Table of Contents
What is Dropshipping?
Dropshipping is a product fulfillment method where the retailer or store doesn’t physically hold any inventory. When an order comes through, the seller will then place the order through a third-party merchant that holds the stock, which will then ship the order directly to the consumer. As a result, the original seller doesn’t see or handle the product.
Here is a simplified process of what happens when a dropshipping merchant receives an order.
- Customers place an order on the retailer’s Shopify store.
- The merchant receives the money from the customer.
- The merchant forwards the order and shipping information to the supplier.
- The merchant pays the supplier.
- The merchant packages and ships out the order to the customer.
- The merchant keeps the margin between what the customer paid for the product and what the merchant paid the supplier.
What is Shopify?
Shopify is one of the largest e-commerce platforms in the world, currently hosting just over 6.3 million stores. Shopify allows small, medium, and large businesses to set up an online store and start selling their products and services in a matter of a few hours. The platform provides merchants with all the necessary tools and features they need to create an online store, track and fulfill orders, handle taxes, fees, charges, process payments, and more.
Below, we’ll share a few basic bits of information on how Shopify works:
- Sign up to Shopify and choose a plan.
- Start setting up your online store by customizing the design of the site and adding your products or services.
- Set up your site’s payment gateway and the different shipping options available.
- Once your site is live, all you need to do is drive traffic to your store.
What is Shopify Dropshipping?
Shopify dropshipping has become a popular term because the platform Shopify and dropshipping have become two very closely linked words. And to answer what is dropshipping on Shopify, in most basic terms, it’s the process of selling physical products through the Shopify eCommerce platform using the dropshipping method to fulfill orders.
This means that when a customer places an order through your Shopify store, you will then pass on the order details and information to a third-party supplier that will package and ship your customer’s order.
Why Choose Shopify to Open Your Online Store for Dropshipping?
In the dropshipping community, Shopify is known as the go-to platform. Currently, Shopify dropshippers make 12.82% of all 6+ million sellers on Shopify. This means that around 770,000 dropshippers are currently using Shopify to host their dropshipping business. This is a staggering number compared to other popular platforms in the likes of Bigcommerce and Woocommerce.
Just to give you an example for a head-to-head comparison, Bigcommerce has 1 million active stores whereas Woocommerce has 3.4 million. Statistically speaking, Shopify is two times more popular for dropshipping than Woocommerce and six times more popular than Bigcommerce.
There are many other reasons why you choose Shopify to open your online store for dropshipping. Here are a few:
- User-friendly interface: Shopify has a user-friendly interface that is easy to navigate, even for those without a lot of technical expertise. This makes it a great option for those who are new to e-commerce.
- Built-in features: Shopify includes a number of built-in features that are designed to help you run your store efficiently and effectively. This includes features for managing inventory, processing payments, and tracking customer information.
- App Store: Shopify has a large and active app store, which includes a variety of apps and plugins that can help you add additional functionality to your store. For example, you can find apps that help you automate your order fulfillment and many other apps that can help you handle your dropshipping business smoothly.
- Customizable design: Shopify allows you to customize the design of your store with a wide range of templates and themes. This gives you the ability to create a unique and professional-looking store that reflects your brand.
- Scalable: Shopify is a scalable platform, meaning it can grow with your business. Whether you’re just starting or you’re ready to expand to a larger online store, Shopify can accommodate your needs.
- Good Customer Support: Shopify has a good customer support team, which can help you with any issues or questions you may have about running your store. They also have a vast knowledge base with tutorials and documentation.
- Affordable: Shopify has several pricing plans that are designed to accommodate different business sizes and needs, which is affordable for a start-up business.
Pros and cons of multiple different E-Commerce platforms
Below are the pros and cons of some popular E-Commerce platforms:
||WooCommerce is free and open source. However, you will need to pay for hosting, domain registration, and other such fees associated with running a site.|
||Starting a TikTok shop is completely free.|
Keep in mind that the pros and cons of these platforms may vary depending on the specific needs of your business. It’s a good idea to evaluate each platform and decide which one best suits your business requirements.
With that said, if you can’t decide on any single store, then run multiple stores across different platforms. That will allow you to reap the unique benefits of every platform you want to use. And although running multiple stores across multiple platforms may seem complicated, thanks to HyperSKU, it’s not.
HyperSKU allows you to sync the inventory of your entire business in a single dashboard, even if it is spread out across multiple platforms. Not only that, but HyperSKU also has a fantastic order management feature that allows you to track the order status and shipping details of each order, making your business operations so much smoother.
How to Dropship on Shopify
If you’re wondering how does Shopify dropshipping work, below, we’ll go over it in more detail.
The process for dropshipping on Shopify will greatly depend on the products you sell and the general process you want to follow. However, below, we’ll go over a pretty standard process most beginners follow when starting their dropshipping journey on Shopify.
Step 1: Find a dropshipping supplier
First, you’ll need to find a supplier that not only sells the products you want to sell to your customers but also offers dropshipping as a service. The supplier you choose will be responsible for handling the storage, packaging, and shipping of the products you sell to your customers.
Step 2: Add products to your Shopify store
Once you find a reputable supplier you want to work with, the next step in the process is to add their products to your Shopify store. After you do that, take the price the third-party merchant is selling the product for and add a margin that you’re happy with.
Step 3: Contact the supplier and pay for the service after receiving a customer’s order
Once an order comes through, you will receive the customer’s money, and you will then use the very same money to purchase the product from the supplier – keeping the margin that we mentioned previously.
If you integrated your Shopify store with HyperSKU when you set up your Shopify store, HyperSKU can assist you to sync your Shopify orders to your HyperSKU dashboard with a few clicks. Then, HyperSKU will fulfill your orders and ship products to your customers.
Step 4: The supplier delivers products
The supplier will then ship out the order directly to the customer’s address. You have no further duties from here unless the customer has a complaint or wishes to return the order.
With all that said, there are some things that you should keep in mind before starting your dropshipping journey on Shopify:
- Always make sure that you choose to work with a reliable and trusted supplier. Your entire reputation will depend on the supplier’s ability to deliver your customer’s order.
- Be completely transparent with your customers from the get-go. Let them know that the product they buy is going to be shipped from the supplier, and if they have ordered multiple items, they may come in separate packages.
- Always stay up to speed with your suppliers’ inventory levels. You don’t want to sell a product only to find out that it has gone out of stock.
How to Start Dropshipping on Shopify
How to Set Up a Shopify Store
If you’re a tech-savvy individual, setting up a basic Shopify store shouldn’t take you more than a few hours – even if you’ve never used Shopify before. However, if you’re not the most tech-savvy individual, don’t worry. Below, we’ll show you how to set up a Shopify store, step-by-step.
Step 1: Sign up for a Shopify account and choose a plan.
First, you need to sign up for a Shopify account. Fill out all the necessary information and choose a plan. There are three different plans available, each one priced differently and providing a different set of features.
Step 2: Customize the look of your Shopify store
Once you’ve selected the plan that best fits your needs, it’s time to start customizing and setting up your story. Here, you can customize the look and feel of your store and add additional pages such as Contact or About Us for your customers to read.
Step 3: Add products to your Shopify store
Then, it’s time for you to start adding the products that you want to sell to your customers. This includes writing product descriptions and uploading the highest quality possible pictures.
Step 4: Set up payment options
Once that is done, the next step is to set up all of the different payment options your customers can use to transact with your business. Since Shopify integrates with several different payment gateways, make sure to choose the one that best works for you and your customers.
Step 5: Integrate your Shopify store with different software
Shopify, by default is a pretty plain platform. However, thanks to its immense popularity, hundreds of software have been developed to help Shopify owners make their business operations run smoother.
If you’re running a Shopify business, one example of a software you should definitely be using is HyperSKU. Once HyperSKU is seamlessly integrated with your Shopify store, you can:
- Sync Shopify orders to the HyperSKU dashboard in a few clicks
- If you run multiple stores across multiple platforms, HyperSKU allows you to sync them all together
- Access to over 2,000 vetted suppliers
- One-click item imports
- Shipping to over 72 destinations worldwide
All you need to do then is press the “Launch store” button, and your website will be live and ready for business.
Shopify Dropshipping Apps
Due to the sky-rocketing popularity of Shopify, many app developers have made applications to help dropshipping entrepreneurs make their business processes a whole lot smoother and efficient. Below, we’ll go over some of our favorite Shopify dropshipping apps that you should take into consideration for your store.
HyperSKU is one of the best and most reputable Shopify dropshipping apps for supplying products to Shopify sellers from around the world.
- Source products from over 2000+ suppliers across 15 different categories
- Ability to ship to over 72 destinations from around the world
- Can manage multiple eCommerce stores across different platforms from one place
- Worldwide address validation system
- Split & Bundle orders
- No subscription fees. Only pay when you make a sale
- No credit card required to start using HyperSKU
- Shipping time only takes between 7 and 12 days
- Quality service with up to 3 dedicated agents
- High control of product quality with access to samples
- Items cannot be returned to the supplier
AutoDS is an automation tool that helps dropshipping e-commerce stores manage their processes more efficiently.
- Automatic product sourcing
- Has an integrated profit calculator
- Inventory and price monitoring
- Order automation
- Increased efficiency
- Save time by automatic basic tasks
- Make more informed decisions thanks to the profit calculator
- It’s not free
- Limited customization
- The operation of your store will depend on automation
Spocket is a dropshipping platform designed to help e-Commerce sellers find merchants and sell products from suppliers from around the world.
- Offers a wide selection of products to choose from
- Access to pre-vetted suppliers
- Product customization is possible
- Automated ordering process
- Automated ordering process
- Access to pre-vetted suppliers
- Ability to customize products to your liking
- Spocket is a paid service
- Limited control over the product sourcing process
- Your store will depend on automation
Modalyst is a platform that connects retailers with wholesale suppliers for print-on-demand and dropshipping products.
- Access to product management tools
- Access to order management tools
- Automated communication with merchants for order fulfillment
- Streamlined order fulfillment process
- Wide selection of products available
- Modalyst comes at a cost
- You have limited control over product quality
- You have limited ability to negotiate with suppliers
- Your store will depend on the platform for product sourcing and fulfillment
Trendsi is a platform that connects retailers with suppliers of fashion products such as clothing and accessories.
- Access to a wide range of different fashion pieces
- Only pay for product costs when you make a sale
- Trendsi will pick, pack, and ship directly to your customer in record time.
- Access to over 100,00+ different fashion pieces
- No monthly fees
- Customers can receive their order with your branded invoice
- Limited ability to negotiate with suppliers
- For fashion dropshippers only.
Why Dropshipping on Shopify is Right for You?
There are several different reasons why starting dropshipping on Shopify is a great idea for anyone looking to start an eCommerce business.
For one, the start-up costs are minimal, meaning there is an extremely low barrier to entry. All you need to pay to start selling is $29 for the monthly Shopify subscription. Since setting up a Shopify store is extremely easy and straightforward, you don’t need to spend any money on hiring a developer, a designer, or an agency to set up your store. You can do it yourself in just a few hours.
Not only that, but there are a ton of Shopify integrations that you can use to make the running of your business more efficient. One such example is HyperSKU – a software you can use to source products, import them to your story, and fulfill orders in just a few clicks. Try it out – there are no subscription fees. You only pay when you make a sale.
FAQ (Frequently Asked Questions)
Is Shopify Dropshipping Legal?
The process of fulfilling orders through the dropshipping model is completely and entirely legal. Shopify, which is a successful publicly-traded company, even encourages entrepreneurs who want to bootstrap their own businesses without significant capital.
With that said, it’s important to mention that the legality of dropshipping can depend on how you use it. Like any business model, you can use dropshipping ethically and unethically. As long as you don’t falsely advertise, send exactly what your customer has ordered, and follow best practices for running an online business, you will be just fine.
Is it Free to Dropship on Shopify
No, it is not free to dropship on Shopify. Although Shopify regularly advertises a free 14 or 30-day trial for new users, you will have to pay for a subscription in order to keep your store running. Besides that, you will also pay payment processing fees for every sale made through your store. These fees are based on your subscription plan and range from 2.9% of order value + $0.30 to 2.4% of order value + $0.30.
How Much Does it Cost to Open a Shopify Store?
If you’re planning on opening your shopify store without the help of a professional, then all you need to pay is the Shopify subscription cost, which ranges from $29 to to $299 per month depending on the subscription you want to opt-in for. If you have a larger store and want to move to Shopify, then you can get a custom quote based on your exact needs and requirements.
If you plan on using a paid website design or any paid software, then those will likely cost you some money too. In general, the overall cost of opening up a Shopify store will depend on your needs and requirements as a merchant.
Is Shopify Dropshipping Profitable?
Like with any business, it depends on what you make of it. There are plenty of successful entrepreneurs that have made tens of millions of dollars using the Shopify dropshipping method, so coming out profitable is definitely possible.
With that being said, if you’re completely new to e-Commerce, in order to come out profitable when dropshipping with Shopify, you will face a steep learning curve. You’ll have to learn all about fulfillment, customer relationship management, taxes, fees, and charges, and a whole lot more.