Shopify Dropshipping 2023 Ultimate Guide

Do you want to earn financial freedom through passive income?

I have the solution for you: Shopify dropshipping.

A dropshipping business on Shopify is a low-risk, low-capital idea that lets you sell online without handling inventory and fulfilling orders.

How do you start a dropshipping business?

In this guide, I will teach you how to dropship on Shopify, find winning dropship products, and run your own online store successfully.

Let’s begin.

What Is Shopify Dropshipping?

First, I will discuss the dropshipping business model.

Dropshipping involves three aspects:

• The customer

• You, the seller

• The supplier

Dropshippers act as the middleman between the customer and the supplier. 

Your role is to promote the products, manage your own store, and provide customer support. Meanwhile, the supplier handles everything from product procurement to delivery.

This means you do not have to buy products, manage inventory, and pack orders.

In general, the costs for dropshipping are low, which is one of the main reasons why people choose to dropship.

How Does Shopify Dropshipping Work?

Now, how does dropshipping work on Shopify?

It works the same way, but you will use the Shopify platform to start selling online.

Once your online store goes live, this is how the process usually goes:

1. A customer purchases products from your store.

2. You forward the customer’s order details to your supplier. 

3. Your supplier prepares the order, packs it, and ships it directly to the customer’s address.

4. The customer receives their order.

How To Dropship With Shopify: Step-by-Step Shopify Dropshipping Guide

Are you interested in becoming one of the thousands of Shopify dropshippers around the world?

Follow these comprehensive steps on how to start dropshipping on Shopify. 

1. Create an Account and Sign up for Shopify’s Free Trial.

If you want to test the water before signing up for a paid subscription, a 14-day free trial of Shopify is available.

1- To sign up for Shopify, click Start free trial on the top right or bottom left of the screen.

2- Next, click the options that best describe your business.

3- Click the box next to Dropshipping products.

4- Choose your business location to set up your default shipping rates, recommended dropshipping apps, etc.

5- Create a Shopify ID and start your free trial by clicking any of these four options.

After the free trial period, your Shopify account will automatically become a paid plan.

The Basic Plan includes two staff accounts and simple reports, whereas the most expensive Advanced Plan features a custom report builder and up to 15 staff accounts.

2. Determine the Product You Want To Sell.

Although the ecommerce market is competitive, you can give your store some leverage if you choose the right niche. You must perform market research to find what products are in demand and which ones can help you stand out.

Use channels and tools like social media, Google Trends, and Google Search to identify what to sell on Shopify dropshipping. You can also look at other Shopify dropshipping stores and see what products are doing well for them.

Choosing products that align with your hobbies or interests is also ideal. That way, your passion can give you the momentum to keep going during challenging times.

These are some popular dropshipping products that you may want to consider.

• Child and baby clothes

• Adult apparel

• Home goods

• Office supplies

• Pet supplies

• Electronics

• Home decor

• Stationary

• Accessories

• Drinkware

10 Criteria of a Winning Dropshipping Product

Here are the most critical factors to consider when choosing your Shopify dropshipping products.

1. High demand

2. Excellent profit margin

3. Relatively low competition 

4. Related to your niche

5. High quality 

6. Excellent customer reviews

7. Non-seasonal products 

8. Unique or hard to find (normal retail stores don’t carry these products)

9. Shorter shipping time 

10. Right product size

If you’re dropshipping from China or Hong Kong, consider sticking to products that are small enough to fit into the ePacket box. 

ePacket shipping is a service agreement between the United States Postal Service (USPS), eBay China, and Hong Kong Post. It aims to reduce shipping times drastically from China and Hong Kong to the US. 

The Best Product Research Tools

To help you with product research, consider using tools. Here’s an overview of some of the best I’ve found.

3. Find Dropshipping Suppliers for Your Products. 

When you find a product you want to sell, your next step is to find a dropshipping supplier that offers it.

Here are some ways you can find the best dropshipping suppliers.

• Conduct a basic internet search. 

• Check dropshipping supplier directories like AliExpress, SaleHoo, Oberlo, Sprocket, Printful, and Global Sources.

• Attend trade shows and conferences. 

• Contact manufacturers directly.

Characteristics of a Good Dropshipping Supplier

Your Shopify dropshipping suppliers can make or break your business. That’s why you must be extra picky and rigorous when choosing companies that provide you with the products. 

These are the most crucial characteristics when looking for a dropshipping supplier.

• They create high-quality products consistently. 

• They offer fast shipping services. 

• Their return policies are in line with your business. 

• Their per-order fees and pricing plans are reasonable, allowing you to enjoy a decent profit margin. 

• They have excellent customer service. 

• They offer multiple ecommerce integrations to support dropshipping Shopify stores and other platforms. 

• They offer customized packaging. 

• Ideally, your Shopify dropshipping supplier is near your target audience (i.e., local dropshipping) to enjoy cheaper and faster shipping.

Best Dropshipping Suppliers

4. Set Up Your Shopify Store.

Follow this quick guide on how to set up dropshipping on Shopify.

Name Your Shopify Dropshipping Website.

This is the first step toward opening your dropshipping store. As a general rule, choose a unique, simple, and memorable name. 

Shopify has a free tool called Business Name Generator to help you come up with creative name ideas. Simply enter any word related to your business and click Generate names.

The tool presents a list of recommended business names for your store. However, you must check whether other companies have already used the suggested names. 

You can check the availability of store name ideas through Google search. If you see there’s a .com domain attached to them, it means other businesses are already using them. 

Connect Your Domain Name.

Your online store’s domain is the URL (or website address) where your customers find it.

You can either purchase a new domain from Shopify or a third-party provider (e.g., Bluehost and Hostgator) or transfer an existing one. 

If you already have an existing domain and want to transfer it to the Shopify ecommerce platform, follow this guideline.

• Connect your domain to Shopify before you transfer it. Otherwise, your visitors may experience connection errors during the transfer process. 

• Unlock your domain and request a transfer authorization code from your provider. 

• Keep a copy of any domain records you may need to configure your domain after the transfer. 

• Start the domain transfer process by clicking Settings > Domains > Transfer domain > Next > Verify domain.

If you see a message that says DOMAIN UNLOCKED, click Next to continue.

On the other hand, follow these steps if you see DOMAIN LOCKED: 

In the Verification code dialog, enter the EPP code or authorization code. Then, click Next > Auto-renew this domain every year > Buy and transfer. 

Check your email associated with your domain. Next, click the link that says Confirm Transfer or Approve Transfer.

Create Your Shopify Dropshipping Store Logo.

Shopify has a free logo creator called Hatchful that offers hundreds of templates, fonts, colors, graphics, icons, and layouts. 

To get started, visit hatchful.shopify.com and click Get Started. Next, choose your business category and the logo style from the list of suggestions (e.g., friendly, modern, reliable, etc.). 

Lastly, add your dropshipping business name and slogan (if you have one). 

Choose a Theme for Your Online Store.

The Shopify app store has thousands of free and paid themes you can use for your Shopify business. Many of them are specifically designed for online stores and various niches..

If you want to try a free theme first, here’s how to choose the right one for you:

1. From your Shopify dashboard, go to Online Store.

2. Click Themes > Popular free themes > and Visit theme store.

3. Browse all available themes and tap the Add button to add it to the Theme library section of your page admin. 

You can also use, preview, and customize paid themes in your Shopify account. The admin page will save any changes when you purchase a theme. 

Follow this guide if you want to use a paid theme for your Shopify store: 

1. Navigate to the Shopify Theme Store.

2. Click Try Theme next to your desired theme.

3. In your Admin page, select Online Store > Themes > Theme Library > … (three-dotted button) > Preview. 

Customize Your Shopify Store Homepage.

You don’t need coding and advanced design skills to customize the homepage of your Shopify dropshipping store. The platform has a user-friendly theme editor that lets you customize the look and feel of your online store.

Additionally, you can use tools and Shopify dropshipping apps (free or paid) to improve the overall customer experience.

Here are some ideas for your online business:

• Shopify app embeds to add more sections

• Theme settings to make your homepage in line with your brand 

• Templates to create a polished and professional-looking dropshipping store

• Hatchful.com to create your logo

Optimize Your Settings.

You need to set up and optimize your newly created Shopify account to receive money from your customers, avoid potential issues with the use of comprehensive store policies, and offer different shipping services. 

• Shopify Store Currency
  Your store currency should reflect your target audience. For example, you must use USD if you’re selling to US customers. However, set your currency to Auto Multi-Currency Converter if you wish to reach a global audience.

• Payment
  To add this information, click the Payments tab on the left and add your payment details. Although Shopify accepts multiple payment gateways, make sure always to include PayPal. 

• Shipping Rates
  Your online store must have clear shipping fees and offer free shipping, which you can do by increasing the product’s price. Posting a FREE SHIPPING label is a great way to catch people’s attention. 

• Store Policies
  Shopify has tools to help you generate standardized privacy policies, terms and conditions, and refund policies. You can access them by clicking Settings and Checkout. Next, scroll down to the bottom and select the relevant fields.

• Product Description
  To write an effective product description, make sure you know your audience, consider SEO and keywords, answer important questions, use quality photos and videos, and focus on benefits and features.
  You can also browse product description templates to get some ideas.

5. Import Products to Your Shopify Store and Optimize Your Listings.

You can learn how to add dropship products to Shopify manually. All you have to do is customize your online store to include product pages and then create one for each of your products.

This can be time-consuming, but I will teach you a way to automate this process. 

Follow this guide on how to add dropshipping products to Shopify and optimize your listings for better conversations.

Automate Your Dropshipping System.

You can manually list or import products using integrations like AutoDS or Sellthetrend. These tools automate your entire order fulfillment process, allowing you to save more time.

If your Shopify dropshipping business uses Gelato and other similar print-on-demand solutions, your printing partners will do the entire order fulfillment process, from keeping inventory and printing to packaging and shipping. 

Optimize Your Listings for Conversion.

You must create high-quality Shopify product pages that can convert visitors into customers. To do this, you must create a simplified but organized site structure, add relevant keywords to your content, and use high-quality images. 

Also, write easy-to-understand meta descriptions to encourage shoppers to click through your site. 

Keywords are the foundation of successful SEO, which is the practice of helping your website rank high on a search engine results page and drive traffic to your ecommerce store. 

You can use free and paid keyword search tools online to determine what words and phrases your target customers use to find products. 

6. Market Your Dropshipping Store.

Before you can effectively promote your Shopify dropshipping store, you need to understand your target audience, what ticks them, and where they hang out online. That way, your content and marketing platforms deliver great conversions.  

Influencer Marketing

Contrary to popular belief, influencer marketing is not exclusive to big businesses. It can even be an affordable way to reach your target audience, especially if you negotiate an affiliate fee rather than a flat rate. 

The best social media platforms for influencer marketing are Instagram and TikTok. 

Paid Ads (Google and Facebook)

Although there is stiff competition with Google ads, they’re still worth considering. As long as they are well-written and optimized, they can help your Shopify dropshipping business generate higher sales and more traffic. 

Meanwhile, Facebook ads are effective in targeting your demographics and lookalike audiences. They also allow you to retarget users who already interacted with your page or website. 

Content Marketing

If you want to build a sustainable, long-term stream of traffic for your Shopify dropshipping store, focus on your content marketing strategy. To do this, you can write blogs, post infographics on social media, or create a podcast. 

Communities

Create communities on Facebook, Reddit, and other online platforms to interact with potential customers. However, don’t use a high-pressure, salesy approach because it makes people uncomfortable. 

You have to use online communities and forums as a channel where you provide valuable and informative content to your members to create trust and brand loyalty. 

Email Marketing

Email marketing is a direct digital marketing approach that can help you create long-lasting customer relationships and promote loyalty and repeat purchases. 

This marketing tool contains personalized content such as product recommendations, promotional offers, and newsletters. 

Mobile Marketing

Mobile marketing is a broad term that refers to any marketing tactics targeting mobile phone users. For example, brands use a VIP text group to encourage site visitors to sign up for promotions and discounts. 

Other common mobile marketing strategies include social media marketing, mobile video ads, and mobile search ads.

SEO Strategy 

Your dropshipping store needs to match the visitors’ intent to rank high in search results. This is where search engine optimization, or SEO, comes into play. 

Optimizing your dropshipping store is about understanding how search engines like Google, Bing, and Yahoo work and how people searching online use them. 

Marketplaces 

Consider using marketplaces like Amazon, eBay, Etsy, and Ruby Lane to promote your dropshipping business and expand your market reach. Meanwhile, Redbubble and Gelato are great platforms for selling print-on-demand products.

7. Choose the Right Shopify Paid Plan.

Shopify has different paid subscriptions: Basic, Shopify, and Advanced. All the paid plans let users promote and sell products on multiple sales channels and use a POS system with inventory tracking and staff management. 

The right plan depends on the features your dropshipping business needs, budget, and number of account users. 

• Basic ($25 per month)

This plan is ideal for side hustlers who need basic features to store and ship products and manage bills and payments. 

• Shopify ($65 per month)

This plan is ideal for small businesses and Shopify store owners who need professional reporting and multiple staff accounts. 

• Advanced ($399 per month)

If you have a medium to large dropshipping business, this plan perfectly fits your store because it offers custom reporting and discounted transaction fees. 

Meanwhile, the platform also offers alternative plans like Starter and Shopify Plus. 

• Starter ($5 per month)

You can sell products through social media and messaging apps with this plan.

• Shopify Plus ($2,000+ per month)

This plan is an excellent option if your business deals with a large daily sales volume. If you’re an established brick-and-mortar retailer, it often takes three to four months for Shopify Plus to shift your company to online selling. 

When comparing Shopify and Shopify Plus, the transition will take up to 12 months if your brick-and-mortar business uses a plan other than Shopify Plus.

8. Optimize and Scale Your Business.

Once your Shopify dropshipping business is up and running, you must continuously optimize your store by reviewing customer feedback, finance reports, traffic, best-selling products, and ad reports. 

You must also analyze these factors to maintain competitiveness and relevance to your target audience’s needs. 

• Sales 

• Profit margins

• Shopper behavior 

The business landscape and consumer sentiment are constantly changing. For this reason, it’s important to keep yourself up-to-date with current news and best practices and use third-party tools for email and social media reporting. 

Focus on Winning Products.

Your Shopify dropshipping store should constantly adapt to the ever-changing needs of customers.

To learn their preferences, you must review your monthly sales and profit, operating costs, and other key factors. That way, you can identify and focus on your winning product/s.

In a nutshell, a winning product generates impressive sales and a decent profit margin. In certain instances, it also encourages customers to purchase additional or complementary items from your online store.

By contrast, you need to eliminate a product that is simply absorbing resources with little to no return. 

Focus on Winning Sales Channels.

You must constantly review your channel metrics, such as clicks, impressions, bounce rate, engagement, reach, and conversion rate. Make sure your goals and metrics are in line with your marketing strategies and goals.

By identifying your winning channels, you can focus on those that generate the highest returns and eliminate those with poor conversions and huge costs. 

Improve Your Storefront.

One effective way to improve your storefront is to gather customer feedback and do a follow-up to let them know you are listening. 

These are the valid reasons to change or tweak your Shopify dropshipping store:

• To optimize your site to accommodate mobile users

• To stay up-to-date with trends

• To add trust signals and badges

• To include positive customer feedback and reviews

• To match your brand identity with your Shopify dropshipping store

• To simplify your store’s checkout

• To improve the site speed

• To improve storefront design, listings, and other elements

No seller should change their storefront out of whim, lest they confuse visitors or end up with a site that fails to deliver an excellent buying experience.

Work with Multiple Suppliers.

One way to make your Shopify dropshipping business successful is to work with multiple suppliers rather than rely on just one. That way, your story can carry a broader range of products.

With a diverse product range, you can identify winning products and replace poor-performing items. 

Working with multiple suppliers also means you don’t over-rely on one source, which reduces the risk of stock running out. Additionally, you can negotiate better pricing and terms, leading to better profit margins. 

Cross-Sell and Upsell To Boost Sales.

Use cross-sell and upsell strategies to improve your sales. One way to do that is to use a Shopify dropshipping app specifically designed for this purpose.

You can install plugins that encourage shoppers to buy more products, related items, or their more expensive versions for your Shopify dropshipping store. 

These plugins automate your upselling and cross-selling strategies and track their performance on your Shopify store. As a result, you can enjoy a better profit margin and higher revenue by selling multiple items to the same customer. 

Additionally, these apps can promote customer loyalty and retention.

Start Outsourcing and Building a Team.

The more tasks you outsource, the more time you can focus on business growth. This is especially true when dealing with manual and time-consuming functions like customer service. 

Successful ecommerce entrepreneurs know the importance of providing their shoppers a smooth experience even after making a purchase. That way, they can demonstrate that they value their customers.

Aside from customer service reps, you can also outsource marketing specialists, virtual assistants, graphic designers, and content creators to help you scale your ecommerce business faster. 

Know Your Numbers.

Becoming knowledgeable in accounting can help you meet the financial requirements of your Shopify dropshipping store.

Accounting can also help you understand the financial strength of your dropshipping business and avoid costly tax errors. 

If you’re still getting your dropshipping business off the ground, chances are you won’t have an accountant to handle your finances. Thus, you must learn to compute your profit margin and costs and organize your finances.

What Are the Pros and Cons of Dropshipping on Shopify?

Read the pros and cons of the dropshipping business model to determine if this is right for you. 

Pros

• Great for testing products before buying inventory

• No need to purchase products upfront

• No need for managing inventory

• No associated inventory costs

• Easy and quick to open an online store

Cons

• Little to no control over the shipping times, package design, product quality, etc. 

• Lower profit margin 

• Complicated refund and return process

• Complicated customer service 

• Tough competition

Frequently Asked Questions (FAQs)

Does Shopify Do Drop Shipping?

Yes, you can use Shopify fr dropshipping. However, you must integrate your supplier’s platform first for automated fulfillment and inventory management.

Is Shopify Good for Dropshipping?

Yes. Shopify is an economical ecommerce platform and dropshipping app for small businesses and startups, thanks to its free trial and affordable website plans. 

Do You Need Money To Start Dropshipping?

Not really. It’s possible to start your own dropshipping business with little to no money, especially if you choose suppliers without subscription costs.

How Do I Succeed With Shopify Dropshipping?

Although dropshipping on Shopify is tough due to the competition, you can increase your success if you establish a niche, understand your audience, partner with reputable suppliers, and conduct effective marketing strategies.  

Is Dropshipping with Shopify Still Profitable in 2023?

Yes, definitely! The dropshipping industry is worth $197 billion, a 53% increase from 2020. Experts also suggest it may reach the $500 billion valuation by as early as 2027. 

What Is the Cheapest Way To Dropship?

There are many ways to start dropshipping on a budget. One of the most popular ways is to use free dropshipping sites or directories to browse products and suppliers. Also, subscribe to the most affordable paid plan that meets your needs.

Is There a Free Way To Dropship?

Yes. Many ecommerce platforms offer a free trial to test the water before you sign up for a paid subscription. You can also choose suppliers that only charge you for the product cost and waive additional shipping costs and fees. 

How To Run Dropshipping Websites Through Shopify?

Here’s how to use Shopify for dropshipping:

• Sign up for a Shopify account.

• Install a dropshipping app.

• Import dropship products into your store.

• Optimize product descriptions and pricing.

• Optimize product pages with high-quality images and tags.

The Bottom Line

Shopify, which is arguably the leading ecommerce platform, makes running a successful dropshipping business easier.

If you want to run a profitable online store, you must build a solid foundation of high-quality products, well-designed website, and a reliable supplier.

However, the competition is fierce, so you must stay current with market trends and continuously improve your online store.