How to Start Shopify Dropshipping: The Full Guide
Dropshipping products using the Shopify platform is one of the most popular business models among new entrepreneurs. There are plenty of success stories from new sellers that have been able to make money by selling goods acquired from a dropship supplier.
Table of contents
In this guide, we’ll go through everything beginners need to know for how to dropship on Shopify successfully in 2023.
What is Dropshipping?
What is Dropshipping?Dropshipping is an e-Commerce business model where you have a supplier deliver products directly to customers.
With dropshipping, you don’t pay for your products in advance. Instead, you partner with a supplier and simply list their products on your site. When a customer places an order, you send the information to the supplier and they deliver the products to the customer.
Steps to Start With Shopify Dropshipping
Now that you know what dropshipping is, here is a step by step tutorial for starting your Shopify dropshipping business:
1. Do Product Research
The first step is to determine what products to sell. For this, you’ll need to perform thorough product research. Researching products before you sell them is essential as it gives you a better understanding of the demand for a product and its profit potential.
So, what should you look for when researching dropshipping products? Not all successful products are the same. But, there are some common traits that make products easier to sell for a profit.
Not a Private Label Product
Private label products are made exclusively for other brands. Because they are custom items, you won’t be able to source them via a dropshipping supplier. As such, you want to avoid these items when doing product research.
Naturally, if you want to make money with your dropshipping business, you need to offer products that sell. The easiest way to assess a product’s demand is to check how many monthly sales it gets on popular marketplaces. If you plan to build a long-term business around a particular item, it is important that the product’s sales are consistent over time.
Shipping costs are based on an item’s size and weight. Because of this, larger products have higher delivery costs. These fees cut into the product’s profit margins so it’s generally recommended to stick with smaller items when looking for winning products. Specifically, it’s best to find products that are less than a foot and a half on each side and under 5 pounds in weight.
Number of Other Sellers
Checking how many sellers a product has can provide some valuable information. First, it will give you an idea of how competitive the niche is. If there is a high number of other sellers, you can expect more competition. When searching for dropshipping products, you want to look for items with between 2 and 20 sellers. Any higher and the product will likely be too competitive. One seller is often a sign that the product is a private label item.
Where to Find Product Ideas
There are a variety of ways to learn new ideas for dropshipping products. Below are some of the most common places to get started with product research.
Social media platforms have a lot of users, meaning they are a great way to see what is popular among consumers. When searching for a new product idea, you can check to see what types of items people are talking about. Given their visual nature, Pinterest and Instagram are two of the most effective platforms for finding inspiration.
Google Trends is a tool that shows you how interest in a particular subject is changing over time. You can use this tool to uncover emerging trends as well as products that have sustained strong demand over a long period of time.
Another great way to discover product ideas is to check online marketplaces that are popular in the USA, UK, and other locations. Marketplaces like Amazon and Walmart have large customer bases. Products that perform well in these stores are generally a sign of a global trend. If you were to sell these products through your own Shopify site, you’ll likely see positive results.
Product Research Tools
Product research software is a must have when trying to discover strong products. A good tool will show you important information about a product’s historical performance and its market as a whole.
For example, with the AMZScout Amazon Dropshipping, Arbitrage, and Wholesale tool and the AMZScout PRO Extension, you can check any product on Amazon to see key metrics such as monthly sales, revenue, sales history, and more.
Here is a quick way to use the PRO Extension to find in-demand products for dropshipping on Shopify.
1. Install the AMZScout PRO Extension. Enter your email address to get started. No payment information is required for the free trial.
2. Use the Amazon search function to find a starting product.
3. Wait for the results. Once the results page loads, click the AMZScout icon in the lower-left corner of the browser to open the extension.
4. Check the product’s demand. Look at the results table to review important metrics for products in the niche. You can use the sales and revenue stats as the benchmark for a product’s demand. As a general rule, it’s best to focus on items with at least a few hundred
5. Check the product’s sales history. Selecting the row for a product will reveal a link to the Product’s History. By clicking this link, you can see a graph that shows the product sales over time. The top products have consistent sales without fluctuations due to seasonality or loss of interest.
Additionally, you can also use the AMZScout Amazon Dropshipping, Arbitrage, and Wholesale Extension for researching products. With this tool, you can quickly review products on Amazon for important dropshipping product criteria. Here’s how to use it:
1. Install the AMZScout Online Arbitrage and Dropshipping Extension
2. Begin your free trial. All you need is your email to get started.
3. Go to Amazon and find an interesting niche. You can use some of the places previously listed to get your starting ideas.
4. Select a product for further analysis. When you go to a product page, the extension will add a window with several key pieces of information. Among these is whether or not the product is a private label item.
2. Find Suppliers
Once you find some good product ideas, you’ll then need to find suppliers that sell those items. With dropshipping still growing in popularity through 2022 into 2023, there are plenty of suppliers that offer dropshipping services. Here are some of the best places to find dropshipping suppliers:
Google Search: A simple Google search with your product name and “supplier” is a straightforward way to get an initial list of potential suppliers.
Special Directories: Dropshipping directories are databases that contain a record of suppliers that offer dropshipping. These are good places to find US suppliers, with faster shipping times.
Marketplaces: It is possible to order products from other marketplaces and to have the seller dropship the delivery. Some good examples of markets to find products include AliExpress, Alibaba, and eBay. Note, that if you use a marketplace supplier, you’ll have to pay taxes on each purchase. This can cut into your profit margins per sale
Print-on-Demand Services: Another way to source dropshipping products is to use a print on demand service. With a POD service, you use designs to create unique products. This could be jewelry, accessories, t-shirts, or any other type of clothing.
3. Build Your Store on Shopify
After you find the right suppliers for your products, the next step to get started with Shopify dropshipping is to build your online store. Shopify makes this process simple, which is why it is one of the most popular platforms for e-Commerce websites.
Here are the basic steps to set up your store:
1. Open your Shopify account. You’ll need to enter your email or sign up via your Google account.
2. Start your free trial. Upon registering with your email, you’ll be given a 3-day free trial with full access to the platform.
3. Choose your Shopify plan. In your account settings, you need to choose a plan and provide a payment method. If the trial expires before you select a plan, the site won’t be accessible via the web.
4. Select a theme and customize your store. Shopify themes are templates that determine the overall look for your site. After you find a theme that meets your needs, you can customize the different theme elements to create a unique feel for your site.
5. Add your products. Next, you’ll need to add your products to your site. The essential information to have includes, titles, descriptions, specifications, and images. Depending on your supplier, you may be able to add product information in an automated manner. For example, with the
6. Set up payment gateways and custom domain. Finally, you’ll need to enable a payment gateway to accept payments on your site. You’ll also need to set up the domain for your site. This is the unique address where people will find your site on the web.
Pros and Cons of Dropshipping
Like all business models, dropshipping has its strengths and weaknesses. Below, we will look at some of the biggest pros and cons to consider when starting a Shopify dropshipping business.
Low Startup Costs
The biggest pro of using dropshipping is the ability to get started with little money upfront. Because you are not paying for the products, your only costs to start selling are the fees for your Shopify plan and product research app for finding products. This means it is easier to start your business and you face less financial risk.
Diverse Product Offerings
Another advantage of using dropshipping is that it makes it easier for you to offer a wider range of products. When you get your products through wholesale or private label, a bigger catalog means higher procurement costs. However, with dropshipping, you can expand your catalog without incurring any more costs.
Sell Higher Priced Products.
Dropshipping is great if you want to sell higher-priced products. Higher ticket items usually have higher sourcing costs, making them less attractive if you use a business model where you buy inventory upfront. But, with dropshipping, you can list higher-priced items without worrying about these costs
Keep in mind that most suppliers will charge shipping fees for each order. As mentioned earlier, these fees are based on the size (weight and dimensions) of the shipment. So heavy items, like furniture, may not work for a profitable business even with dropshipping.
Dropshipping products typically cost more than other sourcing methods. This is because you have to buy individual units instead of bulk orders. Higher product costs mean lower profit margins. This will limit how much money you can make over the course of your business.
Slower Shipping Times
It is not uncommon for dropshipping suppliers to have slower shipping times when compared to other sourcing methods. This is especially true if you use an Asia-based supplier like AliExpress. In some cases, you can pay for expedited shipping. However, the extra costs will cut into your margins.
Less Control Over Products
With dropshipping, you can only sell other people's products. This is good in that it allows you to start selling with greater ease. However, it means you have limited to no control over the product itself. This makes it harder to stand out from the competition.
PRO Tips for Shopify Dropshipping
Here are some extra tips for a successful Shopify dropshipping business:
1. Advertise Your Products
To get sales you need to get people to your site. Paid ads are one of the best ways to do this. With a paid ad campaign, you can directly target people that are actively looking for the products you sell. Some of the most effective platforms to advertise your Shopify store include Google Search and Shopping Ads, Facebook, and Instagram.
Advertisements are particularly important in the early stages of your business. Over time, you’ll get visitors from organic search as well as direct visitors as more people become familiar with your business. But, in the beginning, paying for ads is the best way to get new customers.
2. Check Your Suppliers Before Selling
For a dropshipping business, it’s important to do thorough research before picking a supplier. You want to check for reviews from previous customers to verify the supplier’s reliability and product quality. You should avoid suppliers that look illegitimate or that have negative feedback.
You also want to check with suppliers for exclusive deals and services like custom packaging. This can help you showcase your brand while also making sure that customers don’t see your supplier’s information instead of yours.
3. Expand Your Business to Different Platforms
One of the best things about e-Commerce is how easy it is to sell through multiple channels. After you find success with your Shopify store, you can expand your audience and grow your business by branching out to other platforms.
Naturally, Amazon is one of the best sales channels to adopt. Other notable places include Walmart, Etsy, and eBay. Marketplaces like these have high demand and you are allowed to drop ship products provided you follow a few simple rules. Eventually, if you decide to test new sourcing methods, you can use Amazon's FBA logistics service for your order fulfillment. This will allow you to try new types of products without having to ship goods yourself.
One of the biggest differences to selling on a marketplace vs your own site is the competition. Before you take the time and effort to expand to a new channel, you want to research the market for your products in that particular channel to see how competitive it is.
You know the key steps to start dropshipping with Shopify. While dropshipping is an easy business model to get started, long-term success requires patience and proper planning. If you find a winning product and market it effectively, the effort will definitely be worth it.