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Home > Digital Marketing Blog > How to Make Money Using Shopify Dropshipping?

How to Make Money Using Shopify Dropshipping?

How to Make Money Using Shopify Dropshipping?
Sonal Sai
April 18, 2018

Let's say you own an ecommerce website. Now, as the owner of an ecommerce channel, you know the variables involved- there's customer strategizing, stock availability, and seasonal inclusions. But the most important of all is the involvement and the maintenance of an inventory to store your stock. However, there's always a better option that lets you make the most of it, while still being beneficial for your business. Here, I'm talking about Dropshipping. In case you are unaware of what dropshipping is, I'll guide you through it, and also talk about how to setup and earn money via Shopify dropshipping account. I will also discuss about how to setup aliexpress dropshipping and oberlo shopify dropshipping account.

Dropshipping- Digital Ready

What is Dropshipping?

In case you're wondering what this new concept is, let me clarify the fact that dropshipping isn't a new thing. As a matter of fact, it dates back to 1999, when Las Vegas-based shoe and apparel brand, Zappos incorporated this technique. So, what exactly is dropshipping? Dropshipping refers to a supply chain management method, where a retail store doesn't keep its products stocked up in an inventory, and instead buys them from a third-party store, and ships them directly to the customer. Here, the merchant has no involvement in the product handling.

What is Dropshipping- Digital Ready

What is the Dropship Model?

The dropship model is easier than considered.

First, the customer browses through and purchases a product, which gets registered in your database.

Second, the product order made by the customer is forwarded to the third-party supplier from where you purchase your stock. Here, you would be paying for your wholesale purchases.

Third, the third-party supplier ships the product(s) directly to your customer’s address, where the product has been shipped under your company’s name.

Dropship Model - Digital Ready

Check out the video below by Dan Dasilva for an easy explanation of the dropship model.

How Can Dropshipping Benefit You as an E-commerce Business Owner?

You Save a Lot of Money

When you own an ecommerce website, you know the various costs involved in each of the products that you cater to your customers. The product supply chain includes freight charges, transportation charges, employee charges, maintenance charges, and of course, the inventory charges. However, with dropshipping, you save a lot of money, thanks to the enormous cost-cutting involved. This, in turn, increases your profit margin.

You Get a Lot of Productive Time

The retail business requires a lot of time and management to be given continuously. In a small ecommerce business, which is mostly a start-up, tasks such as inventory management, employee management, stock reception and storage etc. can take up a lot of time, given the low number of people involved. With ecommerce drop shipping, half of your time is freed up, since as the retailer, you wouldn’t be directly involved in the shipment process. Also, you save a lot of time, that would otherwise have engaged the wholesaler to ship you the product, and you to ship the product to the customer. This certainly gives you more time to handle your business.

You Can Offer a Wide Range of Products

Today, being a specific product-oriented ecommerce store can leave you behind your competitors. Sure, you can go ahead and be the best in whatever product you are offering. But then, think of this- Why would a customer buy from a single-product store, instead of a store that sells numerous other products? A great benefit of ecommerce drop shipping is that you can partner with wholesalers from a wide range of industries and get to sell a great range of products on your ecommerce store.

How Can Dropshipping Benefit You as a Wholesaler?

Connects You to a Bigger Market

As a wholesale store owner, your customer base might be limited to physical stores, where the purchase cycle might often become occasional or temporary. However, when you are a dropshipping supplier, your wholesale business can easily partner with a great number of ecommerce platforms, which not only exposes your business to a more sophisticated and vast market, but you also get to sell your products fast.

Increases Customer Capabilities

Earlier, while the direct-to-customer concept was considered as not a good idea, today, with the increase of ecommerce drop shipping, more and more ecommerce stores are partnering with wholesalers for direct-to-customer sales. This certainly lets wholesalers show their ability to work directly with established ecommerce platforms, thus not only catering to the direct-to-customer sales model but also building and increasing trust and credibility.

Makes You a Great Choice for Retailers

Not everyone owns a great inventory of the bigshot retail stores. This is why dropship is growing at a good pace. With the increasing demand for dropshipping suppliers, you can easily become a choice for a branded retailer's dropship partnership with drop shipping companies.

What are the Drawbacks of Dropshipping?

While ecommerce drop shipping is a great way to meet your customers’ order, like everything else, it has its own cons.

Keeping Track of Inventory Problems

When you have your own inventory, despite the costs involved, it is easier to keep track of what products are in stock, and what products aren’t. However, with drop shipping, given that it’s the supplier’s inventory that you’re relying upon, it’s often difficult to ensure whether the products are in stock or not. That way, at times when you have a lot of orders to fulfil, you might lag behind in doing so due to insufficient stock in the supplier’s inventory.

The Difference in Shipping Charges

When it comes to Dropshipping, retail stores often work with a number of dropshipping suppliers. So, the shipping charges for each product differs from supplier to supplier. As a result, when a customer orders multiple products on your website, all of which need to be shipped from different suppliers, the shipping charges of each supplier is passed down to the customer, which might be a large charge.

Product Errors

As good as it is that with Dropshipping, you don’t need to get involved as the retailer, at times it can also prove to be a con. When you aren’t involved in the shipping process, it is obvious that you don’t have to handle the products being shipped to the customers. So, in case a faulty product is shipped to a customer, he/she would rather consider it as your mistake, given that customers are unaware of the drop shipping process.

How to Become a Dropshipping Supplier?

Know Your Niche

The most important part of starting a dropship business is to know which niche of products you want to sell. Don’t just sell anything. Decide on a product that you are genuinely interested in and something which you know can certainly benefit you.

  • Ensure that you select a niche that includes high-priced products because profit is what you are looking for.
  • Make sure your shipping costs are low. Customers look for products that are easier on their pockets. So if a customer gets charged with high shipping price, it’s obvious that he/she would rather buy from a place that is cheaper.
  • Your products should be attractive. Not everyone is a scrutinizing buyer. About 40% of the customers are impulse buyers. So your products should be able to appeal to such customers.
  • Your products should be special, i.e. don’t sell things that are already easily available. That would hardly make any difference.

Know Your Competitors

There is no business that doesn’t have competitors. The same goes for dropshipping as well. Know who your competitors are among the drop shipping companies. Do intense research on what products they offer, what their prices are, and how can your products be better and different than them.

Get Yourself a Retailer

With drop shipping growing amongst the ecommerce community, suppliers are high in demand. Get yourself a trusted supplier with whom you can easily partner. Make sure you choose your supplier carefully.

A Website is Important

Given that you are opening an ecommerce store, having a website is the most basic thing that you need to have. Also, since you are planning to opt for a dropship model for your business, look forward to hosting platforms that support drop shipping, a great example being Shopify dropshipping. Keep in mind to launch an aesthetically pleasing and lucrative website that can attract customers.

Spread the Word

No, I’m not talking about going around announcing about ecommerce store. But customers won’t come just from launching a website. You need to advertise it as well. The key, here, is to advertise your website online. Run campaigns on any and every platform you can- Google AdWords, Facebook, Instagram, Twitter. Let as many people know about your business.

Never Forget Your Data

Irrespective of what stage your business is at, it’s always wise to analyze and improve your reports. Track your data and growth using analytics tools, and based on that, keep improving your business strategies.

How to Set Up a Shopify Dropshipping Account?

Sign Up on Shopify

Sign up on Shopify, clicking on “Start your free trial”. Fill out the required details. Make sure you have thought of a unique name for your store. Once done, click on “Create Your Store.”

Sign Up On Shopify - Digital Ready

Once done, you’ll be redirected to the Administrator’s Dashboard.

Administrator Dashboard - Digital Ready

Upon scrolling down, you can find the option “Add Online Store”. Once you complete that, you can find a section called “Online Store” on your dashboard.

Dashboard: Online Store - Digital Ready

Finalize and Buy Your Domain

For a popular and successful business, it’s wise to have a personalized domain name.

Click on “Online Store”, and click on “Domain”. Following that, click on “Buy New Domain” on the top right corner of the page. That would give you a pop-up to add a domain.

Finalize and Buy Your Domain - Digital Ready

Upon purchasing your domain, you will be asked if you want all your traffic to be redirected to your new domain.

Purchasing Your Domain - Digital Ready

Align Your Email Forwarding

One of the most important components that should be taken care is the email forwarding of your store.

On the “Online Store”, click on “Domains”, where you’ll find “Manage Domain.”

Manage Your Domain on Online Store - Digital Ready

Select your domain and you will be redirected to the “Email Forwarding” section.

Email Forwarding - Digital Ready

Email forwarding is the process where the emails that your customers sent you at your service email ID gets forward to another email ID that you selected.

Apply a Good Theme to Your Store’s Website

It’s important that you choose a good theme for your website, as a visually appealing website attracts customers.

Click on “Online Store”, where you’ll find the “Themes” From there, choose the “Visit Theme Store” option.

Applying Theme for Your Online Store - Digital Ready

Add Pages for Shopify Dropshipping

Like every theme, Shopify’s themes have existing pages like the Home Page, Menu Bar, About Us etc. Apart from that, you need to add a page to your Dropshipping business.

Adding and editing pages with Shopify’s themes is quite easy. Select the “Pages” option from “Online Pages.”

Add Pages for Shopify Dropshipping - Digital Ready

Once you add your required pages, click on “Save.”

When you have added all your dropship pages, go to “Navigation” and check if your pages show up on the Home Page menu bar or not.

Add the List of Products that You Offer

Click on the “Products” tab on your dashboard.

Add the List of Products You Offer - Digital Ready

Next, click on the “Add Product”, where you’ll need to add your product details.

Add Product - Digital Ready

Click “Save” to store your product details.

You can also add “Collections”, which is a group of the same type of products together.

Click on “Collections” option in the “Products” section. Add a set of conditions that work as a standard, so that any product that meets those conditions can be added automatically to the Collection.

You can also duplicate the information for similar products, keeping minor changes, which saves your time and effort. To duplicate a product information, open the information of the existing product and click on “Duplicate.”

Duplicating Information - Digital Ready

Add a Customer Review Option

As an Ecommerce store, it is essential that you get customer reviews as word-of-mouth play a great role in influencing buying decisions.

Shopify has a great number of items that you can use from its App Store. One of the apps is “Free Customer Review.”

Check out the video below by Curious Themes Shopify Experts video to learn how to set up product reviews for your Shopify’s App Store.

Choose Your Shopify Plan

Once your 14-day trial gets over, you’ll need to choose a pricing plan, which comes in 4 variations.

Anyone who’s just beginning their business should start with the Basic pricing plan.

When you choose the Basic pricing plan, you’ll be known billing options.

Choose Your Shopify Plan - Digital Ready

Save All Your Shopify Settings

Go to the “Settings” tab and check all the information that you have entered in all the sections, such as titles, keywords, meta-descriptions etc

You can also work in other settings related to password and payment options

Once done, you can select the “Save” button.

You are all set with your Shopify dropshipping account.

How to Make Money with Shopify Dropshipping Account?

Increase Your Profit Margin

As I already discussed, choose products that can provide you with ample profit as compared to market prices, while still benefiting your customers. If you are just starting with your business, keep a few products in your store, which would certainly bring you a higher profit rate than just stuffing your ecommerce store with random products. Sell your products at rates higher than what you paid for.

Making Money With Shopify Account - Digital Ready

Add Offers

Customers love offers and discounts. Now, you might wonder how offering deals and discounts could benefit you. When you offer discounts to your customers on quality products, not only they immediately buy them out, but they also inform others about your offers. That way, when more people get to know about your discounts, your sales will certainly increase as more people start buying. That is always a win-win situation.

Adding Offers to Shopify Account - Digital Ready

Research As Much As You Can

First, people need to be able to find your store- that’s crucial. Make sure you work on your SEO to make your store visible. Also, give importance to the keywords used. Apart from traditional keywords, also add keywords that people might be using and which might be different than yours. That way, even when a buyer punches in a keyword that is even remotely connected to your website, they can be redirected to your ecommerce store. When that happens, your sales can easily rocket.

Keyword Research - Digital Ready

Do Not Forget to Mail Your Contacts

If anything, email or drip marketing is by far one of the most effective methods to boost your sales, or as in this case, make money. Make a list of the email IDs of all your buyers and prospective leads. At regular intervals, drop a subtle email, or a newsletter about your ecommerce store, informing about your store’s new products, or discounts, or seasonal additions. 59% of the times, customers click on an email link and often end up buying products. A great tactic indeed, right?

Mail Your Contacts - Digital Ready

For easier explanation, you can check out these videos.

If you are still not convinced as to why you need to start a dropship with Shopify, here are some success stories to motivate you.

How to Set Up Aliexpress Dropshipping Account?

This video below from Wholesale Ted gives a simplified and in-depth tutorial of how to dropshipping with Aliexpress.

How to Set Up an Oberlo Dropshipping Account?

Get your Oberlo dropshipping started with the below easy-to-learn tutorial video by The Real Success Dude.

Despite the few cons involved in ecommerce drop shipping, it is nevertheless one of the most sought-after trends in today’s ecommerce world. So, don’t shy away, get started with your Dropship account today!

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