How to Make Money with Dropshipping on Shopify

Is dropshipping really profitable?

Yes, dropshipping can be a profitable business model for merchants because you are not responsible for shipping or manufacturing. It’s a low-risk business model that doesn’t incur huge costs like a wholesaler would normally have and you can earn a good profit margin with the right suppliers.

How much can you make as a dropshipper?

There are many dropshippers who make up to $100,000 per year with a successful dropshipping store. So, if your idea of being a successful dropshipper is to make $100,000 per year, you’ll need to choose the right suppliers and build a brand. 

How hard is it to start a dropshipping business?

Starting a dropshipping business can be highly competitive. Because you can start a dropshipping business for free, you may face a lot of companies who are selling a specific product at similar prices. 

The Ideal Situation

I’d say the perfect scenario is that you should launch ten products at a time, find one winning product, scale it a little, and then use the money you’re going to make out of the product to invest in a product researcher who’s going to replicate the procedure for you. You can retain your momentum in this way and concentrate on systematizing your company.

When to Expect Your First Sale

Let’s get to it directly.

When it comes to our big question, there’s no right or wrong answer — you can get your first sale on the first product you sell, or even after your 50 products. It just depends on what sorts of goods you market, how they can hit your target demographic, and whether they can fix people’s modern-day challenges within a finger’s snap. The outcomes are only going to change for everyone at the end of the day.

Also Read   How to Make Money by Fashion & Apparel Dropshipping?

Another thing I want to find out is that you want very quick goods to be tested. About what? You have costs that are persistent and will still be there, regardless of how many you earn from your shop, steadily chewing your budget away. And if you test a few items a day without taking these ongoing costs into account, you can deplete your budget even more quickly than if you test products very quickly. This is to do the above and find a product that can gain momentum quickly and continue to sell in your shop within the first few days.

I feel like this is where most dropshippers fall out of the game—they run out of money, time and resources, and tend to accept that this business model is not as lucrative as it is thought to be.

Aggressively test your goods, and there will still be living costs at the end of the day, and the budget WILL go down.

Now, I want to point out that just because you’ve already made your first sell, that doesn’t mean you’re going to go racing and making loads of money because when you start launching a few more ad packs, that particular product might not be lucrative.

Also Read   How Much Money Can You Make Dropshipping on Shopify?

Video

5. Develop a Niche Product Market It Well

Most people ask, “can you make money on Shopify?”

Most people ask, “can you make money on Shopify?” as a separate question, but let me tell you, it’s not just about the platform you sell your products on.

Of course, it comes with advantages, but you need to know your niche and how to market your product nevertheless.

You can develop a unique niche product that targets a specific audience. This will ensure that you know who your customers are and how to address them. A specific target audience is easier to create marketing rather than a broad and diverse group.

Checklist Before Launching Your Shopify Store

Setting up a store with Shopify is indeed very effortless, but there are other things to consider in order not to face ongoing problems long term. Here’s a list of the essentials:

Shopify Apps: The third-party apps you install on your Shopify store through the App store. You can find various apps designed to assist you in your e-commerce efforts at every customer journey stage.

21 Best Shopify Apps To Increase Sales & Conversion (Free and Paid Apps)

Shopify Theme: The theme you select for your store will affect the way search engines see your site as well as the customer experience. A poor design can result in negative UX.

Support Your Store with Email Marketing: Email marketing is an excellent opportunity to return your abandoning customers, let your customers know about the sales and new product launches, etc. Using popup signup forms can help to collect the email addresses of users. Popup

Mobile: Most users browse websites on mobile. You need to make sure your Shopify store is mobile-friendly. Other ways you would be leaving a lot of money on the table.

Where to find a Shopify dropshipping business for sale

If you don’t want to create a dropshipping business from scratch, you can buy an existing dropshipping business from Shopify’s Exchange website. Exchange is essentially a marketplace where entrepreneurs offer their ecommerce businesses for sale to interested buyers.

Through Exchange, you can see crucial details like traffic and revenue data for any potential dropshipping business. Once you’re satisfied with the information, you can contact the seller directly within the listing using the messaging system available to Exchange visitors. With over 9,000 ecommerce stores for sale, you are likely to find something that suits your fancy.

Andreas Koenig and Alexander Pecka 

Andreas Koenig and Alexander Pecka started their dropshipping business with great ambitions. They wanted to bring in a turnover of $1000 per day. In the first year, they made absolutely no money. But, they didn’t stop trying. Eventually, they landed in the pet industry and became successful. They started making $500000 per month in 2019.

Their success tells you the importance of patience and finding your niche. Both are equally important. They choose the pet industry because of the emotional connection people have with their pets. Another important thing is the power of social media. Their earlier business endeavors failed because they couldn’t utilize social media for advertising and scaling up their business.

Now, their pet business is making over $10 million per year. They have around 50 people on their team who are working towards making their business grow even more. Thus, they have become one of the most successful Shopify store owners.

What is Shopify?

Shopify, launched in 2004, is an online platform that hosts digital eCommerce stores. It helps merchants (including dropshippers) create custom stores with themes and interfaces that appeal to customers.

It also allows you to upload product images and descriptions, keep track of inventory, and automate the process with plugins like Oberlo.

You also don’t have to facilitate payments with Shopify because they have a payment processing system (including point-of-sale), inventory management, online ordering, and fulfillment features.

Do You Need a Business License for Dropshipping?

You need a business license to start dropshipping because here’s the thing…

Dropshipping is not a business you can succeed at if you’re not serious. It requires a lot of work and commitment. You’re accountable to your customers, and you’re accountable to your budget.

Also, advertising is costly and NOT something to mess with unless you’re willing to learn everything you need to know about it.

Therefore… if you’re not serious enough to run your dropshipping business like an actual business (and register it as an business), there’s a good chance you will fail. I don’t say that to discourage you, I only say it because it’s not the type of business to simply “try out” and expect to succeed. 

There are surely some lucky success stories but they are rare.

There will be significant challenges and setbacks that will stop most “tire kickers” in their tracks because they’re unwilling to see it through.  

Also, from a practical perspective, many suppliers will expect your business to be registered legally before working with you. As a seller, you represent their product and their company.

You’ll also have taxes to deal with and liability insurance. And there are things like a Paypal business account that don’t necessarily require a business license but help you keep your personal life and business life separate.

At the end of the day, if dropshipping is worth doing, it’s worth doing right. Just a thought 😉

What Are The Differences Between Shopify Plans?

Just like so many other technology platforms, Shopify also offers a tiered package suite with different price points and functionality. Here are all the Shopify plans and what should you expect from each.

1. Shopify Lite – This is not a proper eCommerce store like it may sound, but a point-of-sale and a Buy button generator to add selling functionality to some other website or blog page. You can manage your invoices, reports, customer profiles, orders, products, discounts, and a few other basic eCommerce operations.

2. Basic Shopify – Unlike Shopify Lite you get a full online store with unlimited products, multiple sales channels, discount codes, a website builder, free SSL, abandoned cart recovery, automated email sequences and gift cards.

3. Shopify – In addition to  Basic Shopify features, you get more professional reports, discounted credit card rates, better shipping discounts, and international pricing and domains.

4. Shopify Advanced – In addition to the Shopify plan, you will have an advanced report builder, third-party shipping calculations, improved shipping and credit card rates, and individual product pricing for cross-border eCommerce.

5. Shopify Plus – In addition to Shopify Advanced, you have checkout customization capability, improved product pages with built-in media, localized shopping experiences, multi-domain feature, advanced shipping rates and discounts, and many more customization tools. Last but not least, Shopify supports you with a dedicated merchant success manager to help you grow your business and optimize your operations.

In the following table, you can see the comparison between prices right below.

How to set up shipping on Shopify for dropshipping

In general, you can decide on two approaches to shipping:

  • Add a shipping fee that customers will have to pay.
  • Offer free shipping with the fee included in the price.

This can be completely independent of your supplier. They can, for example, charge you for shipping while you include this fee in the product price already.

To set up shipping, first of all, go to Settings -> Locations -> Add location. Specify where an order will be shipped from. Since you won’t be generating shipping labels, just the warehouse city or province should be sufficient. Save when finished.

Next, in Settings to go to Shipping and delivery. If you’ll be using the same shipping rates for all orders, you may set them in General Shipping Rates field. There, click on Manage rates.

If you need a custom setup (for example, some products ship from China while the others from Spain), click on Create new profile and set up one for each location.

Here, specify your rates, the countries you ship t

Here, specify your rates, the countries you ship to, select the products that this should apply to, and save.

eBay and Amazon Dropshipping: Is It Allowed?

Many beginners think that they can’t do dropshipping from Amazon and eBay but that’s not true. Although dropshipping using these platforms might be hard due to certain platform restrictions, it’s still possible.

eBay for example, doesn’t allow products from China and users need to be residing within America. Amazon on the other hand demands that deliveries can’t take more than a week. These two are the main restrictions why most dropshippers prefer not to use these platforms. Find a solution for these and you can easily dropship from eBay and Amazon.

Dropshipping vs Affiliate Marketing: Which One Is More Profitable?

In this section we will compare dropshipping with affiliate marketing as both business models are quite profitable and effective. Since the affiliate marketing model is based on commissions on every product sold, we’ll assume that the commission percentage is 5% and we want to make $100,000.

Based on the calculations above, you’ll have to make $1000 per month or $340 per day, keeping in mind that you will get $5 commission on sale of $100. In order to earn at the same pace as dropshipping, your customers should buy products worth $7000 per day, if you want to earn $340 per day.

These calculations clearly show that dropshipping is more profitable compared to affiliate marketing. But the affiliate marketing vs dropshipping profitability still remains an ongoing debate. However, there are several other factors as well, one of the most prominent ones being that dropshipping requires a lot more setting up and preparation compared to earning as an affiliate. Moreover, it’s important to note that higher earnings come with higher risks.

Joe Warnimont

Joe Warnimont is a Chicago-based writer who focuses on eCommerce tools, WordPress, and social media. When not fishing or practicing yoga, he’s collecting stamps at national parks (even though that’s mainly for children). Check out Joe’s portfolio to contact him and view past work.

Dropshipping with Shopify – how does it work?

In many ways, dropshipping on Shopify works in the same way as regular sales on the platform. The difference, of course, is on the fulfillment level, where an order is taken care of by the supplier. But let’s start from the beginning:

  • Once you’ve done the research and chosen the products you want to sell, you add them to your store manually by inserting a name, price, description and photos. You could also upload a .csv file, if the your product list is larger, or use a dedicated app.
  • Each time one of your customers places an order, you need to inform the supplier know as soon as possible. They might be able to ship the product that same day. You can either enter the order manually on the supplier’s website or, if you use a dropshipping app, it will be automatically done for you. More often than not, all you’ll have to do is confirm an order or choose the desired shipping method.
  • Once the seller ships the order, you add its tracking number to the corresponding Shopify order. You could also have it pulled automatically from AliExpress or another similar platform. A customer then receives a notification from your store and can track their order as it travels to its destination.

Dropshipping business on Shopify is competitive as Shopify is one of the leading e-commerce platforms in the world. So, to get success in this you must come up with new and innovative ideas to grow your business. That’s what top dropshipper do to stay ahead.

Now, we’ll talk about some of these successful Shopify store owners. Their story will give you some much important insight into this business model.

Next Steps

There are many ways to make money with Shopify, even if you aren’t running a traditional eCommerce store. The most critical first step is to outline your concrete goals and what problems you plan to solve for other people. Shopify is an incredible platform and excellent toolset, but it’s not magic or a silver bullet. Decide what you want and can accomplish and go from there.

Note – technically, you can also make money with Shopify as an investor. They are a publicly-traded company (SHOP) that has received *a lot* of attention from the financial press. However, as of 2021, they do not pay (or plan to pay) dividends. They also are not returning earnings via buybacks. Shopify stock returns have been above expectations so far but are based exclusively on expectations for future growth. I wanted to keep this post limited to the use of Shopify as a platform.

Ask Family and Friends

Never underestimate the intensity of word-to-mouth marketing. For your online shop, your friends and family should be the first individuals you should approach. WhatsApp, or some other social networking channel you use, all you have to do is email it to them. Tell them to buy from you if they want to buy something.

To rise the odds of making a sale, pair this with tip# 6. Even if your friends and family are not interested in purchasing from your shop, they can post your links/products on their social media feeds and ask their contacts for more sharing.

This is a perfect way to put your name out there and potentially pull in a few sales.

Why consider dropshipping on Shopify?

Dropshipping is the perfect business model for entrepreneurs looking to set up their own business with little upfront investment, and Shopify is the simplest platform you can use to create and run your store.

When you dropship on Shopify, you’ll never need to worry about excess inventory, as you’ll only ever order the necessary amount of products to meet the demand from your customers. This system is unlike a typical ecommerce business, which involves either manufacturing products or purchasing products from a wholesaler in bulk.

If you’re planning to use Shopify with DSers, you’ll be able to control your inventory with just a few clicks—another reason why Shopify dropshipping is so simple. 

How to Make Money Dropshipping: The Pros and Cons of Dropshipping

The pros and cons of dropshipping are in fact different than the elements of a good and bad dropshipping store. The pros and cons detail the benefits and downsides of the fulfillment model for you as a vendor. It’s not difficult to learn how to make money dropshipping. The key is to understand the pros and cons and prepare for them.

Pros 👍

  • Dropshipping allows for greater flexibility when running your business. It cuts out many elements like shipping, packaging, and storage. Therefore, you can spend time and money on other aspects of your business like research and marketing.
  • There are loads of products to choose from when dropshipping. If you go to Amazon, every one of those products can be dropshipped.
  • The startup costs are low, seeing as how you only have to pay for a website, advertising, and to partner with a dropshipping supplier.
  • The risks are much lower, seeing as how you can pivot to a new product at any time, you’re not investing thousands of dollars in inventory, and there’s no need to sign any contracts with suppliers.
  • The products cost less for you, since there’s no need for storage and delivery.
  • You often receive better shipping rates since the suppliers tend to land great contracts with companies like UPS and FedEx.
  • The logistics are incredibly easy to handle. You link your website to the order management platform of your supplier. After that, they handle everything from packaging to shipping.
  • Dropshipping gives you a chance to focus much of your time on quality customer care, since it’s definitely needed in the dropshipping business.
  • Dropshipping is allowed on other platforms like eBay and Amazon, expanding your market reach to other spots on the internet.
Go to top

Cons 👎

  • It’s tough to build a brand. Your logo probably isn’t getting placed on the boxes. Chances are you have no control over the marketing content being placed in the box. In short, the credit for your work is going to someone else most of the time. It’s possible you could find a dropshipper who puts a piece of paper in each box for you.
  • You may encounter bad suppliers. Whether they’re doing something illegal or they’re bad at hitting deadlines, you really have to do your research when looking at suppliers.
  • You have virtually no control over the products and supply chain. Would you like to speed up deliveries? Would you like to check on product quality? Would you like to make sure products are boxed up properly? You usually have no control over this with dropshipping.
  • Dropshipping is competitive because you’re competing with non-dropshippers as well. Low overhead is nice, but that means that everyone is trying out dropshipping. Not only that, but the big retailers are still there, selling similar items for cheaper, with better brand recognition, faster shipping, and incredible return policies.
  • The profit margins are insanely low. Again, the low overhead is a great reason to get into dropshipping. A broke college student has the means to start a dropshipping business. However, once you sell some items, you may cringe at how little you receive. Because the suppliers are handling most of the logistics, you only get a small cut of the pie. In addition, you have to factor in per-unit costs for ads, marketing, and site management.

We all want to learn how to make money dropshipping. Just because there are downsides doesn’t mean you can’t do it. The best business people take these cons and use them to their advantage or at least prepare for them.

Go to top

Dropship to pick up profits

You’re not alone in wondering how to make money dropshipping or asking “is dropshipping worth it”. Now that you’ve read this article (you did read it all, right?) you have the answers to those questions and many more.

With the knowledge you now have, are you ready to start optimizing your dropshipping profits? The e-commerce train isn’t slowing down any time soon, so don’t wait too long to get your business up to speed!

Disclaimer: The information contained in this article is provided for informational purposes only, should not be construed as legal advice on any subject matter and should not be relied upon as such. The author accepts no responsibility for any consequences whatsoever arising from the use of such information.

Related Posts

  • How to Make Money on Shopify in 2021? 4 Excellent Ways If you’re wondering how to make money on Shopify in 2021, then this guide will…

  • Dropshipping Guide: What is Dropshipping & How Does it Work? Dropshipping is an e-commerce model that you can start with very low costs and with…

  • 5 Factors to Consider before Applying for a Business Loan You know that you want to grow your business. You’ve decided that you need to…

  • 5 Things That Drain Your Shopify Profits (And How To Stop ‘Em!) Managing and maximizing your Shopify store’s profits requires a holistic approach. Discover the 5 things…

  • Mistakes to Avoid When Calculating Profit for Your Shopify Store in 2021 Do you make these mistakes when you calculate profit for your Shopify store? Find out…

Tags