What Is Shopify Dropshipping & How to Get Started? The Ultimate 2023 Guide for Ecommerce Beginners
Dropshipping is a new ecommerce business model used to run an online storefront without the need to manufacture a product, supply a service, or even maintain an inventory. It is one of the most popular business models with numerous benefits for suppliers and manufacturers globally, and available options like Shopify dropshipping make it even easier and faster to get started.
This is one of the most straightforward business models and fulfillment options as it doesn’t involve a middleman in the traditional sense of the word. When a buyer places an order, you guide the buyer to the supplier, who provides products at wholesale rates. Ecommerce websites now readily use dropshipping for business growth, with the global market size reaching $128.6 billion, according to Statista.
In this article, we will provide you with a complete guide on what dropshipping means and how to set up dropshipping on Shopify to start making money from ecommerce.
Table of Contents
- What Is Dropshipping?
- How Profitable Is Shopify Dropshipping?
- What Are the Advantages and Disadvantages of Dropshipping Compared to Other Ecommerce Business Models?
- How to Dropship on Shopify Step by Step
- Get Started with Your Ecommerce Dropshipping Business on Shopify
What Is Dropshipping?
Dropshipping is an ecommerce business model allowing entrepreneurs to set up their storefronts and start selling online with little to no investment.
This is an order fulfillment option where you - as the seller - list, promote, and market the products or services of a dropshipper. As soon as you receive an order from a customer, you forward it to the dropshipper, who is responsible for fulfilling the order. Meanwhile, you have to maintain communication with the customer and provide them with up-to-date information on the status of their order.
Depending on the arrangement between the seller (you) and the dropshipper, you might be responsible for customer support or you might not be.
What Is Shopify Dropshipping?
Dropshipping with Shopify is a variety of this business model which involves the use of the Shopify ecommerce platform. Sellers can set up their ecommerce business on the platform which allows them to automate most of the processes and steps involved in this strategy.
The biggest benefit of this approach is that Shopify dropshipping saves business owners from unnecessary inventory management because customer orders get delivered directly. This means that those interested in dropshipping on Shopify don’t have to invest in bulk orders or product manufacturing. With the increasing demand for online trade, Shopify dropshipping has become vital to businesses worldwide.
This model allows entrepreneurs to earn large profits without worrying about supply chain or manufacturing costs. These features make it the best option for long-term business operations. On average, people working with Shopify dropshipping suppliers make 15% to 20% in profit. The exact number varies based on the kind of supplier you have and the type of products you sell.
Where Can You Find the Best Products to Dropship on Shopify?
The most vital part of starting and running a successful Shopify dropshipping store is knowing where to find the products for sale. There’s a variety of different products, suppliers, and options to choose from. You can also choose between various approaches, but here’s a quick list of the most viable options for Shopify dropshippers in 2023.
1. Worldwide Brands
Worldwide Brands is a Florida-based company that has been operating since 1999. They officially registered as a company in 2001 and have become a leading platform for Shopify dropshipping. The company has created The Drop Ship Source Directory, a key industry player.
Wholesale 2b is another popular platform for dropshipping, with over 1.5 billion leading sellers. It’s a good platform for newer sellers in the industry.
3. Wholesale Central
Wholesale Central is a popular pick for entrepreneurs seeking dropshipping business opportunities. Wholesale Central is the go-to option for manufacturers, importers, wholesalers, distributors, and dropshippers.
Spocket is yet another website that specifically provides access to wholesale merchants that focus mostly on US and EU products, but products from other markets are also available. This is a good place to find products to dropship for those wishing to maximize profits.
5. DSers-AliExpress Dropshipping
Dsers is a platform to place unlimited orders on AliExpress via bulk payments. It’s an ideal option for high-demand dropshipping on Shopify.
Each of the stores and platforms listed above has its own features, requirements, benefits, and drawbacks for entrepreneurs. That’s why it’s important to study the characteristics as well as the pros and cons of each before making a decision. Finding the right place to source your products from is one of the most complicated decisions of dropshipping with Shopify.
How Profitable Is Shopify Dropshipping?
Profitability is the key reason so many people jump into the business. If we look at the top Shopify dropshipping stores, this strategy undoubtedly offers high profit opportunities. As we’ve mentioned earlier, the average profit margin in the business ranges between 15% and 20%, based on various factors.
The basic principle for Shopify dropshipping profits depends on the price points for the same product. Several factors can impact the final pricing and profits for dropshippers, including:
1. Market Potential of a Product
Like any business, the demand for dropshipping products impacts their price. Most businesses thrive or fail depending on the products they offer customers. These products determine the profit margins.
2. Corporation Partners
Finding and working with the right corporation partners directly impacts the feasibility and profitability of dropshipping business because they determine the supply and quality of products. Without the right products, sustaining the business is not possible in the long run. The corporation partners in any business typically include the following manufacturers, wholesalers, distributors, and others.
3. Marketing and Brand Building
Brand building and ecommerce marketing are just as important as any other aspect of the business. If customers don’t know about the products or platforms you deal with, you won’t get the desired results in profits.
Core Marketing can help you optimize the marketing of your ecommerce dropshipping business through personalized pop ups, customized emails, SMSs, and gamification features such as games and quizzes.
Click here to schedule a free demo.
4. Ecommerce Software and Apps
The software tools and apps that you choose to build and optimize your Shopify dropshipping store are also a major determinant in your business success. As a leading ecommerce platform, Shopify provides great options that come within the platform as well as powerful integrations with third-party apps to further boost the performance of your online store. Therefore, you should take the time to carefully assess which options work best for your specific Shopify dropshipping goals and include them in the technical setup.
What Are the Best Products to Dropship?
Knowing the right industries, niches, and products for dropshipping is important because it determines the targeting of customers. Before learning how to start a dropshipping business on Shopify in concrete steps, we recommend carefully choosing the most appropriate niches and products for selling online.
There are plenty of options to choose from depending on your expertise and interest, but the most profitable categories include:
- Beauty and personal care
- Apparel and footwear
- Baby products
- Pet supplies
- Smartphones and phone accessories
- Home improvement and home tools
- Home decorations
- Kitchen and dining
- Car accessories
Investing in any of these niches for dropshipping provides a higher chance of getting strong demand from customers and maximizing profits. However, it is also important to try to focus on products and items that you feel most comfortable with and know most about. After all, you need to be able to establish your online reputation and stand out from other dropshippers.
Thus, you need to take the time to carefully research the market before advancing. It is the smartest way to ensure you don’t have to close down in a few short months.
We also recommend that you set up profit margin expectations for each category when you first get started. While you will most probably not be able to achieve these targets right away, you have to start working towards optimization right away. In this way, you should be able to gradually advance to your desired level.
9 Most Profitable Shopify Dropshipping Websites
Setting up and operating a dropshipping Shopify store is much easier and more passive than getting started with other types of ecommerce business. Meanwhile, the numerous successful websites which practice dropshipping demonstrate that this strategy can be as profitable as other more labor-intense online stores.
To get you inspired to seriously consider launching your own Shopify dropshipping storefront, we’ve gathered 10 of the largest and most popular examples:
- Palo: General
- Fashion Nova: Apparel
- Be Activewear: Apparel
- Burga: Phone accessories
- For My Doggy: Pets
- Haus: Furniture
- Warmly: Home decor
- Ruggable: Home decor
- Notebook Therapy: Stationery
- BioLite: Camping
These Shopify dropshipping stores prove that finding the right balance between demand and your own experience and passion is key in how to start dropshipping on Shopify.
What Are the Advantages and Disadvantages of Dropshipping Compared to Other E-commerce Business Models?
Understanding the pros and cons of dropshipping is a must before stepping into the business and allocating all the financial and human resources needed to launch an online storefront. Entrepreneurs need to make sure that this model makes more sense than other ecommerce businesses. Then, we can move onto how to dropship on Shopify.
Shopify Dropshipping Advantages
Shopify dropshipping offers the following benefits that business owners should always remember:
- Easiness to Start
Dropshipping on Shopify is easier than other ecommerce business models because you don’t need to manufacture anything and you don’t even need to maintain an inventory. All you need is a supplier and a customer base to target. You can build your dropshipping business by investing less upfront while yet maximizing profits.
- No Startup Cost
As a dropshipper, you don’t have to worry about R&D or production costs. You don’t need to build a manufacturing team either. All this is all covered by the suppliers. Your only costs are those related to launching a Shopify website.
- More Products to Sell
A larger portfolio of products allows dropshippers to target more consumers. You can pick from a wider product variety, making it ideal if you want to keep the business running. Growth is also easier as you can simply dive into a new category or niche to sell.
Shopify Dropshipping Disadvantages
Like other business models, Shopify dropshipping also has some drawbacks you should keep in mind.
- Challenges to Developing a Business Focus
Dropshipping has attracted numerous products and dealers in the market, making it challenging for dropshippers to focus on a specific product type. You have to perform diligent competitive market research and analysis before choosing what to dropship.
- High Competition
You aren’t the only dealer in dropshipping, making it slightly challenging to survive if you are just starting. After all, everyone with some basic business and technical skills can launch a Shopify storefront.
- Less Quality Control
Dropshippers have little to no control over the quality of the product, which impacts the final products. That’s why it’s crucial to choose suppliers based on their brand reputation.
How to Dropship on Shopify Step by Step
Now that you know the basics of dropshipping with Shoppify and the important advantages which it brings, it’s time to learn how to dropship on Shopify step by step.
We’ve put together this guide with the steps to follow:
Start by researching your target market in terms of both product and geographical location. Focus on a niche that fits your general knowledge and skills as well as your budget.
2. Supplier Analysis
Start analyzing the potential websites from which you can source products to dropship. Analyze the requirements, processes, and costs.
3. Build a Shopify Store
Familiarize yourself with the process of launching an ecommerce store on Shopify and go through the necessary steps.
4. Add Products
Add the products that you will dropship on the Shopify store you’ve launched. Focus on product images, descriptions, and details that will make you stand out from the competition and get customers to buy from you.
5. Setup Payment
Complete the payment setup systems for users. One of the most important benefits of Shopify over other ecommerce platforms is that it works seamlessly with a number of different payment options.
6. Launch, Market, and Optimize Your Dropshipping Website
Launch your Shopify dropshipping store and start marketing it. To boost performance, you can consider starting a loyalty program. Building customer loyalty will help you generate more frequent sales at a higher value. You can choose between a points-based loyalty program, a cashback program, or even a referral program.
Core Loyalty can help you build a loyalty program based on AI and real-time analytics. You can increase sales 2.7x in an effortless manner.
Click here to schedule a free demo.
Get Started with Your Ecommerce Dropshipping Business on Shopify
Dropshipping on Shopify can be a profitable ecommerce business model which comes with its own pros and cons. What matters is that the advantages can significantly overweigh the disadvantages if executed well. Most importantly, this strategy allows you to generate nearly passive income with minimal initial investment and operating costs.
To give your Shopify dropshipping business the initial push that it needs, check out the Coretava products. Use the power of loyalty marketing, personalization, and gamification to increase conversions.
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Daniela has 6 years of experience in digital marketing for ecommerce businesses.
Aws is the Co-Founder of Coretava, a complete retail ecommerce growth platform. He has 6+ years of experience in managing and growing ecommerce businesses.