Dropshipping is a popular ecommerce business model that allows online store owners to sell products without ever handling inventory. When a customer places an order, the store owner purchases the item from a third-party supplier, who then ships it directly to the customer. This arrangement allows entrepreneurs to start an online business with very little upfront investment.
Shopify is one of the most popular ecommerce platforms for running a dropshipping business. Its easy-to-use interface, wide range of features, and integration with major dropshipping apps make it an ideal solution for dropshippers. This comprehensive guide will walk you through how to start dropshipping on Shopify, from researching products to marketing your new store.
This comprehensive guide will walk through how to start a Shopify dropshipping business from A to Z. We’ll cover steps like:
- How to select a niche and target audience
- Where to find reliable dropshipping suppliers
- Tips for customizing your Shopify store setup
- Recommended apps for managing inventory
- Methods for marketing and promoting your products
- Strategies for retaining customers and increasing repeat sales
By the end, you’ll have a complete roadmap for launching your own successful Shopify dropshipping store step-by-step. Let’s get started!
Understand the Dropshipping Business Model
The first step to starting a dropshipping business on Shopify is to understand exactly how the dropshipping model works:
- The store owner sets up an online storefront and populates it with products to sell. These products are sourced from third-party suppliers and manufacturers.
- When a customer places an order, the store owner purchases the product from the supplier. The supplier packages and ships the order directly to the customer.
- The customer pays the retail price set by the store owner. The store owner keeps the profit margin between the wholesale price they paid the supplier and the retail price paid by the customer.
- At no point does the store owner take possession of the inventory. They simply act as a type of middleman between supplier and customer.
This arrangement provides some major benefits for entrepreneurs:
- Low startup costs – There’s no need to purchase and store inventory. Startup costs are limited to setting up the online store.
- Easy scalability – You can add or remove products from your store instantly based on demand. There are no limits on growth.
- Flexibility – Dropshipping allows location independence since you don’t deal with physical products.
- Wider product selection – You can sell many more types of products without worrying about storage and shipping complications.
However, dropshipping also comes with some potential drawbacks to consider:
- Low profit margins – There will be a markup between the supplier’s wholesale price and your retail price. This limits profit potential.
- Shipping delays – You rely on the supplier for quick order fulfillment and shipping. Errors and delays can negatively impact customers.
- Quality control – Lower margins can tempt some dropshippers to use cheaper, lower-quality suppliers. This can damage your brand reputation over time.
As long as you take steps to mitigate the potential downsides, dropshipping offers an attractive opportunity for ecommerce beginners. Shopify’s features make the model even easier to implement successfully.
Choose a Product Niche
The first step is deciding what types of products you want to sell. Analyze different niches to find one that offers high sales potential and low competition.
Consider niches like:
- Pet products
- Arts and crafts
- Activewear
- Home decor
- Toys and games
- Jewelry making supplies
Ideally your niche should have an enthusiastic target audience that isn’t being served by major retailers. Find gaps in the market that your business can fill.
Research tools like Google Trends, Amazon’s bestsellers list, and Etsy can help assess demand for different niches. Make sure there is sufficient search volume and purchase intent for the products you want to sell.
Avoid extremely saturated markets like consumer electronics that will be difficult to compete in as a new store. Carefully selecting your niche is key – you want just enough competition to validate the opportunity while still having room to capture market share.
Choose a Dropshipping Supplier
Your supplier will be one of the most important business relationships when dropshipping on Shopify. Take your time to find suppliers that offer:
- High-quality products – Review supplier merchandise thoroughly before listing it in your store. Poorly made products will generate complaints and returns.
- Low wholesale prices – Look for suppliers that provide volume discounts so you can maximize margins.
- Fast order fulfillment – The supplier should be able to ship most orders within 1-3 business days.
- Reliable customer service – You need to feel confident that the supplier will resolve any issues promptly.
- Packaging customization – Some suppliers allow you to use custom shipping materials like branded boxes and inserts.
There are a few options for sourcing dropshipping suppliers:
Dropshipping Marketplaces
Marketplaces like Spocket and Modalyst offer thousands of pre-vetted suppliers so you can easily compare products and pricing. Most integrate seamlessly with Shopify.
Pros
- Huge variety of products
- Suppliers already vetted
- Shopify integrations
Cons
- Membership fees
- Higher competition
Wholesale Directories
Sites like SaleHoo and WorldWideBrands provide searchable databases of manufacturers and wholesalers. You’ll need to vet suppliers yourself.
Pros
- Lower membership fees
- Contact suppliers directly
Cons
- No supplier vetting
- Limited Shopify integration
AliExpress
This Chinese marketplace has a massive selection of cheap products available to dropship. Vet suppliers carefully for quality and reliability.
Pros
- Extremely low product cost
- Millions of product listings
Cons
- Shipping takes 2-4 weeks
- Many low-quality suppliers
For most beginners, a marketplace like Spocket or Modalyst is the easiest way to start finding quality suppliers that integrate with Shopify.
Sign Up for Shopify
Now it’s time to sign up for your Shopify store. Shopify offers a free 14-day trial so you can test the platform. Follow these steps:
- Go to www.shopify.com and click on “Start your free trial”.
- Enter your store name, email, and password. Your store name will become part of your Shopify URL.
- Select the country you are based in. Shopify will optimize settings like taxes and shipping accordingly.
- Choose whether you plan to sell online, in-person, or both.
- On the next screen, choose your preferred Shopify plan. The Basic Shopify plan is a good starting point. You can always upgrade later as your business grows.
- If you plan to sell in-person, Shopify will help you get set up with POS hardware. Select options to continue.
- Review and agree to Shopify’s Terms of Service.
That’s it – your new Shopify store is ready to go! The platform will guide you through some optional setup steps to help customize your store.
Shopify offers hundreds of apps to expand functionality. Dropshipping apps are essential for importing products from multiple suppliers into your store.
Optimize Store Settings
Before importing products, you should optimize a few key settings for your dropshipping business model:
Shipping Zones
Shopify allows you to create different shipping zones with options and rates. Most dropshippers use a single zone for domestic and international orders.
Under Settings > Shipping, delete any default shipping zones. Create a new zone called “Rest of World” and set the zone to cover everywhere unassigned on the map.
Add a shipping method called “Standard Shipping” and set the rate to $0. This enables free shipping on all orders.
Payment Providers
Of course you’ll need to get paid! Shopify integrates with 100+ payment providers like Stripe, PayPal, and Amazon Pay.
Based on your business location and needs, research and select 1-2 providers to offer at checkout under Settings > Payments.
PayPal is a smart starting option since it already has millions of customer accounts.
Enable Shop Pay installment plans to increase average order value by letting customers split costs over several months.
Streamline checkout conversion by offering flexible payment methods tailored to your target audience.
Configure Taxes
Shopify optimizes required tax calculations and shipping options based on your business location and selling channels.
Under Settings > Taxes:
- Add your business address
- Enable tax collection just for orders shipped from that address.
Shopify will now automatically calculate sales tax rates at checkout based on delivery destinations.
Install a Dropshipping App
Shopify offers hundreds of apps to expand functionality. Dropshipping apps are essential for importing products from multiple suppliers into your store.
Popular options include:
Spocket – Thousands of pre-vetted suppliers. Seamless Shopify integration.
Dsers– Easy importing from AliExpress.
Modalyst – Curated selection of name brand products.
DSers – Comparison tool for AliExpress suppliers.
Browse apps in the Shopify App Store and read reviews. Install your chosen app and link your supplier accounts so you can start importing products. Most apps provide tutorials on proper setup and usage.
Quality dropshipping apps eliminate serious legwork by pulling supplier inventory into your Shopify dashboard for centralized product management.
Import Products from Supplier
Once your store setup is optimized for dropshipping, it’s time to import products to sell. Follow these steps:
- Install your desired dropshipping app from the Shopify App Store. Popular options include Spocket, Modalyst, and Oberlo.
- Link your supplier accounts so products can sync to your store.
- Browse your connected supplier catalogs within the app to find products to import.
- Use the app to select products and add them to your store. The listings will be auto-filled with supplier data.
- In your Shopify dashboard, review each imported product. Adjust the title, description, images, and price as needed.
- Add new product variants if available, like different colors or sizes of a t-shirt.
- Set inventory quantities to any number. Orders will be dropshipped on-demand.
- Repeat for all additional products you want to add to your Shopify store.
Take your time selecting quality products that provide good profit margin. Curate your selections around a specific brand identity.
Customize Your Storefront
With products imported, it’s time to customize the look and feel of your Shopify store:
Choose a Theme
Shopify offers a wide selection of free and paid themes to dictate your store’s design. Browse themes under Online Store > Themes. Consider options like:
- Debut – A popular free theme with a simple, customizable layout.
- Venture – A minimalist paid theme great for fashion and apparel stores.
- Supply – A clean, modern paid theme designed specifically for dropshipping stores.
Install your desired theme and preview how it changes your storefront.
Configure Theme Settings
Under Online Store > Themes, click “Customize” to editing the theme’s settings:
- Upload your business logo under Site Logo.
- Pick coordinating fonts, colors, and image styles under Typography and Colors.
- Adjust homepage layouts and product displays under Sections and Products.
- Enable features like currency conversion bars and social media icons.
Tweak settings until your storefront matches your desired branding.
Add Branding Elements
Further enhance trust and credibility by adding pages, content and images that share your brand story and mission:
- About Us page
- Company history
- Founder bios
- Brand messaging
- Product photos
- Blog posts
A cohesive brand identity is key for converting first-time visitors into customers. Take time perfecting your branding and store presentation.
Process Orders and Fulfillment
A key advantage of Shopify for dropshipping is automatic order processing and fulfillment. Here is how it works:
- A customer purchases a product from your Shopify store.
- Shopify sends the order details to your connected supplier app.
- The app communicates the order to your supplier.
- Your supplier ships the product directly to the customer’s address.
- The supplier updates tracking information in the app.
- The tracking details sync automatically to the order details in your Shopify dashboard.
This automation eliminates the manual work traditionally required in a dropshipping model. Be sure to monitor new orders in your dashboard and reach out to suppliers if issues arise.
You can also leverage Shopify’s built-in features to enhance the customer experience:
- Send automatic order confirmation emails
- Provide shipping carrier tracking information
- Set up automated abandoned cart recovery emails
- Enable customers to print return labels from account
The easier you make the post-purchase experience, the more likely customers will purchase from you again.
Market and Promote Your Store
Simply loading products and setting up your Shopify store is not enough – you need to actively promote your new dropshipping business to drive sales.
On-Site Marketing
There are several built-in ways to market your products directly on your Shopify store:
- Display sale banners and collection promotions on your homepage.
- Cross-sell complementary products on product pages.
- Offer customers discounts for signing up for your email list.
- Run retargeting ads on social media to recent site visitors.
SEO Optimization
Search engine optimization (SEO) helps customers find your Shopify dropshipping store via search engines like Google.
Start with keyword research using tools like Google’s Keyword Planner to identify relevant search terms around your niche.
Incorporate target keywords in your:
- Page titles and meta descriptions
- Blog and product content
- Image file names and alt text
- Product tags
Creating blog posts and guides targeting your focus keywords will also help improve SEO. Link out to external resources to build authority.
Additionally, gain backlinks from relevant sites and directories to boost domain authority over time.
With optimized technical SEO and content, your store will rank higher in search results and receive more qualified organic traffic.
Social Media Marketing
Simply loading products won’t drive sales. You need to actively promote your Shopify dropshipping store on social platforms like Facebook, Instagram, and TikTok.
Post Engaging Content
- Product images and videos
- New arrivals
- Customer styled looks
- Behind-the-scenes business content
- Discounts and promotions
- Holiday sales events
Run Paid Ads
- Target interest-based demographics
- Retarget recent site visitors
- Goal-optimized conversion campaigns
- Dynamic product catalog ads
Partner With Influencers
- Sponsor product reviews and features
- Co-create media and assets
- Negotiate affiliate marketing deals
- Leverage giveaways and contests
Social presence converts browsers into buyers. Post daily and be responsive to all comments and inquiries.
Email Marketing
Email enables direct, targeted communication with leads and customers. Use emails to:
Promote Discounts and Sales
- Offer coupon codes or % off entire orders
- Spotlight flash sales and daily deals
- Highlight clearance and overstock items
- Share free shipping thresholds
Send Product Recommendations
- New arrivals
- Back in stock notices
- Complementary purchases
- Items similar to recent views
- Abandoned cart reminders
Provide Helpful Content
- How to guides
- Styling tips
- Brand storytelling
- Behind-the-scenes
- Industry insights
- Customer success stories
Collect Feedback
- Customer satisfaction surveys
- Product review requests
- Feedback forms
Well-planned email campaigns drive repeat purchases from existing buyers while capturing new leads. Just be careful not to overdo promotions – focus more on value.
Analyze and Refine Your Business
The work doesn’t stop once your Shopify dropshipping store is up and running. You need to continually analyze your business data to identify opportunities for improvement.
Use Shopify’s built-in analytics and reports to gain insights about:
- Traffic sources – Which channels drive the most store visitors?
- Top products – Which products have the highest sales and margins?
- Conversion rates – How many visitors complete a purchase?
- Customer demographics – What are your average customer ages, locations, etc?
- Peak sales times – When do you receive the most orders?
- Inventory turnover – How quickly are you selling through products?
Lean on this data to refine your marketing initiatives, product mix, discounts, and more. The more insight you have into your business and customers, the more effectively you can tweak your strategies over time.
You can also leverage apps like Google Analytics for expanded ecommerce tracking. Integrate analytics platforms with Shopify for a comprehensive view of your key metrics.
Provide Excellent Customer Service
Dropshipping depends on maintaining positive customer relationships since you control fulfillment so little.
Use Shopify features to offer an exceptional post-purchase experience:
- Automated order confirmations
- Shipping carrier tracking integrations
- Customer account dashboard
- Self-service return label printing
- Informal tone in communications
Also build out dedicated help, FAQ, and support pages on your website. List contact info like phone, email, live chat, and social channels.
Be highly responsive to all customer inquiries. Take responsibility for issues – never simply blame the supplier. Offer refunds or discounts when appropriate to save relationships.
Providing caring, personalized support helps turn one-time buyers into loyal brand advocates. Put in the effort.
Leverage Automation for Order Processing
Shopify seamlessly automates order processing and fulfillment when using a dropshipping model.
Once an order is placed by a customer:
- Shopify sends details like items purchased and shipping address to your connected supplier app.
- The app communicates the order information to your chosen supplier.
- Your supplier packages and ships the products directly to the customer’s address.
- The supplier updates tracking information and order status in the app.
- Automated tracking details sync from the app into the Shopify order details.
This eliminates serious administrative work traditionally required in dropshipping. But always monitor new orders and follow up with suppliers if any issues arise.
Continuously Test and Improve Listings
As your Shopify dropshipping store matures, regularly test and iterate on product listings to maximize conversions.
Try variations like:
- Different product titles
- Long vs short descriptions
- Lifestyle images vs flat product shots
- Comparison size charts for similar items
- Reviews and testimonials
- Risk reversal guarantees
- Bundles and package deals
Pay attention to which listing experiments increase sales. Double down on the messaging, content formats, and features that perform best.
Avoid getting complacent with product pages. Small tweaks can make noticeable impacts on conversion rates.
Build an Email List of Potential Customers
Expand your marketing reach by collecting emails from site visitors interested in your brand.
Offer incentives in popups and banners for visitors to join your mailing list like:
- Discounts for first-time subscribers
- Exclusive promo codes
- Early access to new products
- Free shipping on their first order
Send a compelling welcome email to new subscribers to get them engaged with your brand right away.
Over time, email enables far more personalized – and cost effective – marketing outreach compared to social ads and other channels.
Offer Incentives for Newsletter Signups
Encouraging email list signups requires compelling incentives to exchange contact information. Some options:
Discounts
- 15% off first purchase
- Free shipping
- $10 store credit
- BOGO 50% off
Content Perks
- Exclusive promo codes
- Early access to new products
- First pick on limited inventory
- Members only drawings
Gifts
- Free product samples
- Surprise gifts and swag
- Birthday rewards
- Seasonal freebies
VIP Status
- Elite customer badges
- Priority support access
- Expedited shipping
- Extended return periods
Get creative with the incentives you offer – go beyond typical first-purchase discounts. Just ensure the value exchange is compelling.
Create Loyalty Programs for Repeat Buyers
It’s far easier to get repeat purchases from existing buyers than continuously acquire new customers.
That’s why effective loyalty programs are critical for dropshipping brands.
Popular options include:
Points Programs
Customers earn points for actions like reviews, referrals, social shares. Points can be redeemed for discounts or free products.
Tiered Rewards
Higher tiers provide increased benefits like free expedited shipping, extended return windows, dedicated support reps and more. Rises require spending thresholds.
Gamification
Offer badges, leaderboards, and status levels for engagement milestones. Creates a fun motivation to stay active.
Birthday Perks
Give customers discounts, free gifts, early access to sales, or other incentives around their special day.
VIP Events
Host special webinars, meetups, early product launches, and contests exclusively for your top tier members.
Subscription Discounts
Offer lower prices, extra perks, or extended free shipping periods for customers that sign up for recurring deliveries of staple products.
The more valued a customer feels by your brand, the higher their lifetime value becomes. Invest in loyalty.
Recap and Next Steps
Launching a profitable dropshipping business on Shopify does require upfront work – but this guide outlined a clear roadmap for getting started:
- Learn the dropshipping model and assess if it’s a good fit.
- Carefully vet and choose your product suppliers.
- Sign up for Shopify and configure your store settings.
- Import products from suppliers into your store.
- Customize the design of your Shopify storefront.
- Leverage built-in automation for order processing.
- Actively market and promote your shop across channels.
- Use analytics and data to continually refine your business.
By following each step carefully, you can minimize hiccups and start generating sales more quickly. Be patient – building an audience and profitable ecommerce brand takes time. Stick with it, learn from mistakes, and your dropshipping business has huge potential for success.
Frequently Asked Questions
Here are answers to some common questions people have about starting a dropshipping business on Shopify:
How much does it cost to start dropshipping on Shopify?
Shopify offers a free 14-day trial. Paid plans start at $29/month for the Shopify Basic plan. Apps like Spocket have free plans or start at $24.99/month. So costs can be as little as $29 for Shopify plan only.
Is dropshipping allowed on Shopify?
Yes, Shopify is highly optimized for dropshipping businesses. The platform has no issues with selling products via a dropshipping model.
Do I need a supplier before creating a Shopify store?
No, you can create your Shopify store first. Get the platform setup and customized, then start researching and integrating suppliers.
How do I find dropshipping suppliers for Shopify?
Marketplaces like Spocket and Modalyst make it easy to find pre-vetted suppliers. You can also use directories like SaleHoo or search platforms like AliExpress.
What is the best Shopify plan for dropshipping?
Shopify’s Basic plan works well for new dropshipping businesses. It has all the core features you need to get started. Upgrade to Shopify Standard or Advanced as your store grows.
Can I use multiple suppliers for one Shopify store?
Yes, absolutely. There are no limits on how many suppliers you can integrate with your Shopify dropshipping store using apps.
How much money can you make dropshipping on Shopify?
Income potential varies widely. Most new Shopify dropshippers earn a few hundred to a few thousand dollars per month. Top performers can earn over $100k/year.
Conclusion
Dropshipping with Shopify is an excellent way for ecommerce newcomers to get started with an online business. Shopify handles most of the heavy lifting when it comes to store setup, order processing, and fulfillment.
Focus your efforts on product research, sensible financial planning, marketing, and customer experience. Don’t expect overnight success – growing a profitable dropshipping operation takes serious dedication over time. But if you stick with it, a Shopify dropshipping business can be very rewarding.
