After spending time on Instagram, YouTube, or Facebook, you’ve probably seen a few success stories here and there. And online business triumphs, in particular, are something that you may be especially familiar with.
If you’ve paid close attention to some of those stories, you’ll notice that there’s one term that gets mentioned often:
Dropshipping.
Now, make no mistake—dropshipping is far from being a pyramid scheme or a highly-exclusive opportunity. In fact, it’s one of the most accessible e-commerce business models out there that anyone can get into.
Among the many ways to start with this online business model, Shopify Dropshipping is the ideal platform to start with. And once you take all the necessary details and steps into mind, you’ll be able to capitalize on the abundance of opportunities it presents.
So, if you’re intent on using the internet and growing spending power to build an empire with lots of potential, here’s everything you need to know:
Before going over what you need to know about succeeding in dropshipping, it’s important to know what it is first.
Dropshipping is a business model that for a while was regarded as unconventional. This is because compared to traditional fulfillment models, it allows companies to sell and distribute products without having to:
From a technical perspective, this business model can be described as a mix of product sourcing and fulfillment models. This is because dropshipping entails delivering products to customers after their purchases, which falls under the definition of a fulfillment model. It also involves identifying both products that can be sold and partners that can supply them, which makes it a product sourcing method, too.
Companies operate with this business model by partnering with specialized dropship suppliers that handle product and logistics-related work for them. Tasks that are left to the latter typically fall along the lines of:
Process-wise, dropshipping begins as soon as a customer places an order. Regardless of what’s being sold, the average dropshipping operation can be summed up in four steps:
With this model, aspiring entrepreneurs have a lower barrier to entry because it’s not as capital-intensive as traditional business models. They don’t have to worry about inventory or handling logistics—and that’s what helped dropshipping become the $128 billion industry it is today!
The dropshipping business model, to the relief of many, is completely legal because companies are allowed to outsource processes. So, you can still operate as a retailer even if you don’t keep inventory or have a warehouse space!
It’s worth noting, though, that dropshipping businesses aren’t exempt from complying with legal guidelines. If you want your operations to go off without a hitch, you’ll need to follow all possible compliance rules by:
Dropshipping with Shopify has allowed thousands of business owners to become successful because it’s jam-packed with many advantages. To give you a better idea of why it’s worth giving a shot, here’s a list of benefits you can expect to enjoy with it:
If you want to start an online business but don’t have deep pockets to roll with, then there’s no need to worry because Shopify dropshipping requires minimal capital.
Because all of the supply and logistics costs are left to a partner supplier, setting up your dropship business comes at little-to-no cost. All you’ll have to spend on are the associated costs with setting up your storefront—such as:
With Shopify dropshipping, long gone are the days of time-intensive formalities and countless hours of planning.
Setting up a shop according to a business model like this is easy because it’s simple to both understand and put into practice. Getting a dropshipping business off the ground and into operation only requires three steps: finding a supplier, setting up a Shopify website, and selling goods (and advertising them, as well)
Most people that want to start businesses shy away from doing so because they’re afraid of accruing too much risk. Fortunately, dropshipping takes a whole lot of it out of the picture.
With this business model, you won’t have to shell out money to acquire and replenish stock or sign lease agreements for storage spaces. This means that you don’t risk much (aside from your time, which you won’t spend a lot of)—even if none of your products sell!
Ever dreamt about running a multi-million-dollar business from the beach?
Well, Shopify dropshipping makes this entirely possible.
The beauty of starting a business like this is that it’s location-independent and doesn’t require any employees. You can handle sales, tend to customers, and make money from literally any place in the world that has an internet connection!
One of the best parts of Shopify dropshipping is that scaling your operations is the easiest it will ever be.
Unlike traditional retail business models, this approach won’t require you to shell out more capital and do more work if you want to grow. All you’ll have to do to scale your dropshipping business is:
Like any business model, Shopify dropshipping also has its fair share of drawbacks that entrepreneurs can experience. But, compared to other approaches, it has fewer disadvantages that you’ll need to worry about—namely:
The biggest drawback of Shopify dropshipping, by far, is that people who do it will deal with heaps of competition around them.
Competitiveness is abundant in the dropshipping industry because the business model itself is both attractive and popular. And given that it’s easy to start, more retailers pour into every product category and segment every year.
The best way to bypass the high levels of competition in Shopify dropshipping is to pick products with fewer retailers. But, you can also edge out the competition by either partnering with suppliers that deliver better quality products or higher service quality!
Given that you won’t be manufacturing or shipping products yourself, your profit margins are going to be at the mercy of your suppliers. Shopify dropshipping is known for having slightly lower profit margins because vendors charge higher prices for things like:
So, if you want to generate a fortune from dropshipping, then you’ll need to focus on your sales numbers and prices!
Another common issue with dropshipping is that sellers have complete liability whenever something goes wrong with a transaction.
Usually, issues arise whenever businesses can’t fulfill orders because a supplier makes a mistake or suddenly can’t supply a product. This, in turn, makes it important for you to choose the right vendor to partner up with so that you can minimize such issues!
Hitting the ground running with your Shopify dropshipping business is all about setting a proper foundation that works. Although there are many ways to approach the process of setting up your shop and running it, here are four practices you can’t miss out on:
Ask any of the world’s most successful dropshipping business owners about what the hardest task is and they’d tell you that it’s choosing what to sell.
With more products becoming available to sell year after year, it can be tricky to settle on a list of options to stick to. Although you can choose anything and sell it with no risk at all, the possibilities and opportunity costs that come about make things difficult.
If you want to put your time and effort into the right range of products, then you can ease the decision-making process by identifying gaps in the market—such as watching out for products that customers didn’t know they needed. It’s also important to keep an eye out for which products have a high demand (but make sure what you offer is better than other options out there). Finally, identifying products that will allow you to offer unique add-on services (such as custom printing) is a key component of deciding what to sell.
Thanks to its systems, Shopify makes it easy for people to set up their dropshipping businesses in under an hour, without the need for coding.
Of course, that just covers the basics—now comes the part of making your store stand out well enough to get more sales.
The best approach to making the most out of your Shopify dropshipping business is to design well and optimize better. This involves tinkering a lot with your online retail shop or store and equipping it well enough to attract, intrigue, and convert.
If you want to design and optimize your Shopify store for success, here are some key tips to look into:
Apart from your actual online store, another factor that influences the success of your Shopify dropshipping business is your marketing strategy.
For one, you must build a strategy that helps you promote both your store and your products to reach a broader range of customers. This can be done with the help of approaches like:
On top of using tools to broaden the reach of your marketing strategy and campaigns, it also pays to look into how you interact with your customers. Applying strategies like social selling can help you retain the shoppers that come on your website and turn them into repeat buyers!
The thing about Shopify dropshipping is that it isn’t only a business model that’s easy to start.
It’s also easy to test in many ways without breaking the bank—especially when it comes to A/B or split testing.
Testing and troubleshooting are the bread and butter of Shopify dropshipping success because it helps with maintaining a competitive edge. Best practice dictates that dropshippers should regularly run A/B tests on variables like:
As mentioned previously, Shopify dropshipping is a business model that’s straightforward enough to set up in a short time. To give you a better idea of what you need to do so you can get your shop up and running, here’s a step-by-step guide:
To start your dropshipping business, you’ll first need to get on the Shopify website to register your email and create your store.
It’s worth noting that you’ll be expected to type in your business name during registration, so make sure to have one ready. But, if you don’t have one yet, then you’re more than free to use Shopify’s free business name generator!
After putting in all the necessary details, you’ll have access to:
Once you have your Shopify account set up, you can move on to setting up and designing your online storefront.
For starters, you’ll need to pick a theme that will lay out the design of your store. As we mentioned before, you can pick any of Shopify’s free themes—but you can have a custom one commission, as well!
After picking your theme, you can move on to adding tools or widgets that can help your customers interact with your site better. Tools like Zoko’s WhatsApp CRM for Shopify Websites can increase the impact and approachability of your website!
Now that you’ve gotten the front end of your Shopify dropshipping store out of the way, it’s time to take care of things in the back end. This means that you’ll need to optimize your settings so that you ensure that your website works properly.
While you don’t need to get into the nitty-gritty of setting set-ups, here are the five main settings you’ll need to work on:
Congratulations, you finally have your Shopify store all set up—now is the time to add products to it so you’re officially open for business!
Usually, you can manually add your products and their photos, videos, and descriptions with Shopify’s site entry tools. But, you can make things easier for yourself with the help of a dropshipping app that will let you import and add products from supplier websites to your store!
It may have smaller profit margins than wholesaling and manufacturing, but Shopify dropshipping still generates attractive gains.
When you look into the numbers, you’ll see that profit margins for dropshipped products can range anywhere from 15% to 25%. But, the figures shoot up for luxury items and durables because products like jewelry and electronics can generate profit margins of up to 100%!
So, if you want to set a target figure, you must look into the profit margins of your products and work your way from there!
Although it’s a business model that anyone can pick up, Shopify dropshipping admittedly isn’t for everybody.
Why?
Well, it’s because this business model meshes well with certain types of entrepreneurs—but doesn’t align well with the business goals of others. This is why it’s important to know if Shopify dropshipping is right for you or not so that you put your resources in the right places!
Now, you should try your hand at Shopify dropshipping if:
And, you should steer clear of Shopify dropshipping if:
With the global e-commerce market growing bigger by the day, there’s no better time to start an online business than now. And, with the help of Shopify dropshipping, you can tap into this opportunity without going through the hardships of traditional business models!
By applying the right strategy and putting best practices into play, you’ll get to build a business that helps you make serious profit with minimal effort!
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