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Dropshipping is a great way for sellers to start ecommerce shops. They don’t need to make products, manage inventory, or ship the goods. Dropshipping allows anyone to get into ecommerce. Shopify, the largest ecommerce platform with over a million users, makes it easy to sell a wide range of products via dropshipping.
What does Shopify offer dropshippers exactly? It’s very user-friendly, and it works with many apps designed specifically for dropshipping. Plus, it has a variety of features that enable you to do much more than just sell products — you can also make payments, track shipments, engage in marketing, develop an abandoned-cart strategy and view analytics.
Shopify is expensive depending on how big and complex your online store is, as well the features that it needs. Shopify is a simple plan that costs $29 per month. However, you can get all the Shopify features for $299 per monthly.
Shopify dropshipping is something you might consider. Read on to learn more about Shopify’s pros and cons, how to set your store up, and which apps you can use to get inventory for your business.
Dropshipping: What does it mean?
Dropshipping is when the seller does not keep its products in stock. Instead, the retailer will send the customer’s order information and shipping information, along with the order details, to a third-party such as a manufacturer or wholesaler, who then ship the product to the customer. Although the retailer markets and curates products, they never actually handle any of the items that are sold.
For example, Meowingtons.com, a successful niche ecommerce site built on Shopify that specializes in all things cat, launched in 2014 exclusively selling products available via dropshipping. Below is a screenshot of the original website design and some of its products.
Meowingtons was a store that sold cat-centric products, including jewelry, when it first opened. While many of these items were purchased from AliExpress. Meowingtons sold them on its own website. For example, a customer who purchased a Meowingtons cat ring was shipped via AliExpress.
This online store for feline lovers was hugely popular, attracting thousands of people per day and hundreds of thousands of fans on social media. Meowingtons grew its product range as it was more popular. Today, the business is no longer dependent on dropshipping.
Let’s now look at how dropshipping works.
Dropshipping: The pros and cons
Dropshipping is a great option for your ecommerce store. However, there are also some drawbacks. Below, we’ll discuss both.
Dropshipping: The pros and cons
- You don’t need a lot of capital. Dropshipping has a number of advantages. You don’t need to invest in inventory. Once the product has been purchased, you pay the seller for it.
- It is easy to manage. It’s simple to launch and manage your online store. This also enables you to spend more time and resources on your store design and the marketing of your products.
- There are very few overhead costs. You don’t need to buy inventory upfront and you don’t have any other e-commerce expenses such as fulfillment or inventory storage. While you can technically start a dropshipping business at no cost, Paul Lee, owner of the six-figure ecommerce store HUSKYBEARD, suggests spending at least $500.
- There are many products you can sell. Dropshipping stores have a lot of products that you can add to their inventory. There are no upfront costs so your customers can choose from a variety of products.
- It is easy to expand. Dropshipping requires that your suppliers do most of the heavy lifting. This allows you to increase your inventory and expand your ecommerce store.
Dropshipping: The cons
- Low margins are common. Dropshipping is easy and inexpensive to set up and manage. This means that there’s plenty of competition in dropshipping. It’s not unusual for retailers and wholesalers to price products extremely low.
- There is no way to control inventory and supplier issues. It can be difficult to make sure items are always available when you don’t stock and manage your inventory. This is especially true if you work with suppliers who also supply products to other retailers. Dropship automation software can make it easier to integrate your suppliers’ inventory with Sellbrite, automatically syncing inventory.
- Shipping costs may be higher. When you source products from multiple suppliers, shipping costs can become complicated and pricier. If a customer orders four products from your store, each item may ship from a different source around the world, so you will be paying four shipping fees. You’ll probably have to pay the bulk of these shipping costs as the customer assumes that he/she is ordering from your store and not from four different suppliers.
- It can be difficult to provide customer service. Ecommerce is not without its faults. You’ll have to work with multiple suppliers and may make mistakes. There are many things that can go wrong with ecommerce. A product may be out of stock or the shipment may not arrive. Even if the error is not yours, you are responsible for correcting it and communicating with customers.
Dropshipping is by the numbers
Let’s now look at the numbers. Dropshipping shirts is one of the most sought-after items. While there are many factors that can impact the cost of manufacturing and shipping a shirt, such as shirt material and printing method, this overview is only one example of a dropshipping shirt scenario. It doesn’t consider all factors.
Let’s say you’ve decided to use Printful, a print-on-demand app that integrates with Shopify and allows you to print custom shirts and ship them directly to your customers. Your cost and profit would be reduced if you printed your design directly to garment on a triblend American Apparel TR408W shirt.Printful tank top pricing
Printful, unlike other Shopify apps that print-on-demand, does not require upfront fees like subscription fees. You will need to purchase inventory if you want your own shirts. For example, let’s say you placed a minimum order of these exact same tank tops and design from a T-shirt printing company like Terminus Tees. Screen printing with two colors is required. This minimum order must be placed within 48 hours.
You can also purchase inventory upfront, which means that you are spending money on a product before knowing if it will sell. It may be worth testing how the item sells with a print-on demand company before you invest in your own inventory.
Dropshipping vs. buying your inventory is a decision that must be made. Another consideration is the extra time it takes to print or make your own products. Printful, for example, allows you to quickly take your idea and sell it.
Dropshipping through Shopify means that all inventory is managed for you. Printful handles all inventory management, so you don’t need to worry about whether or not you have tank tops in stock.
The main benefit of DIY over dropshipping is the profit margins. If you look at the profit margins when printing the tank top shown above, versus purchasing the tank top via Terminus Tees, the difference in profits is $111 when you sell your inventory. The table below shows how this works.
As you can see the profit margins can be greater when inventory is purchased and shipped directly to customers.
Dropshipping on Shopify: How do I get started?
Are you ready to get started with Shopify? You’ll first need to create a Shopify store and get a Shopify Account.
Visit Shopify.com and click “Start free trial” on the homepage to begin setting up your account.
Next, you will be asked to enter your email address and password. Finally, your store name will be displayed. There are some things you should keep in mind when choosing a Shopify storename. While you want something unique that will stand out, it is important to keep it simple and easy for people to remember.
Once your account has been set up, you will be asked a few questions about yourself and your ecommerce experience.
After answering these questions, you can set up your dropshipping store. As shown below, click “Settings” at the lower left corner of your Shopify dashboard.
To receive payments, enter your bank information and business address.
After you have completed your payment information, go back to the settings dashboard. Here you can set up some other important parts of your store including shipping information and policies. You can also select a theme for your Shopify store.
To get your Shopify store ready to dropship, you will need to create a sales channel. Select “Sales channel” in the Settings dashboard. As illustrated below.
You’ll find a pop-up menu that allows you to choose from several sales channels. Scroll to the bottom and click “Visit Shopify App Store” if you want to use Shopify Dropshipping Apps for your store.
The next section will discuss some of the most popular Shopify dropshipping applications.
Add products to your shop
Dropshipping on Shopify can be made easy by using an app to get inventory. Let’s look at the top Shopify apps for dropshipping, and their pros and cons.
Oberlo is the most popular app for Shopify dropshipping. It was specifically designed for Shopify, so it seamlessly integrates with the platform. You can also add products to your store very easily. You can choose from a wide range of goods that have been sourced from AliExpress and Oberlo.
With Spocket, you can select products from thousands of suppliers located in both the United States and the European Union. These suppliers can deliver products faster and more reliably than suppliers located around the world. This allows you to offer your customers a great buying experience. Dropshipping products from other countries may be more expensive, but pricing is not necessarily a problem.
MXED is a unique Shopify app because it allows retailers to legally sell official pop-culture merchandise from popular franchises like Harry Potter, Marvel, Nintendo, Star Wars and Pokemon. These franchises are well-known and there is a huge market for them. This can make it a great niche for dropshipping stores.
There are thousands of products to choose from on Modalyst, including apparel, accessories and home goods, and you can easily add items to your Shopify dropshipping store with just one click. However, the shipping process isn’t entirely automated — you must purchase products from the seller on Modalyst when you’re notified of a sale.
KITE, which enables you to print your own designs or images on products, offers more than 250 custom products, including apparel, phone cases, and stickers. However, the company does not manage its own inventory. It partners with manufacturers to print orders and ship them, so customers’ shipping times can vary.
Shopify also offers many other dropshipping apps. To learn more, search the Shopify App Store.
Dropshipping with Shopify is right for me?
Shopify is a popular dropshipping platform because of its ease-of-use and availability of many apps to add inventory.
Start small to see if Shopify is right for you. Start by only working with a few suppliers and a small number of products to learn about dropshipping and Shopify. You can increase your business’s efficiency by working with more manufacturers and adding more products to your inventory.