Drop shipping is a great low risk way to make a side income or even a living selling products online. Rather than buying up inventory, you simply arrange with suppliers in your area to delivery the goods directly to your customers. Often, you pay them a discounted dealer rate, and sell at their recommended price (MRSP or Manufacturer Recommended Selling Price).
Shopify makes this process relatively easy, and has a raft of great features and apps to help you along the way from setting up an optimized store & theme to accepting payments, managing inventory and marketing. Here are 10 basic steps to get started based on our first hand experience. You may also want to scroll to the end of this post to see my 30 minute tutorial video on dropshipping with Shopify in 2019.
STEP #1: Choose a Growing Niche You Like
Whether you choose your passion or something that you are an expert in, you will be immersed in thinking and writing about your niche, so you better like it! You may also start with a more general store which will allow you do test what products sell and what don’t. Just bear in mind, that developing a brand is typically the best long term strategy. Think of closely related products that you can cross-sell easily down the road once you have some buyers. It costs a lot less to cross-sell to existing customers than to bring new ones aboard. E-mail is the best way to do this, since the money is in the list!
Be sure to take a trip over to Google Trends to ensure that your product idea is popular within your country. Also, a good way to look for popular consumer products is to visit AliExpress.com and sort by “Orders”. Also, check out Amazon and find the best sellers category lists (google “Amazon top selling wifi speakers” or similar). And seriously consider buying the Jungle Scout Chrome extension for seeing revenue estimates for various products on Amazon.
STEP #2: Do the Math!
You really need to set your expectations about how much money you will make. Start by doing some realistic projections for year 1. Note, it often takes up to a month to sell your first product. Also know that if you are a dealer for big ticket items, standard dealer discounts range from 15% to 25% off, and you will spend half or more of those margins at first on Facebook/Google marketing, store/website hosting, apps and related services. Be sure to figure in shipping costs into your pricing, since offering free shipping is the standard these days.
STEP #3: Research Dealers in Your Area
Do some online research at least on potential suppliers or manufacturers in your area. You may want to use tools like SaleHoo.com to help find dropshippers and wholesalers in your country. Keep in mind shipping times, and import duties/customs/freight costs associated with importing. Local manufacturers often are better for your profits and your customers who like to buy local. If your manufacturer tells you that shipping is more than 10 days, I’d look elsewhere. Most customers will wait up to a week before calling/e-mailing you and possibly asking for a refund.
IMPORTANT NOTE: Dealers will typically ask to see your online store, so don’t jump the gun here. In the beginning, you have to sell them on your niche or brand of store. They want to see that you are credible and organized and serious about e-commerce. So, see next step!
STEP #4: Create a Logo
OK, so now the first thing you will want to do is create a decent logo. No pressure, but I strongly suggest considering LogoJoy which costs $20 to $65 US (done in a few minutes vs $200 to $300 for a designer from Fiverr that takes typically a week) and has over 1.4 million users (world’s most popular online logo maker). It blew me away at how fast and easy it was, and how it can generate endless variations of logos that get closer and closer to what you want. It uses artificial intelligence to allow you to make a cool and pro looking logo fast and open a store. You can get a web ready logo for $20 US in literally minutes. Looka (formerly LogoJoy) simulates talking to a live designer, and starts by asking you general questions about your brand category and feel. Based on users who have used the service already, it starts to suggest icons, fonts, layouts and colors that are most likely to appeal. You will even get color palette suggestions that you can use in your store theme! Easy peasy.
STEP #5: Create a Store
Choosing e-commerce software can be daunting, but I can save you some time. If you are technically oriented, a developer or just have lots of patience, you can go cheap and try buying hosting at Dreamhost ($97 US per year plus $19 to $39 for an average domain). You can then install WordPress, add a theme, and use WooCommerce and other plugins to get a store like asap.
Alternatively, you can get started quick and easy with a Shopify store and choose their free Debut theme and be up and running in a day. I spent 5 years developing plugins for WordPress, and although it’s cheap and has lots of free themes and plugins, I ended up going with Shopify for my store, just sayin. I always saw that WordPress is like owning a dog, and Shopify is like a cat. Like a puppy, WordPress requires lots of maintenance and walks each day, with core updates that often cause errors/conflicts with plugins and downtime. The upside is they have a huuuge variety of awesome plugins to enhance your e-coommerce store. Shopify, on the other hand, purrs along super easy and fast with hosting provided, and pre-tested apps that won’t crash your site. It also won’t eat your favourite leather shoes while you are out at the movies. 🙂 Yes, if you add lots of Shopify apps, you may double your monthly fees, but more than not they are worth the ROI (Abandoned Cart Recovery, Reviews Apps are key!).
STEP #6: Find A Conversion Optimized Theme
Whichever website platform you use, you really need to have one that offers themes optimized for e-commerce. This means a super slick checkout process that won’t turn away customers with too many pages or fields. Once that has the option to show shipping prices, and connect with the leading payment gateways such as Stripe and Paypal. And really make sure your theme is well optimized for mobile devices. These days, more than half of all purchases on done on tablets or mobile phones, more like 60 to 70% now. Double check this by doing lots of testing. If you load apps with pop-ups for collecting e-mails, be sure to test them also so ensure they don’t corrupt upon loading.
STEP #7: Setup a 1 800 # and Online Chat Function
In order to build trust in your customers, you need to provide them with multiple ways of reaching you or another live person. Many customers need to hear a human voice and make a call to feel confident with your store. With my own outdoor shelter dropship business, I sell high ticket items averaging $1,600 in price. I get a lot of calls prior to people buying. I often get asked about where I am located, where the products ship from and some technical questions on warranty or what is included in each shelter kit. Basically, my goal is to build trust with them and answer questions, and often the phone is the only way to do that. I find this is even more true with seniors. I use RingCentral, and created a vanity number for my business which I think helps with branding (in my case, the last 7 digits were “GET GRIZ” since my dropship business is Grizzly Shelter).
From an efficiency standpoint, I prefer online chat and highly recommend Tidio. More than 50% of people prefer chat actually vs the time required for a phone call. People also like being able to multi-task during an online chat session. Chat is great for sharing links, e-mails or even photos quickly. It is a must have for Millennials too who spend lots of time on their mobile phones.
STEP #8: Get Dealers to Review/Approve Your Website
OK, so by now you have a logo, theme and storefront setup. Your next step is to formally apply to become a dealer or reseller of some products. You should now preload some products that fit within your niche in order to demonstrate your storefront to prospective suppliers.
That said, reloading products can be a bit like the chicken and the egg scenario, or your first kiss… a little awkward. However, this shows vendors that you are serious about promoting their products. Loading products and prices will also help you sort out any display bugs that may arise with your theme. If needed, you can always some example products from AliExpress or even Alibaba to get started with.
STEP #9: Go APP or Plugin Shopping!
OK, so if you went with WordPress WooCommerce or Shopify, then you will have lots of choice for loading plugins or apps. I am just going to suggest to you what kind of apps or plugins you need, and mostly leave it to you to read reviews and pricing to make up your own mind.
- Reviews – Social proof is key to building trust, so look for review apps with widgets that show reviews near the top of product pages
- Purchase Activity – show sales using pop-up notifications with a product image and customer details to really build credibility
- Abandoned Carts – this is the low-hanging fruit of e-commerce, and should NOT be ignored! 80% or more of carts are abandoned, but before they do, you have an e-mail address already, so use it! Send 3 e-mails after 1 hour, 10 hours and 1 day delay with a time-limited coupon (creates urgency!) that expires in 48 hours, (via App, WordPress plugin or in Shopify admin) and I guarantee you, you will double your cart recovery and add revenue!
- E-mail – Shopify & WordPress WooCommerce integrate really well with MailChimp for e-mail marketing, and you get up to 2,000 e-mail subscribers free! Many apps will work with your abandoned cart sequence too as mentioned above.
- Exit Pop-ups – great for collecting e-mails for newsletters. Be sure to offer a carrot to sign-up… not an actual “carrot”, just like 10% off!
- Upsells and Cross Sells – when your customer has already added a product to their cart or directly to checkout, you add an upsell to sell more of that product or a better quality premium version. Conversion rates for well chosen upsells, for example, average 10%! Promoting a cross sell is when you suggest a related product that fits with their original purchase product. Cross selling has slightly lower conversion rates than upsells do, but still are well worth the effort!
- Google Shopping Feed – if you want your product on Google Shopping, then you need a Google Merchant account, and use an App to convert your store into a feed that Google can understand
- Referral Program – ah, hem… try our Shopify App Gravy!
STEP #10: Social Media Silly!
OK, so if you haven’t already, you really should start a good blog around your niche. Not only are article ideal for posting to social media to build trust, but they are also excellent food for search engines to rank you higher. Try to write at least 500 words, since Google crawlers look for that! Also, people love lists… 12 Easy Ways To Improve Your Sleep! You get the idea.
Also, it goes without saying these days that you should at least create Facebook and Instagram Accounts for your brand. Even Twitter may help (but I personally don’t see it as a priority). Then, you really should try to grow some Likes and Followers with pay-per-click ads on Facebook and Instagram. And especially if you sell high ticket items, being on the Google Shopping Network is gold. Pinterest is great for fashion, jewelry and other personal highly visual niche items.
Oh yes, and to help you avoid breaking the bank on buying ads, do setup referral marketing for your store. Yup, OK, here comes the sell… If you happen to be using Shopify, we suggest using our referral marketing app Gravy! 🙂 This can easily grow your sales by 15% to 25% via free word of mouth marketing by your own customers. Stop spending hundreds or thousands of dollars to Google and Facebook by paying per click, and try paying per sale. You’ll be happy you did! 🙂