By 2021 more than 2.14 billion people worldwide are expected to buy goods and services online. With a market that large, your business needs to get into the Shopify Drop shipping market with professionalism and expertise–immediately.
But how do you start?
You are already a web commerce specialist, storefront builder and generally the only customer service employee–now you have to maintain inventory and become a shipping expert?
If starting a Shopify drop shipping business empire is in your sights, you need to understand what it is, how it works and how to make your life easier. Read on for more.
What Is Shopify Drop Shipping And How Does It Work?
Drop shipping is a fulfillment process where you purchase goods from a wholesaler, and then they ship them directly to your customers. This method allows you to hold no inventory– so no massive warehouses and no tricky shipping calculus. You list the supplier's items for sale in your Shopify storefront, market the goods and then transmit order information to the supplier to ship.
Your supplier then ships the products ordered by your customer from their warehouse with their own shipping process. With Shopify drop shipping, you do not buy or handle the product, you manage and curate the Shopify storefronts and leave delivery to the experts. You profit by creating the connection between the buyer and the manufacturer. You can spend your time building the connection between you and your customer instead of worrying about logistics.
The Advantages of Drop Shipping
Ever dream of running your business from the beach? With Shopify drop shipping you never need to worry about renting a warehouse or actual physical store.
You can run your business from wherever you like, as long as it has a fast internet connection and power for your computer. Without a physical inventory, you can scale your business rapidly, with minimal risk. Add as many products from many different manufacturers to your e-commerce site as you like to increase your customer base.
There are no losses on unsold inventory. Since you don't carry an inventory, your capital needs are minimal.
Specialize in Customer Relationships
Your role is to market your chosen products, collect sales orders, and then forward the orders to the manufacturer for fulfillment. No need for you to become an expert in product development, inventory forecasting, product packaging, or shipment logistics.
This frees you from all those worries involved in the production-to sale-to shipping process.
Essentials for a Drop Shipping Business
Here are the essentials you must gather before starting your drop shipping business.
- Take Care of the Taxman If you are in the US, you need an employer identification number (EIN). Suppliers in the US need your EIN to ensure you are operating legally. You also need a sales tax ID or resale certificate for your state. Professional and reliable suppliers will not collaborate with you without these items.
- A Shopify Storefront or Other Website You need to have a storefront, website or minimally, an active social media account that you can use to publicize the products you sell. You need to have an easy place where you can upload merchandise images, description, and prices of the merchandise.
- Products With Profit Potential When choosing your Shopify drop shipping items, perform thorough research. The popularity of a product can determine the success of your drop shipping business. If the product is already trending, what about demand? Finally, research price and availability–you want something unique that every site does not have and it has to be reasonably priced.
Pick Your Partners
You have an idea of what you want to sell, now you need a collaborating manufacturer or wholesaler. Your store isn't ready for business without products, but why get your products from a single source? Shopify and other e-commerce sites allow you to source products from AliExpress, AliBaba, ShineOn or many other sites.
Use multiple sources to give your customers prime choices. Be prepared that for some pre-order fees. Most Shopify dropshippers charge a small pre-order fee around $2 -$5, depending on the complexity of the order and size of the items to ship. This rate is standard. Compared to the cost of receiving the goods yourself and repacking them for final delivery, this is a bargain.
Ask about minimum order sizes (MOS).
MOS is the minimum amount you need to place in your initial order. Wholesalers use this to filter out Shopify merchants with low volume. Before partnering with a certain wholesaler or manufacturer, consider the minimum order sizes and choose a wholesaler that has a MOS that fits your operating capital.
Build Your Store
You have exhaustively researched suppliers, followed market trends and selected your e-commerce platform. Now load up your product images, descriptions and prices. Remember, you will need to keep your store current with price changes, inventory out of stock and customer order status.
Other than maintaining your store, you will be transmitting orders directly to the manufacturer or wholesaler, banking payments and keeping in communication with your customers. Some of these activities may seem repetitive and unproductive.
It is entirely acceptable to automate them so you may concentrate your expertise on the parts of the business you enjoy. Many successful Shopify stores cross-promote with social media, frequent word of mouth campaigns and email. As the bridge between the customer and the manufacturer, it's up to you to build a relationship with frequent contact, incentives to buy and accurate order information.
Do What You Do Best
Bottom line, using drop shipping removes the burden of carrying an inventory and managing shipments. This gives you time to build your business and concentrate on marketing and customer relationships. Because you don't have worry about logistics or capital, you can instantly stock up an online store with hundreds of products in a short period of time, then use the shop to conduct market research.
Based on which products sell well and which wholesalers provide the best service, you can pick and choose the most successful products. If you have any questions for our team about Shopify drop shipping, message us in the chat or contact us.