Last updated - June 7, 2022
Dropshipping is an interesting model of selling goods for remote entrepreneurs. This model allows a dropshipper only to create or use existing marketplaces; the production of goods and their delivery are the tasks of the chosen Manufacturer (it could be a retailer or a wholesaler). A dropshipper can work with many Manufacturers that make a choice of possible goods to dropship enormous. The original investments can be minimal, only for registration for Internet domains and marketplaces; there is no need to store any dropshipper goods.
A dropshipper should have basic skills in marketing and online internet shop structure.
- Find a marketplace or create an online platform to sell goods. Perform marketing research to find the better product to sell. There are several popular dropshipping marketplaces, such as eBay, Amazon, Shopify, BriskSale, BlueJay.
- Find a Manufacturer willing to work with a dropshipper (not all Manufactures have to care about single deliveries to Customers).
Further dropshipping activities include creating a profile on the marketplaces, placing their goods, taking orders, and sending them to the Manufacturer, checking and answering reviews, mitigating complaints and returns, and maintaining good mutually beneficial relationships with the Manufacturer.
Let’s dig into more details if starting a new dropshipping business on the example of Shopify marketplace.
Why Dropshipping on Shopify?
Before starting a dropshipping business, you need to register your business legally. All Manufacturers and marketplaces work only with legitimate business partners. The further steps are a little bit different depending on the marketplace you choose.
Shopify is one of the largest e-commerce platforms that provide an easy start for beginners: the software will automatically create the profile with product cards with a monthly fee. To keep it moving, fewer efforts are required. As a result, more than one million entrepreneurs are already using Shopify for their business.
The dropshipping on Shopify consists of the following steps:
- Find a product to sell
- Qualification of Manufacturer/Supplier
- Proper market program and product representation
How to find a product to sell on Shopify
Shopify provides analytics for bestsellers that help a beginner to find a product to start dropshipping. Another solution is to check, for example, via Google Keyword Planner, the most popular request in search engines; this also helps find how customers mention the desired products. In addition, the internet provides a variety of other marketing reports for bestseller categories available for free and paid ones, based on the specific request of gender, location, price, market growth, etc.
Shopify bestsellers categories are hobby products and business products (perfect option as it consists of large quantities in one place of delivery). An excellent niche is products with repeat purchases providing the opportunity to receive loyal, constant Customers. It is better to start from the goods in the price range of 40-200 dollars that provide maximum profit and the more significant number of Customers, including impulse buyers. The smaller and cheaper items are easier and cheaper to deliver to Customers. Larger order quantities can be achieved with accessories. Still, it is difficult to find one Manufacturer or Retailer to perform this order, and without storage, it is impossible to execute within the dropshipping business model.
If your store consists of one product, the choice should be executed more thoroughly. The multi-products store is easier to maintain at a good level, you can choose for example products per each season.
Qualification of Manufacturer/Supplier
The source of goods can also be linked with software products; this will help control quantities, Manufacturer or Retailer prices to prevent your money and Customer’s loss. Shopify dropshipping automation solution includes such suppliers as Walmart, Aliexpress, Alibaba, and more. Shopify also obtains its app with Manufacturers and Retailers for Dropshippers. The software provides an opportunity to choose your Supplier based on geolocation, brand, and quality.
If you choose the Manufacturer on your own, do not forget to obtain responses to the essential question as:
- Customization possibility
- Special labeling
- Additional fees for best prices (wholesales)
- The Customer’s order representation
- Invoicing process
- Return/ damages and missing policy
- Delivery terms
- The actual Manufacturer of the goods
The more specific you will be, the more profitable your business will be as a good Manufacturer eliminates the most serious difficulties in dropshipping business. An ideal situation is if the Manufacturer provides to a dropshipper dedicated manager.
Marketing on Shopify
Even though Shopify has stable traffic, a dropshipper must prepare a catching marketing program. Also, it is required to prepare a product card with the best representation of the goods. To understand the latest trends, the social networks and the top search results in google are the better support. In addition, you can see the best visualization concepts of goods representing (the coloring schemes, trends in models, etc.).
You need to establish some discount system and catching bonuses stimulating your Customers to choose you in the competitive market. Do not forget to ask your Supplier to put your logo on the package to increase the chance of returning the Customer to you after receiving goods. In the first six months, 75% of dropshipper working time is dedicated to marketing, traffic generation, and SEO analysis. A dropshipper has to understand the target auditory. It is crucial to present the goods as a valuable experience for Customers.
Even though that there are several challenges of each dropshipper as:
- This business is very competitive as usual a dropshipper sells not unique goods.
- All Manufacturer errors with quality of goods and delivery terms are subject to complaints only to a dropshipper.
- The significant margin is difficult to obtain, going back to point 1.
But a dropshipping business provides an opportunity for Customers to buy goods with a retail price that they could not get directly as a Manufacturer and retailers prefer to sell in bulk and with a legitimate business. So, there are always Customers for dropshippers.
A dropshipper is focused on marketing and customer services, not like other selling business models on warehousing and logistics. Considering fewer investments, a dropshipping business is a perfect start for an e-commerce business and its easy scaling. Using additional software described earlier, as well as Shopify built-in features, the start is smooth.