Shopify Dropshipping: Everything You Need to Know in 2021

You’ve got a great idea for internet business and some serious digital marketing abilities. But what if you can’t handle inventory, packing, or shipping?

No need to worry—you can delegate all of this tedious work to someone else. Or, to put it another way, “drop ship” it on someone else’s shoulders.

While still making a profit. Here’s how to get started with Shopify dropshipping.

What exactly is Shopify dropshipping?

Dropshipping with Shopify eliminates the need to stock or physically handle the items you sell in your online store. Instead, you use applications to connect your Shopify website to the items of third-party vendors. When customers place orders on your Shopify website, the app immediately transmits the information to the supplier (also known as a drop shipper) who fulfills them. Just don’t get too down on yourself. It spends four and a half minutes discussing bad dropshipping and the hazards involved before highlighting the benefits of dropshipping.

The Benefits and Drawbacks of Dropshipping

Dropshipping with Shopify appears to be a good bargain, but there are advantages and disadvantages like with every business strategy. So let’s look at them to determine whether dropshipping is a good fit for you.

The Benefits of Dropshipping with Shopify

 

The setup is simple.

If you already have a Shopify eCommerce business, you can sync it with dropshipping software. If not, you can set up an online store on Shopify in about a few hours using templates (themes). But we’ll not recommend this because there’s some serious work involved. To get your Shopify theme integrated with your website within few minutes, click here.

Low starting outlay

To start generating money with dropshipping, you don’t have to acquire the goods upfront and bear the costs of stocking, insuring, and managing them.

To manage your store, you can select a Shopify price plan that is appropriate for the size and stage of your business.

Rapid outcomes

Shopify’s dropshipping technology allows you to seamlessly sync items and pertinent information about your Shopify business with the Google Merchant Center using Shopify’s Google channel.

People use Google Shopping with a definite purpose to buy. Thus the initial sales come in soon.

Simple shop administration

Several Shopify dropshipping applications provide more functionality to your eCommerce shop, making maintenance a breeze. To attract visitors, you might concentrate on using inbound marketing tactics. There’s nothing to worry about shipping or warehousing—even, in some circumstances, cluttering your front room.

Shipping expenses can be controlled.

When you dropship using Oberlo, you can see what delivery options a supplier employs on each product page and warehouse location. If your provider is in China, choose ePacket shipping. It’s a cheap method to transport products to the United States, Canada, and the United Kingdom. Take advantage of Shopify’s American and Canadian supplier discounts. Fulfillment Network (SFN)—similar to Amazon Fulfillment. It streamlines order fulfillment and reduces delivery time and cost.

A wide selection of items is available for sale.

A single app grants you access to a database of 30,000 AliExpress items. If that isn’t enough, or if you want to test additional Shopify dropshipping suppliers in various areas, you may contact them using Shopify-integrated drop shipping directories.

 

Related Post: Top 10 World’s Largest eCommerce Companies in 2021

The Disadvantages of Dropshipping

 

Profit margins are low (Vary with product selection).

Because the dropshipping industry is competitive, merchants compete with product pricing, resulting in poor earnings.

Because you are only paid a tiny commission on each sale, you must sell many products to make dropshipping successful. You may also sell products with a Minimum Advertised Price (MAP) and dropship popular items.

Suppliers who are dishonest or untrustworthy

There are further disadvantages to not keeping and maintaining inventories. Because Shopify dropshipping suppliers frequently supply the same items to multiple merchants, it isn’t easy to forecast their availability. Integration with a dropship automation system that updates your shop when a product is out of stock at the supplier is the answer. There are also drop shipper fraudsters that prey on inexperienced sellers. As a result, only work with people who directory services have vetted.

Products do not live up to expectations.

If drop-delivered items do not arrive in excellent condition, do not fulfill all of the customer’s criteria, or are not dispatched on time, you risk refunds and negative reviews. Refunds are also available. It is good to get product samples (whether free or paid) to check them beforehand.

Expensive shipping charges

It is easy for a consumer to buy numerous goods from different vendors or regions, resulting in varied shipping prices. It raises your costs since the consumer believes they are putting a single order.

Problems with customer service

Even though you have nothing to do with the processing, shipping, and management of items in your shop, you are accountable for dealing with consumer complaints regarding various issues over which you have no control, such as an unfinished order, the wrong color, or broken packing.

How much capital do I require to begin dropshipping on Shopify?

If you combine free trials and beginner plans, you can start a Shopify dropshipping business for exactly $0.00 (Not Recommended). However, there are some necessary expenditures that your eCommerce firm must bear to get off to a good start:

  • An essential Shopify subscription is $29 per month.
  • Domain registration via Shopify costs $14 per year.
  • Theme cost (maybe applicable) $49 one-time purchase.

That equates to around $100 per month for the first year of running a Shopify dropshipping business.

On Shopify, there are premium applications for this. Your conversion rate will determine them. If it matches the average worldwide eCommerce conversion rate, you’re looking at 2-3%. This indicates that for every 100 visitors to the business, two or three converts.

For the time being, Facebook is the most important sales channel for Shopify dropshipping. According to estimates, the average click-through rate (CTR) for Facebook advertisements is 0.9 percent.

If we round it up to 1%, your Facebook advertisements must reach 10,000 individuals to get 100 visitors.

So, any idea about the cost?

In June 2021, the average Facebook cost per thousand impressions (CPM) was $11.59. We may use this figure to figure out how much it will cost to produce two or three Facebook sales:

(10,000 divided by 1,000) x $11.59 equals $115.90.

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The final cost is entirely dependent on your abilities. You can boost your profits by producing effective Facebook advertisements. The lower the cost per click, the more people who click on them.

The calculations presented above are typical. You may alter the findings by increasing the conversion rate, customer lifetime value, average order value, or decreasing the cart abandonment rate.

All of the supplementary applications come in useful here. However, you must determine whether the increased income outweighs the app fees.

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