I’ll Show You How To Dropship on Shopify in 2024: 5 Easy Steps

Unsure if you want to dropship on Shopify? Here are the key pros and cons to consider beforehand:

You might be eager to begin, but there are a few factors that you need consider before diving into dropshipping on Shopify. Let’s review them now:

Factor #1: What’s your online store’s niche?

You’re not going to be the only person dropshipping on Shopify, so how do you stand out in a saturated market? Well, you need to find your niche online, which will help you differentiate yourself from your competitors and attract more customers to your store. Here are my top tips for discovering your dropshipping niche:

• Have you researched the market? – You’ll want to sell products that your target audiences are interested in, so conduct market research beforehand to make sure people are searching for products like yours. I recommend keyword research, since it’ll help you see what products customers are looking for on search engines like Google.
• What is the competition doing? – To provide your customers with a brilliant product, you need to learn from what other brands are doing. Take note of their strengths and weaknesses. What do their customers enjoy? And what could they be doing better?
• Is your niche profitable? – Think about your ecommerce product margins when choosing products to sell. Once you’ve marked up a product, will you be making a large enough profit to sustain your business long term?
• Are you passionate about your product? – Most of all, find a product that you’re genuinely interested in. If it doesn’t excite you, you’ll find it much harder to keep the momentum of your dropshipping business going, and customers might pick up on this lack of enthusiasm too!

Factor #2: Have you worked out your budget?

Though dropshipping is one of the cheapest ways to break into ecommerce (you won’t be dealing with initial storage costs), there are still some costs to consider that could build up overtime:

• Your Shopify subscription – Shopify’s pricing plans vary from $29 to $299 per month (billed annually). There’s no free plan, so you will need to make these regular payments to set up and sell online. Shopify’s three main plans allow you to set up dropshipping, but you will need to assess each plan separately to see which one is the best fit for your business.
• Dropshipping apps – If you decide to use a dropshipping app from Shopify’s App Store, you may encounter monthly costs. For instance, DSers, an Alibaba dropshipping app, can cost between $190.08 and $4,788 per year depending on your plan.
• Transaction fees – Each time a customer buys a product, Shopify will take a small percentage of the final sale. This cost will vary based on the plan you’re on. For instance, Shopify takes 2.9% + $0.30 per transaction on the Basic plan, but 2.7% + $0.30 per transaction on the Shopify plan.
• Return costs – A potential downside to dropshipping is managing returns and their costs, which can build up over time if not addressed properly. Remember to check the returns policy of third-party dropshipping suppliers before committing to one.

Having an idea of the amount you’re willing to spend will make choosing a Shopify plan and dropshipping supplier a little easier. It’ll also make you less likely to overspend, which can put a bit of a downer on your dropshipping profit margins.

Factor #3: Is your business legal?

If you’re dropshipping on Shopify, you’re officially starting a business – so you need to do your paperwork and make sure that you’re fulfilling any legal requirements. This includes: 

1. Local requirements – Look up the legal business requirements in your local area. They’ll vary from state to state, so make sure that you understand the core steps you’ll need to follow when running your business.
2. Business structure – Every company in the United States has a business structure attached to it, determining what business category and legal jurisdiction it falls under. Research these structures, like Sole Proprietorship and Limited Liability Company (LLC), to find the one that fits your business most accurately.
3. Employment Identification Number (EIN) – having an EIN will enable you to pay your taxes, keep your personal and business finances separate, and work with a wider range of dropshipping suppliers. You can apply for one through the IRS website.
4. Register your business – This will prevent other companies from copying your business name, so make sure that you’re registered. The process of registering will vary from state to state.

Got these three factors sorted? It’s time to dive in and create your own Shopify account.

Creating a Shopify account only takes a few minutes, but you’ll need to fill in some important details along the way. As I set up, Shopify asked me:

1. If I were a new business, or already selling online or in person
2. Where I’d like to sell from (I could select all suitable answers, such as an online store, social media, or online marketplaces)
3. What kind of products I’m selling
4. Where my business is located

When Shopify asked me what kind of products I sell, I clicked on the “Dropshipping products” response – make sure you click on this option too! Source: Website Builder Guide

Once I’d entered those key details, I could proceed with setting up my Shopify account. You can sign up with your business email, or go through Apple, Facebook, or Google.

After a swift loading screen, I was redirected to my personalized dashboard, which was tailored to my responses. This dashboard will be the launch pad for starting your new online store.

Be aware that your trial period only lasts three days. To continue using Shopify, you’ll need to click on the “Select a plan” button to make your purchase. However, you can redeem an introductory offer that gives you your first month for $1. 

From my dashboard, I clicked on the “Customize your online store” checklist task and selected the “Customize theme” button. To browse the different themes that Shopify had available, I scrolled to the bottom of the page and clicked on “Visit theme store”.

At the time of writing, there were approximately 215 themes to choose from in Shopify’s theme library, though only 13 of them were free. This isn’t great if you want to save some costs in this area, since you’ll get better customization and features with the paid themes, which can range from $100-$500 with a one time purchase. However, all of the themes are sleek, responsive, and optimized for mobile. 

Once I’d found a theme I wanted, I clicked “Try theme”, which automatically installed the design and redirected me back to my dashboard. All I had to do next was click the “Customize” button to give it a spin.

From the website editor, I started customizing my store’s theme. I used the design options in the left-hand sidebar to:

1. Tweak the website color palette
2. Select fonts
3. Add a logo
4. Adjust the spacing on each page

Overall, I didn’t find it difficult to change these aspects of my website’s design. In fact, this lines up with our in-house testing where we found Shopify very easy to use. 

Unlike other popular website builders like Wix or Squarespace, Shopify doesn’t have a drag-and-drop editor. Instead, your design is split into different sections, which you can stack on top of each other.

Once you’re happy with the way your Shopify store looks, it’s time to press the “Save” button and move onto the most important step of all: setting up your dropshipping.

Presently, there are three ways you can set up dropshipping on your shopify store:

1. Downloading a dropshipping app from the Shopify App Store
2. Partnering directly with a supplier
3. Adding items from Shopify Collective

Below, I’ll show you how to dropship on Shopify with each of these methods.

Using a Dropshipping App

Downloading an app is the easiest and speediest way to start dropshipping on Shopify.

To begin, I went to the Shopify App store, typed “Dropshipping” into the search bar, and looked at the results. There was an overwhelming number of options to choose from, so I’ve narrowed down the best results for you:

Alongside these dropshipping apps, you may want to download other Shopify apps to grow your store and boost your sales. For instance, you might want to allow customers to leave product reviews, which you can use as social proof to help boost your conversions. The video below delves into a few examples that you may be interested in:

Play

After choosing an app from the App Store (in my case, I downloaded Spocket), I clicked on the “Install” button. This installed the app and redirected me to another page where I could get set up.

With Spocket, I had to answer a few questions about the products I wanted to sell, including what regions I wanted to sell in and where I wanted to source my products from. However, I couldn’t browse Spocket’s products without signing up to one of its pricing plans first, and it did ask for my card information to start with.

Once you’ve chosen a dropshipping app, you’ll be able to import items into Shopify. Additionally, all product details and imagery will be automatically filled, so you don’t have to worry about manually adding these details yourself.

Working Directly With a Supplier

If you don’t want to dropship through a Shopify app and want a little more control over who you partner with, you also have the option to work directly with a dropshipping supplier. You can find these suppliers online, through trade shows, or by browsing supplier directories.

This method will involve plenty of research, since you’ll need to look for quality suppliers that you can rely on. As a general rule of thumb, look for these qualities in a supplier:

1. High quality products – When reaching out to a supplier, I recommend ordering a sample product first. This enables you to gauge the quality of their items and see if they’re a good fit for your store and customers.
2. Convenient warehouse location – Think about your target customers and where they’re located. For instance, if you’re selling in the US, your customers will receive their orders much faster if your supplier is also in the US.
3. Reliable shipping times – As a shipping best practice, you don’t want to leave your customers waiting around for too long. Make sure that your supplier can ship their products to your customers within your desired time frame.

Once you’ve found a supplier you’re interested in, it’s time to reach out to them. Remember to ask them important questions about their services, such as their estimated delivery times, or whether they have a robust tracking system in place.

Using Shopify Collective

If you’re already selling some products but want to expand your inventory, you can also use Shopify Collective to sell items from other stores. 

This free feature, which was launched in 2023, allows you to connect with Shopify’s network and browse its supplier catalogs. Once you’ve found some items, the Collective will ship them to your customers for you, as well as distribute the money made between you and your supplier.

Do note, however, that you can only use this method if you fulfil specific criteria:

• Your store is US-based and trades in US dollars
• You use Shopify Payments
• You’ve made at least $50,000 in the last 12 months
• You’re active on the Shop app and meet the Shop Merchant Guidelines

I signed up for this feature through the Shopify Collective page. I had to log into my Shopify account and select the store I wanted to integrate with Shopify Collective. Afterward, Shopify added me to a waitlist, and told me that they’d email me when a spot opens up.

If Shopify approves your application, you’ll be able browse supplier products and discover new partners to work with.

Once you’ve selected your dropshipping supplier and found your products, you’ll need to get ready to take customer payments online. Shopify does keep this process simple, and I could add different payment methods – there were over 100 payment options to choose from.

To streamline your payments, I recommend opting for Shopify Payments, the platform’s native payment processor. This feature simplifies the process for you, allowing you to set up numerous payment methods, such as Visa, Discover, Apple Pay, and Google Pay to name a few.

To set up Shopify Payments, I went to my dashboard, clicked on “Settings” in the bottom left corner of the screen, and selected “Payments.”

Next, I selected “Complete account setup” and had to submit key details about my business and turn on two-step verification. Once you’ve done this, it takes around three days for Shopify to verify your application.

With payment settings sorted, it’s time to organize your store’s shipping. Though dropshipping means you won’t have to worry about the packaging or shipping of your products, you still need to set your own shipping rules.

If you’re not sure where to begin, I suggest looking at your dropshipping suppliers for guidance. When you browse through their product listings, you should be able to find info on its shipping requirements, including where your supplier will ship to, how much it costs, and how long it’ll take.

Once you have a good understanding of these guidelines, head to your Shopify dashboard to set your store’s shipping rules. To do this, I clicked on the “Settings” menu and selected “Shipping and delivery” from the navigation bar. This is where you can get started.

The main task you need to complete is double checking your shipping zones. Make sure that the locations your suppliers are shipping from are listed accurately. You’ll also want to ensure that the different shipping costs are accurate for each location or zone.

Once you’ve tweaked your shipping rules from your dashboard, you’re ready to start selling your dropshipped products!

So you now know how to dropship on Shopify, but what are your next steps? Well, I recommend keeping an eye on your store’s progress through Shopify’s analytics, since the work isn’t over yet. 

As your dropshipping business progresses, you’ll want to assess key metrics from your Shopify dashboard, such as your total sales over time and your conversion rate. This will help you gauge what your store is currently doing well, as well as any problem areas you need to address.

Lastly, my takeaway dropshipping tip is to remember to maintain a positive relationship with the dropshippers you’re working with. After all, your sales rely on their products and shipment, so communicate with their representatives clearly and try to address any problems as soon as possible.