How to Start a Dropshipping Business on Shopify

Contrary to popular belief, dropshipping isn’t actually a new concept. It’s new to the digital age, but the business model originated in the 60s when magazines and catalogs from stores showed up on your doorstep. People would place an order by indicating their selection on the mailing form and then send it in with their payment for the order to be fulfilled.

But what is a dropshipping business? Dropshipping allows businesses to reduce their expenses by not holding inventory. Instead, when an order is placed, the dropshipper sends the order to a third-party supplier to be fulfilled from their location. When using a site like Shopify, you can create your own dropshipping business allowing customers to shop from your business without supporting and creating your own shopping platform.

There are many benefits to running a dropshipping business, like low start-up expenses, inventory, and overhead costs. Dropshipping is a 16 billion dollar industry and is expected to increase by another 10 billion dollars by the end of this decade. Here’s how to start a dropshipping business on Shopify and get in on the action today.

Carve Out Your Own Corner

Ecommerce in the US has increased by 50% in the last two and a half years, and Amazon accounts for more than 40% of online shopping. The dropshipping market is a saturated swamp, and to get a slice of the cake, you’ll need to carve out your own corner of it.

The first step to creating lasting change is choosing products or a niche that will separate you from competitors. If you’re an avid fly-fisher, compile the best products you’ve used that other people would enjoy. Or maybe you specialize in acrylic painting and want eco-friendly materials to be more available.

Starting a dropshipping business can come from struggling to find the products you need and wanting to prevent that for others. And if someone already has an e-commerce platform similar to your idea, don’t panic. No one can run a business the exact same way. And, if someone’s already done it, it means that your idea is a good one! There is plenty of room for your business in the market.

Seek Reputable Suppliers

Conduct research in your chosen market and find if the products you’re looking for are even available. Shopify’s Aliexpress makes finding a supplier seamlessly easy and efficient. Aliexpress is based overseas and lists over 100 million products available for dropshipping. And it’s completely free.

Be sure to look for signs of legitimate suppliers like website security icons, accessible contact information, and dedicated staff. Common practices for suppliers to include when placing an order are:

  • A fee or small percentage so they make a profit
  • A minimum amount in your order so the effort is worth theirs

Shopify’s App Store holds a variety of suppliers like these print-on-demand vendors and other numerous categories for Shopifiers to find their vendors. Do your homework and connect with suppliers to see if they’re right for your dropshipping business.

Select Your Shipping Method

While considering your suppliers, make sure you understand shipping rates with various carriers and how this will eat into your bottom line. Three shipping methods to choose from include:

  • Exact shipping
  • Free shipping
  • Flat rate shipping

Your dropshipping business is responsible for the shipping rates from your supplier. Exact shipping is when you pay the exact amount it costs to move the product. Free shipping and flat rate shipping are actually the same things, but the former is disguised as a marketing tactic. Free shipping may include the shipping price in your overall product price. Consult other suppliers offering similar products and compare their pricing before giving in to the urge for negotiations.

Consider Your Supplier’s Location

For shipping prices, you’ll also need to consider what products you’re selling, where your suppliers are, and where you’re selling to. Research the supplier’s location and where their home base is located. Suppliers located in the middle of the country have an easier time branching out to the east or west coast rather than a supplier from Maine trucking down to California. This will also help limit your liabilities and any chances for disgruntled customers.

Name Your Business

Your dropshipping business is more than the middle man. It’s an experience. And you have to be an expert in the customer’s journey if you want to keep them coming back.

To start, choose a name for your Shopify platform. Remember your chosen market and consider the ideal client you’d like to serve. In a report published by Intuit in 2020, it’s projected that customers will control the relationship with businesses. Instead of pushing products onto customers, customers search out what they want and find businesses that meet their needs.

Your dropshipping business name should be clear about your message and the value you provide. Be creative and, most of all, relatable to your ideal client.

Set Up Shop

Starting a dropshipping business on Shopify is entirely digital. This space is yours. Make it your own. Shopify makes it easy to connect with customers anywhere and everywhere with logo makers and dozens of themed templates to choose from. There are just a few steps to get started.

  1. Create your business name
  2. Create a logo
  3. Design your website
  4. Purchase your website’s domain name
  5. File a trademark

You can start a dropshipping business on eBay or Amazon, but creating a customizable website is more beneficial for customer experience. A website allows you to connect with shoppers while providing resources when you need them.

Branding

Consider color schemes, fonts, and blank spaces on your website. You don’t have to hire a graphic designer to set up shop; you just have to be true to your brand and the message you’re putting out there. Your dropshipping business is striving for a streamlined process. So just don’t get too crazy with any distracting colors or calligraphy.

Shopify offers name generators and web domain availability checkers to see if your e-commerce name is already taken. You can move forward with a brand logo and even secure a trademark if you’re good to go. This isn’t required, but it is good practice in case a branding dispute issue arises at a later date.

Dollah Dollah Bills Y’all

Setting up your financial accounts for your dropshipping business is one of the most important steps otherwise, you won’t know much profit you’re making. Establishing proper bookkeeping is your safest bet to see a profit and save yourself the headache of rushing finances during tax season.

Resources like A2x sync your Shopify account into programs like Quickbooks to simplify your bookkeeping.

Shopify payments work in various ways depending on the level of Shopify you’re working with. Check out this article about getting paid and see if you need to open any accounts with online banks like PayPal. Just be aware of any additional fees and calculate that into your bookkeeping system.

Be Visible and Giving

If the phrase “marketing strategies” makes you want to run for the hills, just think of it as an action plan to reach your clients. Your master plan needs to align with your brand. For example, if you cater to competitive swimmers with difficulty hearing, it’s probably not a good idea to market yourself via video. It is, however, a good idea to gain traction on TikTok and Reels if you’re looking to sell hoodies with pop-culture references.

Congregate where your ideal client is; social media, email newsletters, and blogs are all viable options to market yourself. And of course, don’t forget about good old-fashioned face-to-face interactions. When possible, meet your clients; showcase your brand at local events, travel to tradeshows, and other events to share your brand and the goods or services you sell. You want to create connections that your ideal client can refer back to when they are ready to make a purchase.

You may also want to think about offering something to entice your ideal client to make a purchase. This could include a free gift with a purchase over $75 or a free iPhone background when someone signs up for your text messages. Be willing to give to receive. Giving something freely will make your ideal client eager to make another purchase, and ideally, they will tell their friends and family about your store.

Final Thoughts

The key to starting a dropshipping business on Shopify is consistency. The more you show up for your ideal client, the higher your sales will soar.

Don’t overthink about getting started; just start. Visualize your ideal client and find suppliers who can deliver on your vision. Toss around some numbers and get serious about any expenditures you may have to make your business a reality.

Then let your inner creative wreak havoc by drumming up a name, designing a website, and leaving your mark on the market. Provide a friendly, memorable customer experience through Shopify’s many resources, and continue to share the wealth by giving back to your customers. Your dropshipping business on Shopify is just a dream away.

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