What Is Dropshipping?
Dropshipping is a low-cost way to own an online business. You don't need to purchase products or house inventory. Instead, you act like a liaison between a paying customer and a third-party supplier. First, the customer orders an item from your store. Then your supplier takes care of all the backend legwork, like packaging, shipping, order fulfillment, and delivery.
What Is A Dropshipper?
A dropshipper is a proxy between a paying customer and a third-party wholesale supplier. Drop shipping is a three-way exchange between the consumer, your website, and your dropshipping supplier. For example, the customer places an order on your site. Then your wholesaler takes care of the packaging, shipping, and delivery. Dropshippers pay their suppliers after receiving payment from the customer. This covers the cost of the product cost plus its markup.
What Is Shopify?
Shopify is a 100% customizable cloud-based software. It's also a popular platform for dropshippers who want to build a drop shipping store. A subscription-based model, Shopify has over 1600 themes and templates and 7000 apps (both free and paid plug-ins) to help dropshippers grow their marketing capacity. Merchants can then sell their products on social media, third-party marketplaces, websites, and blogs.
What Is Shopify Dropshipping?
Shopify dropshipping is an easy way to create a dropshipping business and sell products without owning inventory. Shopify is a trusted and well-established, user-friendly platform. According to BuiltWith, over 2,297 million websites are using Shopify. In addition, Shopify integrates with most drop shipping suppliers and allows dropshippers to sell on multiple online channels.
But because it's so popular, you can face cut-throat competition. According to Backlinko, over 1.75 million merchants sell on Shopify. The secret to Shopify drop shipping is to do the research. Find products with a WOW factor. Or items that solve a problem or can make a person's life better.
Then, keep an eye on the competition. Where are they lacking? How can you do better? What unique marketing angle can you monetize? How can you make your store stand out? Shopify dropshippers get the tools and software they need to succeed with the platform. But be ready to do the hard work to drive online traffic to your Shopify store.
How Do I Become A Dropshipper On Shopify?
1. Pick a profitable dropshipping niche:
Target profitable & untapped niches that aren't saturated and are forever green. For example, kids, tech, jewelry, and accessories. Then use tools like Google Trend to access things like:
Use third-party tools like ahrefs or SEMRush to check the monthly search volume. (Aim for 5,000-10,000 monthly searches). Then, have a minimum of 5 products under your theme. (All of them need 5-10 thousand monthly searches). The best dropshipping niches have products that aren't easy to find. Or offer things not listed on the high street, like Amazon. But items that still have high profit margins and a high AOV (average order value) to ensure as a dropshipper, you make a weekly income.
2. Find winning products to sell
Research and leverage the best dropshipping product research tool like AdSpy, Power AdSpy, or EcomHunt to find winning dropshipped products. First, choose lightweight things to take advantage of low shipping costs. Then find products that have good profit margins. For example, can you sell it for 3X multiple? Other things to consider:
- Can you create content and high-quality images or videos around it?
- Is this a product that is in demand?
- Does it have a WOW factor or solve a problem?
- Are people actually buying it?
Scroll through sites like TikTok and Amazon Finds to see what's selling right now. Or use a spy tool like Peeksta for about $20/month to see what products other dropshippers are doing well with and where to find suppliers for these products. Another option is to repurpose your Facebook hot sellers with UGC designed for the TikTok platform.
3. Determine your ideal target audience:
Knowing who your target market is might be one of the most critical aspects of dropshipping. The key is to match your message to the right audience. Not only is it a cost-effective way to get your product in front of the right people. But it's how you attract new customers and make more sales.
But get it wrong, and you might end up going around in circles and will fail with the business model. The idea is to define your target market. Learn as much as you can about their likes and interests. For example, is there an underserviced group? Can you find items that have mass appeal? Can they still cater to a specific customer avatar? Then craft a clear message and list why they need to buy it now.
4. Locate a reliable supplier:
Your dropshipping supplier is a pivotal part of your dropshipping business. You can find suppliers by doing a Google search by typing product + supplier (or wholesaler) into the search bar. Or discover retailers on directory sites like SaleHoo or Inventory Source.
Another option is to connect with US dropshipping suppliers like CJ Dropshipping, SourceInTheBox, and ZenDrop. But in 2024, wholesalers from China with 30-day shipping don't work anymore. Now it's about finding a supplier who can deliver on things like:
As a dropshipper, you don't want to run out of inventory or deal with shipping delays. Having multiple suppliers is a good way to circumvent any issues. First, take the time to vet each one. Then order a product to experience the unboxing like your customer. Look at how they package the item. What's the quality of the product? How long did it take to arrive? Remember, it's all about the customer journey and providing the best shopping experience possible.
5. Market your drop shipping store:
The goal is to get a ton of eyeballs on your offer. One of the top ways to drive traffic is with content. Consider that content is a massive differentiator between dropshippers who just list products and dropshippers who put themselves in the target customer's shoes and imagine what they need to make a purchasing decision. According to SEMRush, content can increase engagement rate by 53%. Use tools like Keywords Everywhere and Google Trends to see what people are searching for online.
Then create content that speaks to the needs of your ideal consumers. Post where they hang out. For example, What kind of content do they engage with the most? Where do they spend their time online? Next, feature your product in use with a clear call to action. Send them to your 'Buy Now page.' And link it to your product page using in-app shopping through Shopify settings. Or consider leveraging TikTok dropshipping and take advantage of another marketing channel. One that offers a ton of engagement and is known as the top spending app for consumers in 2024.
Is It Profitable To Dropship On Shopify?
Yes, it's profitable to dropship on Shopify. According to research by eMarketer and Statista, online retail sales will reach $6.51 trillion by 2023. But the Shopify platform has an impressive track record when it comes to loyal customers and repeat buyers. Shopify reports that over 50% of stores see a buyer purchase two or more times from their store. And over 62 million buyers have purchased from the same store twice.
Of course, profitability lies in the products your sell, price point, and marketing strategies. But the average Shopify dropshipper earns profit margins of 10%-30%, and it's possible to make $1000-$1500/month. In fact, some of the top dropshippers make over six figures. But some dropshippers make nothing. So to improve your dropshipping success rate, you need to hustle.
The key to making money with this ecommerce business model is to jump on trends before they become saturated. Then develop unique marketing angles that tap into consumer psychology and invoke emotional purchases. Or create videos that get people to stop their mindless scrolling and pay attention to your offer.
According to HubSpot, you have 15 seconds to grab someone's attention. So you need a compelling hook and reels with shock value that has virality potential. Focus on the benefits of your product, not the features. Then develop effective ways to advertise your dropshipping store, like content marketing, influencer marketing, or paid ads on Facebook.
7 Insider Hacks To Increase Your Dropshipping Sales In 2024
Turn your Shopify dropshipping business into a cash-converting machine with a website focusing on the customer experience. It takes 0.05 seconds for a consumer to form a first impression of your website. For example, Do they like it? Do they trust it? Will they shop from it?
The goal is to simplify the user experience and capture their attention. Design your store with a harmonious color scheme and cohesive brand. You want your drop shipping store to look like a legit business, so include the following:
Your website needs to be a mobile-friendly ecommerce platform. According to Business Insider, the number of sales from mobile is as high as 45% and will continue to rise. But if you optimize your site, you become a flywheel. Plus, when you have proof of concept, you can add products. Then you get out of the average crowd and into the top crowd. That's where you convert more people and make money with drop shipping.
Personalized customer experiences are the secret to becoming a successful Shopify dropshipper. According to Google, people are 40% more likely to spend more than they've planned if the shop is optimized for customer experience and is personalized.
Therefore, your gameplay needs to be about making your business stand out. What can you do to highlight your site to provide the best user experience possible? How can you get people to increase their order value? What can you offer to turn buyers into repeat customers? Consider things like:
Build your brand-customer relationship and foster connections with potential buyers to lower your cart abandonment rate or improve customer loyalty. Then take advantage of the wide range of Shopify dropshipping apps like Infinite Options or Product Personalizer. As a result, you'll make more sales and earn higher revenue with your online store.
Increase sales with loyalty programs, frequent buyer deals, or introduce a better product. (One that brings more value to your customer than what's currently in their cart). For example, offer purchase incentives, like products frequently bought together or quantity breaks. Average dropshippers see 1%-2% conversion rates on new Shopify sites. You can increase your conversion rates by having options like:
- Incentivized free shipping
- Special deals & limited-time offers
Another choice is to tap into buyer psychology. Then employ scarcity tactics to get people to take action. This concept lets potential customers know your dropship products are in high demand, so they need to act fast to avoid missing out.
For example, use a dropshipping app to show low stock levels. Or display countdown timers on your product pages. According to OptinMonster, the presence of the time alone create an 8.6% increase in conversions. As a result, you develop a sense of urgency or FOMO and can achieve more sales.
Paid ads are one of the best ways to get a quick win. But they come with a price tag, and costs are expected to increase by 11% in 2024. So the focus needs to be on your targeting. First, make sure you're reaching the right audience for what you're selling. Then, pick an audience of 5-80 million in size based on interests, behaviors, and demographics to get enough eyes on your ads.
Design your creative with high-quality images or videos and compelling ad copy, and clearly communicate the value of your product. Facebook and TikTok are popular paid ad options for drop shipping. However, they're also volatile marketing platforms and can be inconsistent but allow you to scale aggressively. The secret is to complement your volatile marketing platform with a more stable marketing platform like Google AdWords or Bing Ads. For example, Facebook ads are interruption marketing, so you're targeting a cold audience (people who aren't looking for what you're selling).
According to Hootsuite, Facebook's potential advertising reach is 2.08 billion people. But Facebook is a more challenging channel because Google is where the potential customer searches online when they're ready to buy. Therefore with Google Ads, you're in front of a warm audience. (People looking to buy your product now). According to HubSpot, every $1 invested in Google Ads makes $2 in revenue.
SEO (search engine optimization) is one of the best ways to generate organic traffic. According to BrightEdge, SEO drives 1,000%+ more traffic than organic social media. In addition, tools like Google Analytics and Google Keywords show you how to find long-tail keywords that you can rank for fast. Leverage SEO tactics like using keywords in your product descriptions, title, and descriptions. Adopt omnichannel marketing and get as much online exposure for your store as possible. For example, set up a YouTube channel. Then do a video product review highlighting the benefits and rank in the search engines for top keywords. Next, add a link to your drop shipping business to drive online traffic to your site.
Another option is to find viral products from TikTok using platforms like Amazon Finds, and TikTok Made Me Buy It or check out software like AdSpy and eComHunt. But be ready to make lots and lots of UGC content. Post day for 30 days or create a video with virality potential. Influencer Hub says TikTok pays around $0.02 and $0.04 for every 1,000 views. So a viral video with a million views will earn around $5. But viral videos are less about sales and more about brand awareness. So when the end game is to create a buzz around your product, viral videos are a chance to capitalize on a market without spending money on paid ads.
Email marketing is a chance to connect with a buyer on a more personal level and craft the story of their journey. According to data from HubSpot, email is nearly 40X more effective at acquiring new customers than social media. Email marketing also allows dropshippers to address cart abandonment, share limited-time offers, or encourage customers to sign up for member benefits.
For example, use CRM software like Salesforce, ActiveCampaign, or the Shopify Inbox app. Then you can automate processes and streamline your systems. Litmus's studies suggest that email marketing generates $36 for every dollar spent. But in 2024, email marketing needs to be part of your marketing strategy.
Social media marketing is a way to get free eyeballs on your dropshipped product. Kepios reports 4.76 billion social media users worldwide in January 2023. But the best way to win with social media is through content creation. For example, according to the top dropshipping stats,130 million users engage with shopping posts on social media.
Another option is to leverage influencer marketing that can generate high ROIs without investing in paid ads. Data from Tomson suggests that the average business generates $6.50 in revenue for each $1 invested in influencer marketing. Of course, you can also share your link on multiple channels like Facebook, Instagram, and YouTube. But find the right platform and be willing to test and retest.
Is Shopify Dropshipping Free?
Shopify dropshipping isn't free. But it is a cost-effective way to build a dropshipping ecommerce store and sell products online. The platform offers five payment options that include the following:
- Shopify Starter: $5 per month
- Basic: $29 per month and 2.9% + 30¢ per online transaction
- Shopify: $79 per month and 2.6% + 30¢ per transaction
- Advanced Shopify: $299 per month and 2.4% + 30¢ per transaction
- Shopify Plus: starts at $2,000 per month (includes hosting)
All plans offer online business builds. They also include selling ability on multiple channels, POS systems, and 24/7 customer service. Dropshippers pay monthly or can take advantage of the 25% discount if they pay yearly and cancel anytime with no minimum contract conditions. Pick the option that best aligns with your long-term goals. Of course, you can always upgrade or downgrade your existing plan on your Shopify account if necessary.
Benefits & Disadvantages Of Shopify Dropshipping
Pros
The most significant benefit of Shopify dropshipping is that the platform delivers built-in marketing tools and customized optimization software. So it can be used to also dropship on Facebook Marketplace.
Another benefit of Shopify dropshipping is that this ecommerce website builder is easy to start. Plus, the Shopify dashboard is interactive and doesn't require advanced technical skills. People interested in high ticket dropshipping may also benefit from Shopify's advanced features and integrations.
A benefit of the platform is that it supports over 100 payment options (including their own Shopify payments option), which is necessary for Shopify dropshippers who want to scale their Shopify dropshipping store. You can structure your store so that dropshipping is halal not haram and make money online.
Cons
A disadvantage and risk of dropshipping for a small business owner on Shopify are that the site doesn't offer marketing automation tools in its plans. But automation is crucial for dropshippers who want to scale their online store. So if you want to scale, you'll need to find another provider or pay the Shopify app store monthly fee.
Another disadvantage for a dropship store owner is that they only offer seventeen free Shopify theme templates, and some of the best Shopify themes are expensive. So if you want to use premium themes, you'll pay a one-time fee between $180-$350.
A disadvantage of Shopify dropshipping is that the platform is not the most affordable option. For example, a web builder like WooCommerce is a free plug-in that's completely customizable.
How Does Local Lead Generation Compare To Shopify Dropshipping?
Comparing the local lead generation business model to a Shopify dropshipping business, there are distinct parallels and distinctions. Both models allow you to own a business without physical products. You're like an arbitrator between a supplier and a potential customer.
But dropshippers have no control over essential aspects of their business. With local lead generation, you're in full control over every part of your online business. You build and rank generic websites that get to the top of Google.
Unlike drop shipping, which relies on interruption marketing and paid ads, with lead gen, your websites are in front of an audience actively searching for your offer. Plus, you own the website, the tracking number, and the leads. Then you sell those leads to a small business owner for a profit. And local lead generation profit margins are 85%-90%, while drop shipping profits are 10%-30%.
