A Guide to Dropshipping with Shopify

Dropshipping with Shopify 📦

For those of you who are new to the term, ‘dropshipping’ is a business model that allows merchants to start an online business and sell products to customers without having to stock the items themselves.

So, where are products stocked? When a dropshipping store sells a product, the business purchases the product(s) from a third party. The items are then shipped directly to the customer.

We Love Dropshipping

Here at Karmoon, we think that dropshipping provides a lower-risk approach when independent businesses want to test new product ideas (and product lines) without having to own the product themselves or pay for it upfront. So, essentially, merchants pay the wholesale price to the supplier, while controlling the price that the customer sees on Shopify. It’s that simple.

One thing that we love about dropshipping is that merchants do not need to spend time ordering products from different suppliers to judge the quality for themselves, which ultimately saves the business both time and money. It’s a win-win situation.

Chosen suppliers could be; manufacturers, warehouses, or even family members who make products from their homes. With Shopify, it's easy to find suppliers through; print-on-demand apps, dropshipping apps and Oberlo (but we’ll get to this guy later).

Additionally, dropshipping is a business model that allows many business-minded individuals to participate in entrepreneurship. If that sounds like something you might be interested in, check out Shopify’s guide on how to start a business.

More often than not, entrepreneurs have to spend a significant sum of money on inventory before they can start selling and these costs can feel restrictive. Shopify is eager to provide a solution and while Shopify Capital has the power to help businesses achieve the funds they need when they need them, dropshipping remains a highly accessible way for enterprising founders to connect customers with products on-demand.

On the whole, products are the most important aspect of a dropshipping business, as the products that are chosen will shape the running of an online store, alongside how that store is marketed and who it is marketed to.

Before you try out dropshipping with Shopify for yourself, we would recommend taking the time to understand how it works, its features, the drawbacks and the process that product orders go through. Just keep reading and our guide to dropshipping with Shopify will reveal all:

How Does Dropshipping Work? 🤔

Step 1: The customer will place an order from your online store.

Step 2: Your store will automatically send the order to the dropshipping supplier.

Step 3: Your dropshipping supplier will prepare the customer’s order.

Step 4: Your dropshipping supplier will ship the order directly to your customer.

Prepare your Store for Dropshipping with Shopify

If there’s one thing that you should know about dropshipping it is that it suits nearly every business size. For instance, it can be used to help a one-man brand or run a multi-million dollar enterprise. However, even though the method for running an online business is the same, the amount of preparation for each type of business will vary greatly.

The end goal for a dropshipping business will be determined by the amount of setup required. If your business’ goal is to explore entrepreneurship and financial success is your secondary goal, then there are fewer steps that your business will need to take. Nonetheless, if your goal is to have a business that eventually becomes your full-time job, then you will need to make sure that you're setting up the business sufficiently for long-term success.

If you’re curious about how to start drop-shipping but need a little advice on how to prepare your finances or how to invest in your business, you can hear it from the horse’s mouth as the Shopify help centre has got you covered.

How To Start Drop Shipping: Creating Product Lines 👚

The group of products that a business sells is referred to as the ‘product line’. Merchants can choose a product line in many ways, but when a business first starts, store owners tend to have an idea of the theme that they would like to find products for.

Other businesses know exactly what products they would like to sell, but don’t have a clue of where to source them from and some businesses don't yet know what to sell, but that’s okay.

Regardless of your position, when you’re just starting, it's important to choose the right suppliers and the right products to sell.

How To Start Drop Shipping: The Product Selection Process

With so many products available for dropshipping, it can be difficult for merchants to decide which products are the right ones to sell. It should be understood that there are no right or wrong items for a business to select, however choosing the right products that work well within a business and its product line can largely influence the chance of success.

How To Start Drop Shipping: Product Selection Methods 📝

Supplier Reputation: Having a method for how your business will approach the task of searching for products to sell can help largely with the overall process and success of your store’s dropshipping journey. We would suggest that merchants consider all of the options available to them by reviewing the following methods below to see which ones would best suit your business, considering supplier reputation.

Single Supplier: If products can be sourced and selected from a single supplier, it will be easier to keep shipping costs low, which means that customers will be able to be charged more accurate shipping rates based on market trends.

Market Trends: Researching market trends can take time, but it will be well worth the investment. However, this method will require merchants to change their product line frequently while continually researching the latest trends. If implemented correctly, this approach can be extremely profitable for the business at hand so, it’s down to the brand to decide if this is the right route for them to take.

Pains & Problems: Curating a product line that solves pains and problems for the customer is a fantastic way to position a product line. Every successful business knows that a problem solved keeps customers coming back for more.

Audience Demographic: For those of you who are new to all of this and want to learn how to start dropshipping successfully, one of the most important factors of your strategy should revolve around research.

Researching the specific demographic of people that would be an ideal target audience for your business will allow you to have data that can be analysed. From this information, merchants will be able to determine which products are a good fit for their product line(s).

Would You Buy It?: If you think you’ve found a product that would be the perfect fit for your business, its product line and the target market, ask yourself the following question - “Would I buy it?”. If the answer is yes, others would likely buy them, too.

Choosing products based on what you like also makes it easier to write marketing content for the products, such as; product reviews and instructional blogs. So, keep this in mind, because if a product doesn’t spark interest, it’ll show throughout your marketing outlets and copy.

How To Start Drop Shipping: Product Selection

After a method for product selection has been chosen alongside a product line theme, merchants can begin to search for specific products to add to their Shopify store. It can help to add products that have the following:

High ratings

Positive reviews

High-quality imagery

Great descriptions

Free shipping

Affordable costs

After a business begins to make sales, merchants can adjust the product line to match customer feedback, alongside following or creating new trends in the industry to encourage customers to return to your store to see what is new.

Product Pricing Strategy 💰

When pricing products, merchants should consider:

The Extra Value Provided: Building a business takes time, effort and money. Any content created, unique combinations of products discovered, or extra customer support offered all plays a role in increasing the value of a business. Simply put, the resources that are invested and the additional values provided should be reflected in the pricing of your products.

Expenses & Business Costs: Further expenditures such as; marketing costs, Shopify subscriptions and transaction fees should be considered when product prices are set. As these are necessary business costs, the product price must cover these costs at the very least.

Competitor Prices: We would recommend taking a look at online stores in your niche that sell similar products to your business to help you determine who’s offering their customers the best price.

For additional information on how to set prices for a product line, click the link provided.

Naturally, there are different shipping strategies for dropshipping too which include; free shipping, a single flat shipping rate, tiered flat rates, per-item shipping rates and advanced shipping rates but it’s down to you to choose the best option for your business.

Dropshipping with Shopify: Oberlo

You’ve read this guide, you’ve done the research and you’ve got the info, so now it’s time to take action. Oberlo is the dropshipping app made by Shopify that allows merchants to source products from AliExpress suppliers.

With Oberlo, Shopify stores can import products with ease whilst being able to edit product listings and place orders (individually or in bulk). After merchants have made a scale within their online store, they will then be able to go on and place product orders from the supplier.

It is ultimately the role of the supplier to ship these products directly to the customer for the merchant. As a result, Shopify stores will no longer need to; store, package or ship products themselves, that responsibility now lies with the supplier.

Ready to start dropshipping with Shopify? Install Oberlo via the Shopify App Store free of charge.

If you were on the fence before now, has this article persuaded you to start dropshipping with Shopify? For the businesses out there who are considering the move to Shopify, get started with a free trial and test the water.

If you need a Shopify agency designer or developer to assist you with your business, we’d love to hear from you. Drop us an email to get started!