Shopify Dropshipping: Everything You Need To Know To Start A Dropship Business On Shopify

If you want to start a successful dropshipping business, Shopify is the best platform for building your online store.

It makes it easy to add products and offers all the features you need to turn your visitors into customers.

In this guide, we’ll break down everything there is to know about dropshipping on Shopify and how you can get your business up and running quick and easy.

Table of Contents

What is Shopify Dropshipping?

Shopify Dropshipping involves listing and selling products on your Shopify store of which you do not hold the inventory.

Instead, you partner with suppliers who store the products you want to sell. You then create an ecommerce store using Shopify and list those products. When a customer places an order, you pass the order information from your Shopify store on to the supplier, pay the supplier for the product, and the supplier ships the item to the customer.

Check out this diagram from Printify for a high-level overview of how dropshipping works.

What Are the Pros and Cons of Shopify Dropshipping?

Dropshipping is a great business model for sellers that are new to ecommerce. There are many positives that you will not find with other types of businesses. Shopify makes dropshipping even easier with advanced ecommerce functionality, a beginner-friendly interface, and a massive app store.

Let’s take a look at some of the pros and cons of dropshipping on Shopify so that you know what you’re getting into when you launch your store.

Shopify Dropshipping Pros

• Low investment and risk: Because you don’t have to buy any inventory upfront, dropshipping has very little startup costs and very low risk. When you use Shopify as your ecommerce platform, you only need to pay $29 per month to host your online store. If no one places any orders on your site, you aren’t left sitting with inventory that you spent thousands of dollars on.
• Shopify offers seamless support for the best dropshipping suppliers: Most of the best dropshipping suppliers integrate seamlessly with Shopify. With Shopify, you can simply download a supplier’s app and add products to your site with just a few clicks.
• Easy to automate: When you use Shopify to fulfill dropshipping orders, you are able to automate much of the fulfillment process which would otherwise take up a considerable amount of time. Instead of having to pick, pack, and ship each order, you simply use one of the dozens of Shopify dropshipping apps to send the details to the supplier who takes care of the rest.
• Low overhead costs: There typically is not a lot of expenses involved with dropshipping. The only costs you’ll have to pay include your ecommerce platform, domain name, dropshipping app, and any other app you add to your store. This is much less expensive than running a business where you need to purchase equipment and then pay staff to operate it.

Shopify Dropshipping Cons

• Harder to use page builder: The page editing interface in Shopify is not as user-friendly as a platform like Wix. If you want to make it easier to design high-quality web pages you may want to consider adding a Shopify app like Shogun or Pagefly.
• Low product margins: Dropshippers tend not to get the best price for their products, making the margins for each item lower on average. This is because dropshippers don’t buy any items up front so they are not going to get the bulk discounts that say a brick and mortar retailer like Walmart would.
• Lack of branding: When you dropship you have little control over branding because anyone can sell the same products you sell. It is also harder to add little touches like custom packaging as many dropshipping suppliers don’t support this.
• Logistics issues: Because you are totally reliant on the supplier for the order fulfillment process, dropshipping can lead to delivery complications when the supplier has an issue with an order and they are not able to communicate such with you immediately. You also have little control over inventory and run the risk of selling out of stock products if the supplier’s data feed is not constantly up to date.

Why Should You Use Shopify for Dropshipping?

Shopify is one of the most popular ecommerce platforms on the market today. It currently powers 21% of all online stores, second only to WooCommerce. Naturally, it’s a first choice for many individuals looking to start a dropshipping business.

The advantage that Shopify has over other ecommerce platforms when it comes to dropshipping is a combination of ease of use with advanced ecommerce functionality. When you use an open-source platform like WooCommerce, you have unlimited options when it comes to adding features and customizing the design but it is very difficult for beginners to use. With a platform like Wix that was originally designed as a page builder, you have something that is incredibly easy to use but it doesn’t offer all the commerce functionality you may want to manage your store.

With Shopify, you get the best of both worlds. The platform is intuitively designed so it’s easy to manage every aspect of your store. You can add products with ease, manage your inventory, track your sales, and run marketing campaigns all from your Shopify dashboard.

Shopify also has an app store with thousands of apps for you to add even more features. Among these are several apps to connect your platform to some of the best dropshipping suppliers. This is a critical part of running your dropshipping business as it helps ensure that inventory levels are accurate and that you do not need to manually place each order with the supplier.

How Much Does It Cost to Start Dropshipping on Shopify?

A great plus to dropshipping on Shopify is that it doesn’t cost a lot to get started.

The main costs that you’ll need to cover include, your Shopify plan, your domain name, and your dropshipping platform.

Here is the estimated amount you can expect to spend on each of these:

• Shopify: $29 per month
• Domain name: $15 per year
• Dropshipping platform: $9 - $49 per month

Depending on what features you want to add to your store, you may need to add a few Shopify apps, some of which may require payment. We’ll discuss some notable apps for running your Shopify dropshipping business later and their potential cost.

How to Get Your Shopify Dropshipping Business Ready

Before we get into how to construct your Shopify store, there is action needed to get your business going in the right direction.

Depending on the suppliers you use, you could in theory start dropshipping on Shopify without forming a legal business. Regardless of whether you choose to form a business, there are some startup requirements you’ll need to take care of.

We’ve put together a detailed guide on how to start a dropshipping business for you to check out but we’ll highlight the main points below.

1. Research and Choose Your Dropshipping Niche and Product

It is important to research the market (or niche) that you want to enter before starting your business. This will help ensure that there is enough demand for your products for your business to become profitable.

It will also keep you from entering a market that is too competitive for you to get any real traction.

To find a good niche for your dropshipping business, you’ll want to make use of keyword research tools like Ahrefs and product research tools like Helium 10. These tools will allow you to analyze the opportunity afforded by a particular type of product by seeing how many people are searching for it and how strong the competition is.

Here are some popular dropshipping niche ideas worth considering:

• Masks
• Drones
• Apparel
• Jewelry
• Toys
• Home and Garden
• Beauty and Health

2. Name Your Store and Buy Your Domain

Your store name is important as it is a major part of branding and influences your customers’ opinion of you.

If you choose to form a legal business, the name that you use for your store can be different from the business name.

Once you have a name for your store you’ll need to buy your domain name, which is the name used to access your website on the internet (like ecompath.com). Shopify has its own domain registry so you can buy it from them to help reduce the number of different accounts you need to manage. It also makes linking the domain to your store easier.

You’ll also want to claim the social media handles for your business name as you will need these for marketing your business.

3. Create a Logo

Your logo establishes your brand identity and will be present throughout your website.

You don’t need to create the logo yourself as there are plenty of inexpensive services you can use to have one made.

4. Find Your Dropshipping Suppliers

Choosing your dropshipping suppliers is one of the most important parts of starting your dropshipping business. You want to find someone with high-quality products who is reliable, and if possible, offers fast shipping times.

You have a couple of options when choosing a supplier: partnering with a wholesaler directly, using a dropshipping service/platform, or using a print on demand company.

Using a dropshipping platform is usually the go-to choice for new dropshippers. These platforms aggregate products from dozens of suppliers into a centralized place so merchants are able to find and add the items they want to sell to their store with greater ease. Because these platforms handle sourcing the products from the suppliers (or manufacturers) you do not need to worry about getting a reseller’s license to sell the products.

Another benefit of dropshipping platforms is that they give you the technical tools to streamline managing your dropshipping business. This includes the ability to push products to your store with the click of a button and to send order details to the supplier in a few clicks as well. All the most popular dropshipping platforms including Oberlo, Spocket, Modalyst, CJ Dropshipping, Dropified, Inventory Source all have Shopify apps to seamlessly connect your dropshipping and Shopify platforms.

What are the Best Dropshipping Apps for Shopify?

The best dropshipping suppliers offer robust applications that you can use with your Shopify site to streamline how you manage your dropshipping business.

Let’s take a look at the best dropshipping apps for Shopify.

Oberlo

The Oberlo app gives Shopify merchants access to the full array of products on the AliExpress marketplace. You can browse for products directly within the Oberlo app and easily add them to your store. They also have a Chrome extension for adding products directly from AliExpress. When a customer places an order, you can use Oberlo to automatically place the order with the AliExpress supplier with just a few clicks. Once the supplier has shipped the order, the tracking info is added to Oberlo and automatically sent to your customer.

Oberlo offers a free plan however it has limited features. If you want access to everything the platform has to offer (including shipping tracking) you’ll need the boss plan which costs $29.90 per month.

Spocket

Spocket is a dropshipping app that integrates seamlessly with your Shopify store. It provides direct access to dropshipping suppliers across the US and EU and handles all the ordering and communication with the suppliers.

The app works similar to Oberlo as you can browse products directly on the app and push them straight to your Shopify store. When a customer buys a product you can process the order in Spocket with just a click. You’ll be charged for the product and they’ll send all the order information to the supplier. Once the order is shipped the tracking information will be synced with your Shopify store.

Spocket has a free plan but it only allows you to browse the catalog, not add products or place orders. For that, you’ll need one of the three pricing plans:

• Starter Plan: $24 per month
• Pro Plan: $49 per month
• Empire Plan: $99 per month

The Starter Plan offers the full range of features but it only lets you add 25 products so if you want to manage a larger catalog you will need at least the Pro Plan.

Other Notable Apps

These dropshipping apps offer similar functionality with an interface that allows you to browse and add products with a few clicks and automate order fulfillment.

• Modalyst: US-based and AliExpress suppliers
• CJ Dropshipping: Products from around the world including US warehouses
• Inventory Source: US-based suppliers
• Wholesale2B: US-based suppliers
• Dropified: AliExpress and eBay suppliers

How to Set up Your Shopify Dropshipping Store

After you decide which suppliers and apps you want to use, it’s time to build and launch your Shopify store. Here is a simple step-by-step process you can follow.

Sign Up

The first step is to create your Shopify account.

Go to the Shopify homepage, type in your email, and start the free trial.

You’ll then be prompted to provide a password and the name of your store.

Note, that Shopify only allows one store to use a specific name so if another store is already using the name you want to use, you’ll need to enter a different one. The name is used to create a unique URL at .myshopify.com/ that allows you to log in and manage your store. The name doesn’t matter too much as the domain name you use is how you will be presented to customers.

You’ll then be able to log in to your Shopify account to begin setting up your store.

Add Your Domain Name

To add your domain name, you’ll need to go to Online Store > Domains. You’ll then click on Connect Existing Domain. Type in your domain name and click next.

You’ll then need to route the domain so that it can be used for your store. If you bought your domain from a registry other than Shopify, you will need to log in to the account for the register and update the DNS settings to have the domain pointed to your Shopify store.

Configure Settings

Find the Settings icon down at the bottom of the right-hand navigation.

Click it on and you’ll arrive on a page like the one below.

Here are some of the settings you’ll need to configure:

Checkout

The checkout settings are necessary to fine-tune the details of your checkout process. For example, you’ll have to decide whether to force customers to create an account when checking out or if they can check out as a guest. You’ll also need to decide which checkout fields are enabled and if customers can checkout with their phone number instead of an email address.

This is also where you will configure your abandoned cart recovery settings. These messages allow you to send a follow up to customers who leave your store with an item still in their cart.

Notifications

This is where you will manage the notifications that are sent to the customer throughout the buying process (order confirmation, shipping confirmation, order refund, etc.). Shopify has all these enabled by default but the emails aren’t the most attractive so you many want to customize the more important messages. If you want to edit the messages within Shopify you’ll need to know HTML. If you don’t you can use an app like Orderly Emails.

Shipping and delivery

This is where you will configure your shipping options. If you want to sell products to anyone at a certain location (country), you’ll need to set up a shipping zone with the shipping rate and shipping type. If you do not set up a shipping zone for a location, users from that area will not be able to complete the checkout. For example, if your dropshipping supplier does not ship internationally you would only create a shipping zone for the US.

Payments

The payment settings is where you will configure the payment processors you will use to collect payments from your customers. Shopify provides support for over 100 different third-party processors including Paypal.

They also have their own payment gateway called Shopify Payments. It is easy to set up as you only need to enter your personal or business information and the bank account you want to withdraw funds to. Shopify Payments is not available everywhere but it is available for sellers located in North American countries. You can set your own payout schedule with a minimum period of one business day.

An important factor to consider when setting up your payment gateways is processing fees. Shopify charges extra transaction fees for every sale completed with a gateway other than Shopify Payments. The amount of these fees is based on your plan:

• Shopify Basic: 2%
• Shopify: 1%
• Advanced Shopify: 0.5%

Another thing to keep in mind when adding payment processors to your store is how long it takes for the processor to pay out the order proceeds to your bank.

If you are starting your dropshipping business with little capital, you may need to use the same funds from the sale to buy the item from the supplier. If your payment processor takes a long time to disburse the funds, this will slow down your delivery times.

Some solutions to this are to use a credit card or to open a business Paypal account. With a Paypal business account, you can get a debit card that is connected to your Paypal balance. You can then use Paypal as your processor to immediately be able to use the proceeds from the sale to buy the product from the supplier.

The Paypal Business debit card has a $3,000 daily transaction limit but if you are moving this level of merchandise in a day, you’ll have the means to use other payment methods.

Taxes

Your tax settings will determine how you collect taxes from your customers. As an ecommerce seller, you are required to collect taxes from every individual that places an order in the same state where you have a “sales nexus”. Shopify will automatically add a sales nexus for the location you use when creating your store. You can also configure additional settings like overriding the tax settings for particular product categories.

Legal

With the legal settings, you can set the details for your privacy policy, terms of service, refund policy, and shipping policy. You’ll then need to create pages for these and add links to them somewhere on your site, ideally in the footer.

Choose a Theme

Your Shopify theme is a pre-configured layout that determines how you can design your store. Each theme comes with a pre-made template along with a certain amount of settings that you can use to customize your website’s design.

Each Shopify store comes with a theme pre-installed but you can easily change the theme to one that you prefer.

From the Online Store section of your dashboard, click Themes. You’ll then be taken to a page where you control the theme for your Shopify store.

You can see all the themes you have installed and which one is active.

To get a new theme, there are two options; free and paid.

To download a free theme, click the Explore Free Themes button. A pop-up will appear with nine free themes. You can preview the theme before adding it to your theme library.

To change your theme to the one you just downloaded, click the Actions button next to that theme and hit Publish. The theme will then move to the Live Theme section and you can customize it.

If you want to add a premium theme you can either visit the Shopify theme store or go to a third-party marketplace like Theme Forest to find an option that you like.

Add Your Products

Once you have set up your theme you can begin adding products to your store.

How you will do this will depend on the dropshipping supplier and app that you use. Let’s take a look at how you’ll import products with some of the more popular Shopify dropshipping solutions.

Adding Products With Oberlo

To add products to your store using Oberlo you have two options: use the Oberlo app to browse and upload products or download the Oberlo Chrome extension and add the products directly from AliExpress.

If you choose to use the Chrome extension, you’ll first need to download the extension. Once you do, whenever you go to AliExpress you’ll notice an add to Oberlo button that you can click to upload the product to your Oberlo platform.

Products that you add will go to your import list. You can then edit the product details before pushing them from the Import List to your store.

Adding Products With Spocket

Adding products with Spocket works similar to Oberlo. Open the app and click search products. Once you find a product that you want to add, click on it and select add to import list. You can then fine-tune the product details before pushing them to your Shopify store.

Adding Products With Modalyst

With the Modalyst app, you can browse a diverse catalog of products from within the app. You’ll have the options to add items from Modalyst suppliers which include both independent and name brands as well as products from AliExpress.

You click the Add to Import List for a product to move it to your Import List, you then edit the item to change the name, description, variations, price, and images before pushing it to your Shopify store.

Create Your Web Pages

After you have added your products to your Shopify store, you’ll want to make sure you have all the pages customers may look for when visiting your store. Your theme will likely have templated versions of some of these made but you may want to customize them to fit the feel of your store.

• Shipping and Returns: This page details your shipping costs and times as well as your returns policy. You can simply copy and paste the information that you saved in the legal settings.
• Contact: This page will enable customers to get in touch with you. It can include a contact form, an email, or a phone number.
• About: This page will tell the story of your business and how you are unique from your competitors.
• Privacy: This page will detail how you collect customer data. You can simply copy and paste the information that you saved in the legal settings.
• Terms: This page establishes the terms for using your website. It’s another page where you can add the info you saved in your legal settings.

Add Any Apps That You Want to Use

Shopify comes with a great range of features out of the box but there are plenty of apps you can use to add more functionality to your store.

Here are some useful ones that may help you with your dropshipping business:

• SEO Optimizer - All‑in‑one SEO: This app will automate many of the technical SEO factors including adding meta information to pages, alt text to images, redirect broken links, and more.
• Google: With the official Google app for Shopify you can connect your store to Google Merchant Center and Google Advertising. You can then have your products appear for Google Shopping searches and you can run your advertising campaigns right from your Shopify dashboard.
• Pinterest: The Pinterest app is similar to the Google app in that it will allow you to connect your store directly to your Pinterest account. You can then automatically push your products to Pinterest as buyable pins and manage your advertising campaigns from the Shopify dashboard.
• Kit: This app helps you create Facebook and Instagram ads by analyzing your customer data to create highly targeted lookalike audiences and ad copy. It also integrates with dropshipping apps like Modalyst and Spocket to find relevant products to recommend to your customers.

How to Market Your Shopify Dropshipping Business

Once you’re ready to bring customers to your store, it’s time to start marketing your business. A great benefit to using Shopify is that it integrates seamlessly with all the most popular marketing channels so that you can get your campaigns running up and easily.

Let’s take a look at the primary marketing channels you’ll want to consider for bringing customers to your store.

Google

Google gives merchants the ability to bring free (organic) and paid traffic to their store.

Organic traffic comes from ranking for specific keywords in Google’s search index. This can be great for your business as sales from organic traffic lead to more profitability as you do not need to pay for advertising.

That said, ranking in Google via SEO (search engine optimization) can take time. You’ll need to ensure that all the technical factors like meta descriptions, image alt text, and page speed are in order and that your content is optimized for the keywords you want to rank for. Using a plugin like the previously mentioned SEO Optimizer can help quite a lot.

Google’s paid advertising options include Google Shopping and Google Search ads. For search ads you set up a campaign by selecting specific keywords to target, creating relevant ads, and setting how much you are willing to pay for each customer who clicks through to your website.

Shopping ads work in a similar manner except that instead of creating the ad, Google uses the products from your store that you add to Google Merchant Center. When you run a shopping campaign, the product will show in the shopping tab as the user browses. Certain search queries will show a few shopping ads at the top of the results page. It is also possible to have your products appear in shopping results for free similar to organically ranking for keywords.

With Shopify’s Google app, you can easily add your products to Google Merchant Center and can create and manage Google Shopping campaigns right from your Shopify dashboard.

Social Media

Social media channels like Facebook, Instagram, and Pinterest are another great way to reach potential customers. They each provide advanced targeting options so you can target audiences that are interested in the types of products that you sell. They are also great for retargeting as you can send highly relevant ads to shoppers who have previously visited your site. You will need to add the Facebook and Pinterest (done automatically if you use the app and link your account) tracking pixels to your site to collect the valuable customer data needed to run these types of ads.

The best way to start running campaigns for the different social media platforms is to use some of the apps mentioned above. This will enable you to easily sync your products to the social media platform so you can use them in the advertisements. These apps will also help you with audience targeting to help your campaigns be more effective, especially if you are new to marketing. There is some natural trial and error to running campaigns for any business so this can help reduce the learning curve.

How to Manage Your Shopify Dropshipping Store

Order Management

Once you start driving visitors to your Shopify dropshipping store you should hopefully begin to see orders come in. You can easily track all your orders from the Orders dashboard in Shopify.

As the orders come in, you will need to handle fulfilling those orders. You may not have to ship the products yourself, but you will have to pay the supplier for the product and give them the customer’s information so they know where to ship the items.

If you use any of the dropshipping apps we discussed earlier, this is a straightforward process. The apps will sync with your Shopify store so that they have all the order information. They will allow you to place the order with just a few clicks, automatically populating the customer’s shipping information. Once the order is shipped the tracking information will automatically be synced to Shopify and sent to the customer.

This should give you an idea of how simple the fulfillment process can be with dropshipping. Now, returns can be a little tricky as you need to communicate with both the customer and supplier throughout the process. You’ll likely need to have the customer ship the items back to you before you send them back to the supplier.

If you choose to offer returns, Shopify helps make the process easier. You can easily initiate a return from your Orders dashboard. If payment was made using Shopify payments, customers will automatically be refunded. If they used an external processor like Paypal, you may need to manually initiate the refund.

Inventory Management

Inventory management is one of the most challenging parts of running a dropshipping business. Because you do not have the products yourself, keeping an accurate accounting of available stock isn’t always simple. This is complicated further when a supplier provides products to multiple sellers and their inventory changes rapidly.

Using a good dropshipping app can help eliminate some of these products. With solutions like Spocket and Oberlo, suppliers’ inventory is automatically updated when there are any changes. These inventory levels are then synced with your Shopify store so that you have an accurate stock level on your site.

Tracking and Analytics

Shopify makes it easy to track the performance of your store. If you go to the Analytics section of the platform you’ll see detailed stats for all the important ecommerce metrics. This includes:

• Total sales
• Conversion rate
• Top selling products
• Top traffic sources Average order value
• Top landing pages
• Returning customer rate

You can then use these metrics to focus your efforts on what is driving the most success. If you want to use Google Analytics for even more tracking, you can easily configure it with your Shopify store by going to Online Store > Preferences and adding your UA code.

Dropshipping on Shopify FAQs

How does dropshipping work on Shopify?

Dropshipping on Shopify works by connecting with a dropshipping supplier and then adding their products to your site. The most popular dropshipping suppliers all offer apps that integrate directly with Shopify so that you can add products with just a few clicks. Once you have added products and designed your store, you need to drive traffic to your site to start seeing sales. Most dropshipping platforms also streamline the order fulfillment process so that you can pay for the order and push the customer information to the supplier with a few clicks.

How much money can you make dropshipping on Shopify?

How much money you can make dropshipping with Shopify will depend on several factors. First, it depends on your product price and margin. If you sell higher ticket items with a big margin, you won’t need as many sales to make a solid amount. On the other hand, if you sell products that only make you $10 net profit per product, it will take a lot more sales to earn significant profits.

Next, how much you can make dropshipping with Shopify will depend on how much you spend on marketing. If you invest a good amount into campaigns that are successful, you’ll position yourself to earn more money.

Is Shopify Good for Dropshipping?

Of all ecommerce platforms, Shopify is the best for dropshipping. It is inexpensive, easy to use, and offers tons of integrations for high-quality dropshipping suppliers. You can get up and running quickly and begin seeing sales in a short time if you market effectively.

Is Dropshipping Worth it?

If you are looking to start a business dropshipping is definitely worth it. There is little risk to starting the business as you do not have to invest in inventory. It is also easy to manage as you do not have to pack and ship orders yourself. You simply need to research, plan, create a store, add products and market your business.

Shopify Dropshipping Summary

If you want to start a dropshipping business, Shopify is the best choice for your ecommerce platform. It is easy to use and offers direct integrations for all the best dropshipping suppliers.

To get started dropshipping on Shopify, you need to take the following steps:

• Research your niche and product idea
• Buy your domain name and create a logo
• Find your dropshipping suppliers
• Create your Shopify account
• Configure your settings
• Choose your theme
• Add your products
• Add any apps that you want to use
• Market your business with Google and social media
• Manage your store and track your performance

This guide covers the essentials of using Shopify for your dropshipping business. If you want to learn more about dropshipping including detailed insight into finding suppliers, marketing your store, and measuring your performance, check out our ultimate dropshipping guide.