are a few steps you need to follow first. Here is our simple step-by-step guide for getting started with Shopify.

Picking a brand/store name

The first thing you need to do to start your Shopify dropshipping store is obviously to come up with a name. This is a really important part of the process but coming up with a name for your store can be difficult. Just remember to make a good Shopify store name, you need to make it recognisable, get creative with the name and don’t make it too complicated.

You should thoroughly brainstorm name ideas so that you get the perfect one for you. However, if you struggle to come up with an original name, you can use this brilliant business name generator to try to find your perfect name if you struggle to come up with your own. 

Make sure you fully check that your business name is unique before you go any further. Search Google for all domain names of your business and make sure they don’t appear elsewhere.

Create an account

Now you have decided on the name of your online Shopify store it’s time to set up your business account. Luckily it is a very quick and easy process to follow. Just go onto the Shopify website and click ‘start free trial’. 

Enter your business email address in the email field then make a secure password. Finally, it’s time to create your Shopify store name. Now you have everything set up you will just have to answer a few questions on your eCommerce and business experience and a few other details. Now you have created your online store you will need to optimise your settings.

Adjust settings to your own preferences

Configuring your settings to your business preferences is an essential part of your Shopify business set-up. You can set your store policies, your shipping rates and your payment structure. 

Payment structure 

The first thing you should configure is your payment structure for customers. How can you bring in revenue if customers cannot buy products from your online store? To add this to your Shopify account, select the payments tab and add your payment information.

PayPal is the most popular payment option on Shopify as it’s easy to set up and receive transactions from customers. Feel free to use any others, but we would recommend using PayPal if it is your first time setting up an account.

Setting Shipping Rates

As a standard, we would recommend that you always promote free shipping to your customers as this is the easiest option on Shopify. It also helps keep your shipping cost straightforward, especially if you are sourcing products from many regions.

It is common practice to offer free shipping but raise the cost of your products to match shipping costs whilst still advertising free shipping. To set this up go to the shipping section in your Shopify settings. Get rid of all domestic shipping zones and replace them with free international shipping to the rest of the world section. Then select the free shipping rate and voilà, you are set.

Store Policies

You will also need to set up some store policies for your business. Luckily, Shopify has some great tools that you can use to create them. They can automatically generate all the necessary policies you need without you having to lift a finger.

Go to your Shopify settings and click on the checkout tab, then scroll down and complete the relevant fields to your business. Click generate and now all your store policies have been created.

Launch your online store

Now all the key sections of your online Shopify store have been completed, you are ready to officially launch your new Shopify business. Visit the sales channels tab in your Shopify admin dashboard. Then add your store to make it live.

Now that your Shopify store is ready, you can start to dropship!

Design your online store

Now you need to design the layout and theme of your Shopify store. The Shopify platform has a great array of tools for you to design your store website and even create a logo for your company. 

Having an eye-pleasing website design and logo will help you to create a successful brand through your marketing and to entice customers to purchase goods from your store. Design your eCommerce store with this in mind, what do your users/customers want from your store and how can you quickly and easily provide it for them. 

Shopify allows you to pick from thousands of themes for your website, so pick the one which resonates the most with you and will resonate with your customers. There are free and premium options as well, depending on how much you would like to invest in your store. 

Shopify also has a logo generator for branding if you don’t have the time to create your own. If you do create your logo, it would be more bespoke and in tune with your vision of the brand. 

Now you have your site and logo sorted. Now is the time to start building your business and dropshipping with Shopify. Find the products you want to dropship and sell on your store and start generating revenue!

How profitable is Shopify dropshipping?

Dropshipping through Shopify can be very profitable depending on how you decide to run your business as well as the effectiveness of your marketing strategy. Dropshippers who have been around for a while and have fully established themselves have the potential to earn around £100,000 a month.

Since Shopify stores cost very little initial investment and are very scaleable. You should aim to try to make 3x your annual salary as a starting point. However, patience is key and you could make up to £3000 a month with the right business and products.

It’s fair to say that dropshipping with Shopify is very profitable if executed in the right way over an extended period. In other words, you get out what you put in it.

Dropshipping with Honest Fulphilmnet

At Honest Fulphilment, we can fulfil all of your eCommerce dropshipping needs whether it is for product photos and videos, or your eCommerce shop, we have you covered. We provide extensive products and services that help you set up your online store, provide warehouses for stock, provide shipping and delivery services and inventory management.

Discover how we can help you set up your dropshipping business today and check out our:

eCommerce dropshipping app 

Dropshipping product photos and videos

For more information on dropshipping, check out our guide to private and white-label dropshipping.