fbpx

Dropshipping Business: A Step-By-Step Guide On How It Works

D

Hey there! Have you ever dreamed of starting your own online business but didn’t quite know where to start? Well, look no further because we have the perfect solution for you. Dropshipping business model is practically straightforward and requires little of your participation, making it a great choice for generating passive income. In our article on the basics of the dropshipping model, we have examined how dropshipping works, and how to start dropshipping.

There are many eCommerce platforms that support the dropshipping business including hosted and self hosted platform like wordpress but in this article, I will be discussing dropshipping business ideas using Shopify and also providing tips on how to become a successful dropshipper using Shopify.

Whats is Dropshipping?

Dropshipping is basically a fulfillment model that allows entrepreneurs to outsource handling and shipping products to a third party. Dropshipping involves sending goods directly to clients from your wholesaler or supplier. In dropshipping, you don’t have to start a physical store. You don’t need to keep inventory on hand, transport things to customers, or keep a warehouse—you simply focus on marketing and connecting your customers with suppliers that can provide their products. Dropshipping makes it easier to avoid all the regular e-commerce hassles.

To start the dropshipping business, you only need an internet store and a supplier with the products you are marketing. The role of suppliers in your dropshipping business is very crucial because they are a huge component of the business model. It might be a hassle to find reliable suppliers that would offer great and quality products, in a country and a business that you know little about. This is why we have recommended using an experienced sourcing agent that would help you take care of finding your products and shipping them to your customers.

Making sure you choose the right source is essential. This may have a big impact on how successful your business is in the future. The ideal supplier will have the high-quality goods you require and guarantee the satisfaction of your customers. You don’t want a supplier who gives you unhappy customers by delaying product deliveries.

Introducing Shopify

Shopify is a cloud-based ecommerce platform that enables users to create and manage an online store. Shopify offers online store owners a collection of ecommerce solutions that cover all facets of operating an online business.

Using the Shopify platform, you can start an online store where you can sell goods and get paid. Even for a beginner, it is simple to use, and it also provides thorough training and support to assist you. If you want to launch your dropshipping business but lack the knowledge, Shopify is a great place to start. As of today, over 4.1 million e-commerce websites have been created with Shopify.

Shopify enables business owners to set up their own online stores and begin marketing, selling, and shipping their products. The platform also offers retail point-of-sale (POS) software for use in physical stores. Because it is simple to use and doesn’t require any technical knowledge, Shopify is preferred by store owners all over the world. You can design your own store and launch your dropshipping business from scratch, even if you have no technological background.

Dropshipping on Shopify

Dropshipping using Shopify is a technique to launch an online store with a reduced chance of financial loss. It’s a business strategy that enables you to market physical goods produced, stored, and dispatched by independent dropshippers through your own website. In essence, you simply sell and do not produce or store anything.

Shopify dropshipping is perfect for business owners who want to launch a Shopify store on a budget, want to try a product before purchasing it, or who currently operate an online store. Shopify dropshipping enables you to place on-demand orders for products from a wholesaler rather than buying inventory in advance. When a customer puts an order on your Shopify site, the product is simply ordered from the wholesaler and shipped directly to the customer’s address. By eliminating the hassle of managing, storing, and moving inventory, you can supply your clients with goods on demand.

Why Shopify Is a Good Platform for Dropshipping

A. Easy to setup

Anyone can utilize the Shopify platform easily because of how user-friendly it is. All of these things are done without sacrificing the benefits they offer. If you encounter a problem, there are tutorials accessible that are simple for everyone to read and comprehend.

B. Numerous Design Elements

Shopify allows you to create your store and set up your business online using free or premium theme to reduce setup time and expenses. There are absolutely free design templates you can utilize if you wish to cut expenses. Shopify also offers paid design templates at a reasonable price if you don’t mind making an investment in your online store.

C. Little start-up cost with Product-testing opportunity 

You can launch your dropshipping business for very little money. You can also try out new goods, vendors, and distribution methods. Using dropshipping is a low-risk method of determining what is best for you and your business.

How Does Shopify Dropshipping Work?

Dropshipping using Shopify is a great business concept if you are just starting your online business. Shopify dropshipping basically follows the general dropshipping process.

  1. An Order is placed on your Shopify store: On your Shopify dropshipping store, a consumer places an order and makes a payment for a product. 
  2. Send Purchase order to your Suppliers: After the order is made, you proceed to send your supplier the order and delivery details. You must have a reliable supplier you can rely on to deliver the service you offer because you are not responsible for selecting, packaging, or shipping actual products.
  3. Payments and Product Delivery: At this point, you make all the necessary payments to your supplier, and ensure the products are properly delivered to your customers.

How to Start Dropshipping on Shopify?

Ready to begin your Shopify dropshipping journey? Below are the comprehensive steps recommended to build a successful dropshipping business.

Step 1: Select a winning niche and understand your target market

Carry out product research to find a product that is in demand and that you really want to sell. It may be difficult to build a successful business if you are not passionate about the products or services you offer. Verify the profitability of the item you intend to offer in your shop. To determine your costs and earnings for a certain item, run the figures.

After getting your desired niche or product, Next is you need to recognize your prospective customers. Find out where they reside, what they do, what their desires and needs are, how they think, and what makes them purchase anything. Verify that they actually require the goods you’re trying to sell.

Step 2: Set up your Shopify Store

You have to register on Shopify and create your store before the business even starts. To launch your own Shopify dropshipping store, simply follow the process below: 

  • Register Shopify account
  • Add the items you want to sell: To add your products to your store, you can source for products on popular e-commerce platforms including Aliexpress, 1688, Alibaba etc or manually include them with accompanying details such as product name, size, and description. You can also use dropshipping apps which can be integrated into your shopify store. These dropshipping apps directly find products for you and add them to your store.
  • Customize your store and modify how it appears: Add a unique design to your Shopify store next. Although it is not required, having a visually beautiful store comes with some advantages. It is a fantastic method to build your store’s identity and give it personality. Additionally, it will guarantee repeat business from customers. You can pick a theme to add by browsing the numerous selections available in the Shopify theme store.
  • Provide payment options
  • Review the settings, guidelines, and regulations your store will adhere to
  • Choose a Shopify plan that most closely matches the demands of your business
  • Link your Shopify dropshipping applications
  • Start doing business with your store.

Step 3: Incorporate Shopify Dropshipping Apps into your store

Shopify dropshipping applications are third-party tools that give sellers using the Shopify platform the freedom to personalize their operations, add critical functionality, and thereby provide their clients with greater value. A Shopify dropshipping software typically serves as a go-between for an e-commerce store and its clients.

At Shopify’s app store, a wide variety of dropshipping app extensions are offered. It contains everything you could possibly need for your Shopify dropshipping business, including CRMs, social selling applications, email automation, remarketing tools, and shipping apps, to name a few.

Some of the very popular Shopify dropshipping apps include Dsers (which is specifically built for the Shopify platform), Modalyst, Spocket etc.

Step 4: Online Marketing

After setting up everything as mentioned above, the next thing is how visitors would be acquired through different channels interact with a website or landing page experience which might require little marketting spend. There are several free ways to pull free traffic to your website but i won’t be talking about in this article.

Some of the very popular marketing platform Shopify dropshippers mostly use include Facebook, Google and Pinterest.

Shopify Dropshipping Guidelines

Dropshipping seems generally uncomplicated, you still have to have a working knowledge of how to deal with customers, suppliers, and marketers. Below are some tips that can help you run a profitable dropshipping business on Shopify.

Maintain open lines of communication with your suppliers and other partners

It is always advisable to keep an open line of communication with your suppliers (or sourcing agents) and other partners, such as vendors.

Have an effective customer support strategy

At some points in your business, you may need to address issues raised by your customers. You should typically include chat or phone support, an email address for questions, a FAQ section, and someone to answer comments and direct messages on social media sites.

Neglecting clients could have a negative impact on your business. Customers are likely to lose interest and purchase elsewhere if there isn’t a chance to clarify and fix problems.

Have a winning and long-term master plan

Selling should be your complete focus once your store is up and running. To successfully market your products to potential customers, you need to invest your resources, such as time and money. Some of the winning marketing strategies you should employ include making your store SEO-friendly, Social Media Marketing (like Facebook and Instagram ads campaigns, Email marketing, and Content marketing. 

All of these marketing strategies will bring your products to your target audience and greatly improve your chances of converting, while also giving your shopify store wider exposure

Benefits of Dropshipping using Shopify?

Below are some of the reasons why dropshipping on Shopify is a good move for your business.

  1. For e-commerce businesses, Shopify is a one-stop shop with lots of useful features. When starting a dropshipping business, you don’t need to go through all the processes because Shopify takes care of everything and even allows you to integrate other apps to enhance the functionality of your store.
  2. You can open a store without making any initial expenditure when starting your own Shopify dropshipping business.
  3. There are no inventory concerns. You don’t have excess inventory because you don’t create any things or buy goods in large quantities. Products are ordered only when an order is placed, and the quantity of products available meets client demand.
  4. Shopify is simple to use for both seasoned users and beginners. The platform is simple to use and offers helpful customer service.
  5. Shipping fees are nonexistent because you simply order goods from wholesalers and don’t ship anything yourself.

Also Read: Amazon FBA vs. Dropshipping: Which E-Commerce Model is Right for You?

Challenges of Shopify Dropshipping

Dropshipping using Shopify provides certain undeniable benefits, there are some risks you should be aware of. Additionally, the characteristics that make Shopify dropshipping unique could end up being a problem.

  1. Stiff Competition leading to low-profit margins
  2. No control of inventory and quality of products
  3. There may be problems with order fulfillment as this is also out of your hands. You have to put in place a solid customer support strategy to address issues that may come up.

FAQ’s

What exactly is dropshipping?

Dropshipping is an e-commerce business model where the retailer doesn’t keep products in stock. Instead, they partner with a supplier who handles inventory storage, packaging, and shipment directly to the customer. This means the retailer only purchases items after receiving an order from a customer.

How does dropshipping benefit entrepreneurs?

Dropshipping eliminates the need for large upfront investments in inventory, mitigates the risk of unsold stock, and allows entrepreneurs to focus on customer acquisition and marketing. It’s also a flexible business model that can be operated from anywhere as long as there’s an internet connection.

How do I ensure a profit with dropshipping?

Achieving profitability requires careful pricing. Consider factors like product cost, shipping fees, marketing expenses, and desired profit margin. Research competitors’ prices and strike a balance between attracting customers and ensuring profitability.

Are there any challenges with dropshipping?

While dropshipping offers numerous advantages, it does come with a few challenges. These include finding reliable suppliers, handling customer complaints, managing inventory updates, and dealing with potential shipping delays or errors. However, with proper planning and management, these hurdles can be overcome.

Conclusion

Shopify is arguably the first platform that springs to mind when establishing a dropshipping business. Dropshipping through Shopify is a fantastic opportunity for business owners who are just getting started. It’s one of the greatest ways to sell your goods without keeping any inventory on hand, and it doesn’t demand a significant initial investment.

Do you need in depth information about dropshipping business model including market and product research, sourcing, branded website design and development or digital marketing, chat with me directly on my website or connect with me directly via linkedin to help simplify the processes for you.

Try Shopify For Free

Also Read:

Let us know if you find this article insightful. If you have any further question, you can leave it in the comment section below.

About the author

Afenuvon Gbenga

Meet Afenuvon Gbenga, a full-time blogger, YouTuber, ICT specialist, tech researcher, publisher, and an experienced professional in e-commerce and affiliate marketing. Are you eager to kickstart your online business, then you're in the right place. Join us at techwithgbenga.com, where you'll uncover the insider secrets to starting and scaling a successful online business from the best!

Before blogging which started as a side project in 2019, Gbenga successfully led a digital marketing team for a prominent e-commerce startup. His expertise also extends to evaluating and recommending top-notch software solutions to boost your online business.

Speak Your Mind

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Afenuvon Gbenga

Meet Afenuvon Gbenga, a full-time blogger, YouTuber, ICT specialist, tech researcher, publisher, and an experienced professional in e-commerce and affiliate marketing. Are you eager to kickstart your online business, then you're in the right place. Join us at techwithgbenga.com, where you'll uncover the insider secrets to starting and scaling a successful online business from the best...

Join Our Newsletter!

Stay connected

Follow us on all social platforms for updates. Let’s explore, learn, and succeed together! #techwithgbenga