How Does Shopify Dropshipping Work? (Easy Beginners Guide)

A lot of people use Shopify for dropshipping…

With this in mind i’ve decided to put together this article so you know everything there is to know about Shopify Dropshipping.

Dropshipping has become a very popular way to make money online…

But there is some important things you should know before jumping straight in.

When dropshipping you don’t have to keep the products you are selling in stock.

Your work is on the marketing side of things…

This might sound confusing but trust me it’s pretty straight forward.

  1. A customer places an order on a dropshippers store
  2. The order is then transferred to a manufacturer
  3. The manufacturer then ships the order directly to the customer

Ok that sounds pretty straight forward but how does dropshipping on Shopify work?

So, as a shopify dropshipping business owner, your storefront sells products…

A customer places an order…

This is then sent to a third party supplier who fulfills the order by shipping the product out to the customer.

Here is a question i’ve been asked a few times…

Why wouldn’t that person buy the product from the manufacturer directly?

Well, there is a number of reasons for this.

Attention is the asset my friend and the dropshipping company has the attention of the customer.

The chances are that the customer doesn’t even know that the manufacturer exists…

Another reason is the customers experience, a lot of customers will pay more for the complete marketing experience…

Some customers would prefer to be convinced by persuasive marketing rather than looking around for the cheapest option!

It should also be said that some of the products dropshippers are selling aren’t available to the general public.

Aliexpress for example is actually a retail website and doesn’t offer true wholesale prices…

Is Dropshipping On Shopify Worth It?

There are definitely pros and cons to dropshipping on Shopify.

Let’s look at some of the pros first…

  1. A dropshipper doesn’t have to worry about the headaches that come with inventory management…
  2. Less expense – Buying thousands of units upfront is expensive (Trust me it’s what i do)
  3. Bigger product range – Without the worry of storage and expense you can give your customers more choice
  4. Less Risk – You don’t have to purchases products upfront

Now let’s look at some of the cons…

  1. Reliance on your supplier – If a product goes wild you’re limited to the stock they hold
  2. Less control with fulfillment – You’re vulnerable to any fulfillment partner mistakes
  3. Price competition – You’ll be paying a higher price per unit when not buying in bulk

A lot of people think that dropshipping is another one of those get rich quick schemes…

People get excited about the opportunity to make good money whilst you sleep.

This is actually far from the truth.

Dropshipping requires a great deal of hard work.

Like with most business ventures that make you money whilst you sleep, there is a lot of work that goes in before this actually happens.

Fortunately, there are tools and functions to help make your life a lot easier…

One of these tools is Shopify (Click Here To Read My Dummies Guide).

So you now know that your success as a dropshipper relies on your ability to market the product.

This is where shopify comes in…

With shopify any entrepreneur has to opportunity to create their own sleep looking online store.

In the video below i build a shopify store from scratch in around 10 minutes…

Trust me it’s easy, anyone can do it…

Also Shopify can integrate with pretty much anything, as a drop shipper you’ll want to integrate with quite a few different apps.

As a dropshipper you are going to need a website if you want to market your chosen products effectively.

You don’t have to use Shopify… There are lots of other alternatives you can consider.

I like Shopify and you can’t really argue with the platforms popularity.. It’s a very good option in my opinion.

Why Use Shopify for Dropshipping?

How Does Shopify Dropshipping Work?

As mentioned you don’t have to use Shopify, there are plenty of other eCommerce solutions out there.

Shopify is popular with drop-shippers for a few reasons…

  1. It’s Dropshipper-Friendly – Shopify offers different solutions, features, and tools that are specifically there for dropshipping.
  2. Seamless Integrations – The platform is constantly able to add integrations and improve their existing features
  3. Ease Of Use – As you can see in the video above it’s very easy for you to design and set up your own online store.
  4. Payment ProcessingLife is made easy with Shopify payments.

I could go on and on but let’s keep this article snappy and to the point.

Shopify – How Does It Work?

Shopify is essentially the foundation of your online store.

It serves as the skeleton from which you can start your online business.

Better yet don’t have to worry about the annual or monthly hosting fees…

By building your online store with Shopify you benefit from them hosting and managing it all for you.

If you are planning to build and scale your store, Shopify can grow with you.

There is a reason the majority of successful dropshippers use shopify.

Anyway, let’s talk about how you can get started…

Getting Started with Shopify For Dropshipping

To ensure that you have a successful dropshipping business, you’ll need to make sure you’ve covered a few bases.

Niche and Product Research

First things first, you need to find the product/s you want to sell.

Then you’ll need to take the time to fully understand your target market.

Take the time to look at your most successful competitors are there any trending colour schemes or things you can do better?

Usually dropshippers do not create and sell original products…

The chances are that you’ll be selling the same product as a lot of other people.

Your success will depend on your ability to market the product…

It’s your job to persuade your customers to go ahead and make the purchase.

By understanding your target market you can make sure that you are marketing your product in the right way.

A video advert for a 22 year old women interested in puppy accessories will differ to that of a 45 year old man interested in scuba diving gear.

The chances are that your target niche will be competitive…

Dropshipping is like that, usually there will be lots of entrepreneurs like yourself trying to make the sale.

When it comes to choosing a niche or products you need to take the time to do the research.

You need to be wary of the levels of competition.

If you are only just starting out you don’t want to be competing with the most seasoned drop shippers out there…

If you are passionate about a niche, this can really help!

Build a business around things and people you are passionate about

Holding an interest in your niche isn’t essential but it can make the marketing process a little bit easier.

You’ll be able to easily put yourself in the customers shoes, what sort of advert would catch your attention

If you are passionate about a niche / product it also feels less like work…

With dropshipping having a passion in the product IS NOT essential, as long as you have a passion for the process.

Don’t overlook trendy and profitable niches because you only have your passion in mind.

When deciding on a niche look for reasonable demand with competitors that you can mimic.

Keyword Research

Keyword Research

Keyword research is important for a number of reasons.

Targeting the right keywords enables you to find the right customers.

I’m sure you’ve heard of Search engine optimization (SEO)…

SEO refers to the practice of fine tuning your webstore so your customers are able to find you through the search engines.

Some dropshippers rely on paid advertising for traffic generation.

By using something like Google adwords you can bid for certain keywords which allow your site to show up at the top of the page.

First you will need to identify your target keywords…

Competitor analysis is a great way to do it.

Ask yourself, which keywords seem to be working for your competitors?

Google Keyword Planner is one of the best tools for keyword research.

A lot of people rely on Facebook / Instagram ads when it comes to driving traffic.

When doing this you don’t need to input any specific keywords, these types of ads work in a different way.

Qualifying Your Niche or Product

Before you dive in, it’s good practice to make sure a niche is both profitable and in demand.

Another useful tool to have in your drop shipping arsenal is google trends.

This tool can help you look at the demand patterns.

Why is this useful?

Well, for example you wouldn’t want to start selling a product with peak summer demand… in the middle of winter.

Google trends helps you see the bigger picture.

Let’s look at fidget spinners for example.

drop shipping google trends

Peak demand for this product was back in may 2017…

If you are looking for a trending product this would be an example of one to avoid…

Use google trends to make sure you are getting in at the right time.

It’s also essential for you to determine that a niche/product is going to be profitable.

You can learn more about a niche and its profitability by looking at the following:

  • Search volume of related keywords
  • Google Trends Reports
  • Online activity – check popular blogs and websites
  • Conversations on message boards and online forums
  • Social media hubs
  • Whether people are advertising the product on Google or not

The more activity – the more potential buyers…

To determine the profit you’ll make on each product you’ll see to work out the following:

  • How much you’ll have to pay a supplier for each product
  • Your associated costs of shipping and fees
  • The cost of customer acquisition

You will have to ensure that your product price accounts for the above costs and of course your profit!

Creating a Shopify Store for Dropshipping – The Process

If you want to get started… this is what you’ll need to do.

Create a Shopify Account and Name your Store

Save money where you can and start with the 14-day trial account.

Follow the steps Shopify lead you through.

You’ll need to provide the following information:

  • Name
  • Email Address
  • Physical Address
  • Account Passsword
  • The Name Of Your Store

This article takes you through the process step by step.

Shopify will also ask a number of questions about your ecommerce experiences (if any)

Once complete, move onto the next step.

Install Oberlo (Or Other Preferred Dropshipping Solution)

In this guide, we’ll use Oberlo as an example.

The reason for this is because it’s one of the most popular solutions out there.

Once your Shopify store is up and running, you’ll have to install Oberlo.

Oberlo refers to Shopify’s integrated dropshipping supplier network, it’s easy to install and easy to use.

On the Find Products tab on the Add products page, you will be redirected to the Oberlo startup page.

Remember that you can add Oberlo dropshipping to an existing Shopify Store from the Shopify Apps section.

Once installed Oberlo will appear on your dropshipping popup.

When ready you can start looking for the products you’d like to sell in your store.

Finding The Best Products For Your Drop Shipping Store

Drop Shipping Store

Once Oberlo is set up, the next step is product discovery.

The Oberlo interface is intuitive, you can look for specific products or search for a broad range with a few clicks.

Take your time when looking for products, use relevant keywords and think outside the box.

You can also use filters.

The filters include:

  • Verified Supplier options
  • ePackets
  • US-based warehouse
  • Prices
  • Warehouse location
  • Order count
  • Shipping method

Carefully read through the Oberlo product description before you go ahead and import them into your store.

Import Your Oberlo Products to the Dropshipping Store

Ok, it feels like we are getting somewhere now.

Note that after your search with Oberlo, your assortment of products should be imported to your Shopify store – use the Add to Import List.

These items always sit on the Import List until you move them to Shopify.

The reason for this is that the ‘Stay’ in the import list allows you to edit the product titles and descriptions before pulling them in.

This allows you to review and edit your product choices before going ahead.

During editing, you also get to add keyword tags for site search and search engine optimization (SEO).

Product Categorization

Once you move the products from Oberlo to Shopify, go to the settings tab on your Shopify Store’s dashboard.

Here, you can set up Product collections to organize your product listings.

Select Create Collections under the Collections tab…

Insert one of the product’s images into the Collection Image box and away you go.

To add items to the new collection based on specified criteria, all you need to do is set conditions and start adding.

Creating collections of relevant products is good for the customer experience.

If you only have one or two products you could instead create a featured collection and set this to display on the homepage.

Ok let’s finish by capping off the store set up process.

Shopify Store Setup

Ok so once you’ve filled in all of the relevant details it’s time to customize the look of your store.

This will need to be done before you launch.

Here is a brief checklist you can use to set up your store:

  • Choose the store’s theme
  • Create informational pages for your customers; for example, shipping details, returns/refunds, and about us.
  • Create menus to help with store navigation (this involves menu organization).
  • Enter your payment, shipping, and your tax information
  • Create/ Connect your store domain name
  • Go out there and find your customers

Oberlo works really well for dropshipping physical products…

There are plently of other dropshipping networks you could make use of too, Oberlo is only one example.

If you are interested in dropshipping on Shopify there is a good chance you may be thinking about a slightly different business model…

The Print On Demand Drop-Shipping Business Model

Now i’ll keep this section brief but it’s only right that i mention it.

There is an emerging wave or Entrepreneurs that are moving into the print on demand sector.

I actually do a little bit of this myself.

I was first introduced to the business model when i stumbled across Merch By Amazon.

It’s a simple platform, you upload designs onto a selection of merchandise, list it on Amazon and away you go.

Let’s explain the process using a T-Shirt as the example…

  1. Customers buys T-shirt with your design
  2. Amazon prints the T-shirt and posts it to the customer
  3. You then make a royalty for every sale you make

I LOVE this business model.

It is so passive…

All you have to do is create designs that people want!

List it on Amazon and they’ll take care of the rest.

You can actually use Amazon and Shopify to great effect here (Here’s a guide on the integration).

A lot of print on demand dropshippers will create a Shopify store and then list their products on their chosen Amazon marketplace.

In the above example Amazon took care of the T-shirt printing and distribution, but you have a lot of other options here…

Print on demand entrepreneurs also use Shopify and other print on demand companies to print and post out their products.

You have a lot of options with your shopify store.

Here are a few useful print on demand companies to make a note of:

  • Printful
  • Printify
  • TeeLaunch
  • AllOverPrint (UK Based)
  • Custom Cat

I could go on and on….

It’s really easy, all you need to do is create a shopify store and integrate with your chosen print on demand partner.

This makes it very easy for you to build a big print on demand business from your bedroom…

You don’t need any of your own facilities to make the products, with this model you let someone else take care of that!

So to summarize besides Oberlo and their competitors you could use the following types of dropshippers:

  • Print on demand
  • Specialty
  • Aggregate

The options are endless, it’s up to you to go out there and get it.

I really hope you’ve found this useful!

More from me soon,


nick ebusiness boss

eBusiness Boss

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