Getsitecontrol Insider

How to Start a Dropshipping Business on Shopify

April 23, 2021 Getsitecontrol Episode 29
Getsitecontrol Insider
How to Start a Dropshipping Business on Shopify
Show Notes Transcript Chapter Markers

Dropshipping is easy on paper. In reality, there are some questions you need to ask yourself before getting started.

  • How profitable is dropshipping?
  • What ecommerce platform do you work on?
  • How do you actually open your store?
  • How many products do you need to start?
  • How do you promote your store?

In this episode, we'll go over each of these questions and provide a handful of resources to help you get started.

Read the text version with the step-by-step guide to setting up a Shopify store here.

Dropshipping apps we recommend: Oberlo, Spocket, Modalyst.

Helpful resources:

You’re listening to Getsitecontrol Insider, where we talk about all things ecommerce. 
In this episode, we’ll cover the basics of starting a dropshipping store on the largest ecommerce platform in the world, Shopify.

Stay tuned!

Dropshipping is a unique opportunity for ecommerce entrepreneurs to start a business with minimal capital and experience. All you have to do is pick your products, launch your store, and market it successfully.

Well, that’s easy on paper. In reality, there are some questions you need to ask yourself before getting started. 

  • How profitable is dropshipping?
  • What ecommerce platform should you work on?
  • How do you actually open your store? 
  • How many products do you need to start?
  • How do you promote your store?

Let’s answer them, one by one.

How profitable is dropshipping?
In theory, dropshipping looks like a terrific business model. Think about it:

  • You require little capital to get started.
  • You don’t need to purchase any stock.
  • It doesn’t take much time to launch your store.
  • You don’t need much experience (although it’s always welcomed).

However, a key point most seem to ignore — especially the “gurus” selling their courses on YouTube and Facebook — is profitability.

Your profitability will depend on three aspects:

First. The number and quality of suppliers you work with: Making four, five, or even six figures in dropshipping requires nothing more than a few quality suppliers that sell unique, and preferably expensive, products.

Second. The marketing channels you use: Organic channels like SEO and email marketing will increase your margins, but they will take time to work. Most likely, you will use paid advertising from Facebook and Google to generate your sales; these channels will be your largest profit-draining part of your business.

Third. The products you sell: Sell cheap products every other competitor is selling, and your margins will be low; sell expensive products with few competitors, and your margins will be high.

These three points can be grouped in two different approaches to dropshipping: low-ticket dropshipping and high-ticket dropshipping.

If you choose low-ticket dropshipping, you resell cheap, generic products from AliExpress.
Most dropshippers that fall under this category promote their products through Facebook ads, saturating the offers and the marketing channels.

If you choose high-ticket dropshipping, you resell products from established brands that offer special, expensive products. Since the profit margins are higher, dropshippers often use more expensive promotion strategies, like Google Ads and retargeting.

Opening a high-ticket store will require a higher initial time investment for vendor negotiations. You will also need a strong marketing and brand strategy that shows your vendors you are a potential profitable partner for them.

However, you can make four to five figures a month in profits with the high-ticket approach — all you need is to develop your marketing plan and pick your products wisely.

Why Shopify can be a good platform for dropshipping
There are multiple ecommerce platforms you can use to start your dropshipping business. One we highly recommend is Shopify.

With Shopify, you will neither have to get a hosting solution separately nor install any complex software. This platform takes care of everything for you, so you get to work on growing your business.

What makes Shopify better suited for your dropshipping store than other e-commerce platforms is its App Store, which Shopify reports to have over 4,200 apps by May 2020.

Among those 4,200 apps, you can find over 150 dropshipping apps you can plug and play in your store. These apps, which we'll talk about later on, will help you find dropshipping vendors, add their products to your store, and market your products successfully.

You also get an extensive range of payment options — you can even offer cryptocurrency payments! — customer support tools, and more.

Finally, Shopify has partnered with DHL and UPS to offer affordable shipping options for your customers. Since fulfillment is such a critical issue for dropshippers, these partnerships will come in handy once you start making sales.
How many products do I need to start dropshipping?
Although seemingly irrelevant, the number of products you sell will play a large role in your branding and marketing efforts.

One common practice dropshippers use is to sell as many products as possible. The problem with this approach is that, as the saying goes, “if you try to sell to everyone, you sell to no one.”

General dropshipping stores, as they are called, are the dropshippers’s curse. Think about it: if you were trying to buy from a store that sold everything from teacups to phone cases to wristbands, you’d go to Amazon or Walmart.

Worse yet, if that seller told you they’d take 15 to 30 days to ship your product and didn’t give you a good tracking code, you’d be suspicious and avoid buying from them.

These run-of-the-mill AliExpress dropshippers forget to think from a consumer’s perspective, looking to build a relationship with a brand and not buy from a generic store like theirs.

In contrast, niche dropshipping stores cater to specific customer segments, like dog owners or chess aficionados.

Thanks to your product offering’s specificity, a niche dropshipping store lets you connect with your customers.

You can use social media and your email list to develop a long-lasting relationship that will drive them back again and again. As a consequence, you will lower your customer acquisition costs.

The only advantage a general dropshipping store has with a niche one is that you can use the former to test new products and markets and learn the skills required to succeed with the latter. You can also start a generic store by selling generic but somehow related products within a niche and then pick the most profitable products to relaunch your store in the future.

When it comes to picking the number of products to sell, it’s not a matter of hitting a threshold but defining a broader marketing strategy first and selecting the products accordingly.

A generic store can hold from a few dozen to hundreds and thousands of products simultaneously; there’s no limit.

On the other hand, a niche store can have as little as one product and as many as needed to fulfill its needs. For example, you could have one product — say, a protein powder — and multiple accessories that you use for upselling and cross-selling — say, pre and post-workout powders, shakers, and ebooks on nutrition and training.

Whatever your choice, it’s best to get started with a handful of products and learn the ropes before trying too many things at the same time. Think about it this way: if you can’t sell one product, what makes you think you will be able to sell 10?

To see how you can set a Shopify store for dropshipping, click on the link in the episode description. It contains and easy step-by-step guide with lots of resources to help you get started.

5 tools to help with competitor and product research

By now, it’s clear that picking the right products — and their right amount — is crucial to managing a successful dropshipping store.

The following five tools will help you research what your competitors are selling to find new products to sell in the same category:

Ecomhunt - a curation platform that highlights the hottest products daily from AliExpress and Oberlo. Their analysis includes the products’ costs and average selling price, giving you an average profit margin to work on.
They also analyze the number of companies selling the product at hand, helping you decide what products are oversaturated with competitors and what aren’t.

Niche Scraper – another platform that uses a research bot providing the latest data on the highest-selling products on AliExpress and Shopify. They also offer a hand-picked list of products, including the suppliers’ names, ad examples, and more.
The company also lets you analyze your competitors to reveal their best-selling products, traffic data, and sales estimates.

Allfactor a competitive analytics platform that aggregates valuable data from the largest ecommerce companies and platforms, including Shopify, Walmart, Amazon, and Etsy.
The company’s data will help you see your competitors’ sales volumes, product offerings, and new trends coming up.

SimilarWeb -  one of the largest web traffic intelligence tools in the market. Their free tool provides you with an overview of your competitors’ website traffic volume, marketing channels, keywords, and display ads.

Ahrefs  - a popular SEO and content marketing tool that provides you with a detailed look at your competitor’s SEO performance. You can use Ahrefs to find new keyword ideas, uncover the keywords your competitors rank for, and discover link-building opportunities.

Now that you have an idea of how to get started, let’s talk about ways to promote your dropshipping store without having to hire a full-time marketer

First. Build an email list to get repetitive customer
On average, 55% of visitors leave a website within the first 15 seconds of their visit. In this short time span, you need to catch your visitors’ attention, so they stay on your site and, if possible, get them to sign up for your email list.

With an email list, you can engage, educate, and build a long-lasting relationship with your subscribers, so they become interested in your products.

What’s more, you can drive more conversions from your existing customers than from people who have never visited your site before.

To get people to join your email list, use email popups. For instance, you can offer a first-purchase discount in exchange for a subscription. This way, even if they don’t make a purchase during their first visit, you’ll be able to reach them later via email.

Second. Use automated email marketing campaigns
When it comes to email marketing, automation is often superior to manual work. You can — and should — send manual email campaigns under specific circumstances — e.g., a seasonal discount, important news.

However, the conversion rate of an automated campaign is 359% greater than manual campaigns. 

If you have no idea what kind of automated campaigns you should send, here are a few examples:

  • Welcome series: Introduce your subscribers to your brand
  • Educational series: Teach valuable information they can use later on with your products
  • Abandoned cart series: Persuade shoppers with products in their carts to come back and finish their purchase
  • Post-purchase series: Get valuable customer feedback and provide excellent customer service

Third. Build a social media following
The difference between a small dropshipping store and a thriving one lies in their customer base’s loyalty. A dropshipping store that has developed a following behind its brand will have a guaranteed customer base ready to buy. 

That’s something you can achieve with social media: Facebook, Instagram and Pinterest.

For best results, you want to leverage both organic and paid social media strategies.

According to the latest research, 40% of consumers find brands on social media from their personal network, 35% from influencers they follow, and 32% from word-of-mouth. 

For a dropshipper like you, this means you must focus your strategies on promoting your shared content and reaching out to influencers.

Three popular organic social media strategies you can use on your dropshipping store are:

  • Promoting product reviews
  • Adding relevant hashtags
  • Leveraging user-generated content from your customers

On the other hand, three paid social media strategies ideal for your business are:

  • Boosting your posts’ reach
  • Retargeting your existing visitors and customers 
  • Increasing your reach by using lookalike audiences from your visitors and buyers

Today you’ve learned the basics that will help you get started. Now it’s time you take action. Decide what type of dropshipping store you want to have — general or niche — research popular products, open your Shopify store, and start selling with the three methods we’ve just discussed. 

Check the episode description for more links and information.

Remember to subscribe, until next time!

How profitable is dropshipping?
Why Shopify can be a good platform for dropshipping
How many products do I need to start dropshipping?
5 tools to help with competitor and product research
to promote your dropshipping store without having to hire a full-time marketer