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Originally Posted On: How To Do Dropshipping on Shopify: A Simplified Guide – shopandcode
Are you an entrepreneur looking to get started with e-commerce? If so, then you probably lack the funds to invest in your inventory. If this sounds like you, dropshipping is a fantastic option that you can use to get started selling products. It’s a unique business model that lets you use a third party to manage your inventory and shipping. It’s a low-risk way to try out new products and ideas without going broke. Shopify is one of the best platforms you can use for dropshipping, and there are many reasons why.
If you’re new to dropshipping, then this guide is for you. We’re going to break down how to get started using Shopify for dropshipping. That way, you can get started making money using the platform as soon as possible. Here’s a list of steps on how to do dropshipping on Shopify.
What Is Dropshipping On Shopify?
The dropshipping business model tends to confuse people at times. Here’s a simple definition:
- Dropshipping allows you to fulfill orders without keeping any inventory. A third party maintains your products and ships them to customers.
That’s dropshipping in a nutshell. It’s a way to get started as an entrepreneur without keeping your inventory. You see, a majority of expenses that new businesses incur are due to inventory and shipping. These costs can be very restrictive for a startup, and they lead many companies to fail.
With dropshipping, you mitigate all the expenses associated with inventory. Instead, you’ll choose a third-party company to keep your products and ship your orders. Doing so is a lot more cost-effective than maintaining everything yourself.
Shopify has one of the most user-friendly platforms for dropshipping. In fact, it’s the top e-commerce platform that fully supports the model. If you’re a budding entrepreneur eager to start dropshipping, Shopify is the place to be. Shopify has the following benefits for dropshipping:
- A user-friendly interface
- Compatibility with dropshipping apps
- Marketing features
- Detailed analytics
- Tracking shipments
- Making payments
These perks will go a long way in helping you find success with your new dropshipping business. Shopify’s platform will even supply you with strategies to address abandoned-cart issues. In short, it’s an intuitive and accommodating dropshipping interface.
Now that you know Shopify is a great place to do dropshipping let’s look at what it will take to get started. First, you’ll need to know what types of products you’ll like to sell on your website.
Pick a Profitable Niche
Okay, so the first step is determining a profitable niche to focus on for your website. That is the deciding factor for what types of products you will sell. It’s essential to find a niche that is profitable and has a lot of interest. You may be passionate about a particular subject, but if there’s no market there, you won’t make any money.
So how do you find the right niche? Do some market research, of course! There are lots of ways to do this, including using social media. Facebook’s Audience Insights tool is perfect for this. When searching for a niche with it, keep the following factors in mind:
- The number of likes a niche has
- The demographics of the audience
- The location of the audience
- The number of ads clicked related to the niche
Ideally, you want to find a niche that has a lot of likes and ads clicked on. That’s how you know that people are interested. Make sure that you do more than one search to find the niche that has the most interest.
Tips for Selecting a Niche
- Try to find a niche that has a lot of accessories. Let’s consider gaming as an example. Many companies will see the most profit from accessories like controllers, adapters, gaming cases, and more. More oversized items like TVs and consoles are harder to sell as often since they’re so expensive. You know you’re doing things right when you find a niche with a ton of affordable accessories.
- Consumables and disposable products are also big money makers for dropshipping. That’s because they ensure a lot of repeat business, which is what you want. If you sell tasty cookies, for example, the chances of your customers coming back for more is very high. The same goes for disposable products like shaving razors, lighters, and more.
- You should seek out passionate customers. In particular, look for a niche that has a lot of hobbyists. Fishing is a great example. Anglers are constantly spending money on their hobby, through accessories, bait, new gear, and more. Try to find products aimed at hobbyists that solve painful problems. It’s all about ensuring as much repeat business as possible.
- Find niches that have low product turnover. If you have a product line that keeps changing, you’ll end up wasting money on resources. The ideal product line is one that stays the same year after year. Also, products that are quick and easy to manufacture are perfect.
- Finally, seek out products that are hard to find locally for your customers. Try to avoid products that you can easily find at local hardware, grocery, and electronic stores. Instead, seek out unique items that consumers can’t easily find in their town or city. That way, they’ll have to venture online to find their products, leading them to your website.
Finding a Reputable Dropshipping Supplier
Once you know what products you intend to sell, it’s time to find the best supplier. In fact, trying to find a distributor is often the most challenging part for entrepreneurs. It can be challenging to know who is best to use for your business. That’s why we’re here to help you narrow things down to your best possible options.
Lots of beginners opt to use dropshipping supplier directories. These are detailed databases organized by product, niche, and market. They usually screen each supplier to make sure that they’re legitimate. These directories often charge fees for users to access their data. They can come in handy if you have no idea how to find a supplier in your niche. If you don’t have a lot of time and have the money to spare, they can be beneficial.
Yet, these directories are not necessary if you already know how to find suppliers. That’s why it’s so critical to decide on your niche and products first. That way, you know where to look to find suppliers. After doing a bit of online searching, you should be able to find the top suppliers in your niche quickly.
Download a Good Dropshipping App
There are lots of dropshipping suppliers out there today. As previously stated, Shopify is compatible with many different apps. There are lots of apps out there today, such as Oberlo and CJDropshipping. They all have their own set of advantages and disadvantages. We’ve found that the best app to use is Spocket, so we’re going to focus on its features.
Spocket for Dropshipping on Spotify
Spocket is an app with access to tons of great suppliers in the US, Europe, Canada, Asia, and more. It pairs perfectly with Shopify, as you can add new suppliers to your store in just a few clicks. It’s an intuitive app that’s very easy to use, and it’s an excellent source for suppliers. Spocket currently boasts the highest reviews among all the dropshipping apps.
Critical features of Spocket include:
- Speedy shipping times. Keep your customers happy with lightning-fast shipping. You can say goodbye to month-long waits forever with Spocket. It also works with other apps like Oberlo, Shogun, and more. You’ll enjoy quicker shipping times and lower prices than other options such as Etsy and Amazon.
- Access to the highest discounts. Competition is fierce, which is why you need to feature the best prices. Luckily, the products on Spocket feature 30-60% discounts. The low prices will do a lot to help you stand out amongst the crowd.
- Auto-updating inventory. Spocket will auto-update your merchandise without you having to raise a finger. That means you’ll never sell out-of-stock products. Your products will be available and ready to ship whenever you need them.
- One-click orders. All it takes is one click to complete an order. Spocket will take care of the rest so that you don’t have to worry about it.
- Real-time order tracking. You’ll always know where your orders are to avoid confusion and delays. Your customers will also have access to this information. That will do a lot to reassure them that their product is on the way and will arrive shortly.
- Branded invoicing. With Spocket, you don’t have to sacrifice your branding when dropshipping. Your invoices will contain your logo and brand images, which will make your brand more recognizable to your customers.
- 24/7 customer support. You’ll never have to wait to get an answer to any question when you use Spocket.
As you can see, Spocket has a ton of unique benefits. If you’re new to dropshipping on Shopify, then Spocket is a must-download. Its myriad of features will do a lot to save you time and money, to get this awesome app click here.
Understanding the Dropshipping Supply Chain
To find success with dropshipping on Shopify, you need to understand the supply chain. It’s a term that refers to the path a product takes from manufacturing to the customer’s hands. A strong understanding of this process is crucial for finding success with dropshipping. That’s because you need to control your supply chain as much as possible to make sure you aren’t wasting money.
For dropshipping on Shopify, there are three players in the supply chain. They are manufacturers, wholesalers, and retailers. Let’s take a detailed look at each one:
- Manufacturers. A manufacturer is a company that creates products but does not sell them. Rather, they sell the products they produce in bulk to wholesalers and retailers. The supply chain begins with them, as they’re the ones physically creating your products. It’s cheapest to buy from manufacturers, but that comes with other problems. Manufacturers often have minimum purchase limits that can be pretty high. You’ll also have to stock your products, which is what we don’t want with dropshipping. For this reason, many drop shippers buy directly from wholesalers.
- Wholesalers. A wholesaler will buy products in bulk from a manufacturer. They then mark them up slightly to ensure a profit and sell them to customers. They sell to the public and retailers. If they do have minimum purchase requirements, they’re far lower than manufacturers. Lots of wholesalers only sell to retailers only, but some sell to the general public. They tend to focus on one specific industry or niche.
- Retailers. Finally, we have retailers. A retailer is anyone that sells products to the general public at a markup. For example, if you’re a drop shipper from Shopify, you’re a retailer.
So those are the three leading players involved in the supply chain. Any one of these players can act as a drop shipper. A manufacturer can choose to sell products directly to your customer, acting as a drop shipper. Wholesalers and retailers can also act as drop shippers. To secure the best pricing for your business, you’ll need to work directly with a solid wholesaler or manufacturer. Finding the best pricing is essential for making profits from your products.
The Dropshipping Order Process
Now that you know how the supply chain works let’s follow a dropshipping order from start to finish. That way, you can get a good idea of how your new business will work. Let’s say your business is called Gone Fishin’, and you sell fishing accessories. Here’s how the process goes:
- Step #1: Customer Places an Order. A customer decides to buy some of your fishing lures to try out. Once the order gets approved, a few things will happen. First, your business and the customer will both get an email confirmation. The customer’s bank account is also automatically billed. The money will then deposit into your company’s bank account.
- Step #2: You Place the Order With Your Supplier. Next, you’ll need to notify your supplier of the order. That is usually as simple as forwarding the confirmation email that you received in step one. Your supplier will then charge your account for the wholesale price and shipping fees. Some dropshipping suppliers have automated systems that will automatically register your orders.
- Step #3: Your Supplier Ships the Order. The final step is your supplier boxing and shipping the order to the customer. While the supplier will send it, your company’s name and logo will appear on the package. Once the shipment is complete, your supplier will email you an invoice and tracking number.
- Step #4: Your Supplier Notifies the Customer of Shipment. The final step is for your supplier to send the tracking number to the customer. That will ensure that the customer can track the package until it arrives at their front door.
That’s all it takes to place and complete a dropshipping order from your website. It’s a streamlined process that’s relatively quick and easy to do, making it great for new businesses. Dropshipping is a fantastic way to sell products while avoiding the hassle of managing inventory and shipping.
Dropshipping Tips for Total Beginners
All right, so by now, you should understand how to do dropshipping on Shopify. It’s all about selecting a niche and product line and finding a stellar supplier. To ensure your success, here are some expert tips for total beginners to dropshipping on Shopify.
- Own your mistakes. Even the most reputable suppliers make mistakes from time to time. Yet, it’s critical never to blame your drop shipper for any errors. Doing so will make you look unprofessional. Instead, fully own the mistake, apologize to the customer, and let them know how you’re going to fix it. Taking responsibility for your errors is the best way to retain your professionalism.
- Use multiple suppliers. To avoid running out of stock, you should use many suppliers with an overlapping inventory. That’s the best way to enjoy an excellent fulfillment ratio. If one supplier doesn’t have an item in stock, then another supplier probably does.
- Route orders to your preferred supplier. Not all suppliers are created equal. During your time dropshipping, you’re bound to find your favorite one. Once you find the best, route all your orders to that supplier. The only time that you should use a different one is if your preferred supplier is out of stock.
- Offer upgrades for out-of-stock items. Even the best drop shippers run into out-of-stock products from time to time. To avoid any issues, give your customer a complimentary upgrade to a similar but higher-end product. That will do a lot to retain that customers’ business in the future.
So that’s our guide to getting started dropshipping on Shopify. The platform is user-friendly and offers many advantages for dropshipping. As long as you select a profitable niche and affordable supplier, you’ll go far. Spocket is a fantastic app to use in tandem with Shopify as well. We hope that this guide has opened your eyes to how to do dropshipping on Shopify.