The share of e-commerce in total U.S. retail sales in the first quarter of 2019 has reached 10.5%. That’s a 6.3% increase compared to the first quarter of 2010. The total amount of money that U.S. consumers are expected to spend online should reach over 740 billion dollars in 2023.
It means that e-commerce is likely to replace traditional retail operations almost entirely in the not so distant future. These days, an increasing number of businesses and individual entrepreneurs conduct transactions via online storefronts using the dropshipping retail fulfillment method and various e-commerce platforms.
What is dropshipping, why is it so popular, and why is Shopify the best e-commerce solution for building dropshipping online stores? Find the answers below.
Dropshipping — Business for the Masses
What Is Dropshipping?
Consider the traditional business model of selling physical products. A retailer buys goods from a manufacturer, stores them in a warehouse, and then sells them to customers through brick-and-mortar retail outlets.
The dropshipping model works differently. Instead of storing goods in a warehouse, a dropshipping company purchases the items a customer wants from a third-party supplier and has them delivered to the customer’s location through the same supplier or a delivery company.
As such, a dropshipping business only accepts orders via its online storefront and arranges the shipment of goods to customers’ addresses. The warehousing stage is missing. Here’s what the workflow looks like in a nutshell:
Dropshipping is not a new concept. Many big, well-established companies have been using it for a long time. Amazon is probably one of the most notable examples.
How much can dropshippers make? It depends on the niche. If you’re selling items of mass consumption such as T-shirts or shoes, don’t expect large profits because of fierce competition. On the other hand, when offering expensive merchandise like jewelry or brand watches, dropshippers’ profit margin can reach as much as 100%.
Benefits of Dropshipping
The popularity of dropshipping is growing by the hour, and for a good reason. Here’s why we can call it a retail fulfillment method for the masses.
Almost No Upfront Expenses
Dropshipping means no need to purchase goods. Therefore, a business owner only has to cover the hosting expenses for the online store and pay for additional web development services like themes, apps, and so on.
Immediate Start
This is a very straightforward business. Dropshippers don’t have to go through the routine of conventional retailers: running a warehouse, preparing goods for shipment, ensuring that the stock is full, and performing other “old school” retailer’s tasks.
All they need to do is strike a deal with a reliable shipper, pick an affordable and efficient e-commerce platform, fill the website with the information about items for sale, and begin accepting orders. This may take just a few weeks.
No Fixed Business Location
With dropshipping, you’re not limited in space. You can easily combine traveling with business. In essence, there are only two things you need:
- A laptop
- Internet access
A Wide Assortment of Goods
Dropshippers can offer any products to their customers as long as they can find appropriate suppliers for them. A dropshipping business may focus on one particular niche, such as sportswear or on a variety of different products. Sell children’s toys along with books, building materials, and electronics. Why not?
Make Your Business Bigger Whenever You Need
Every business wants to grow, naturally. Traditional retailers often struggle with expanding their operations. More manpower, more money to invest, and more space in the available warehouses or new warehouses to rent.
Dropshipping makes this all unnecessary. New orders are simply forwarded to a supplier for processing. A dropshipper may only have to spend more time on customer service. The supplier takes care of the nitty-gritty of order-handling.
One of the most important aspects of the dropshipping business is choosing the right e-commerce system. According to Statista, the largest market share among e-commerce software platforms in the United States in 2019 belongs to Shopify. Here are 6 arguments why you should choose this platform for your dropshipping store.
Shopify, the Best E-Commerce Platform for Dropshipping
Statista: Projected market share of e-commerce software platforms in the United States in 2019
Reason #1: No Advanced Technical Skills Required. Good for Beginners
Shopify is a SaaS (Sofware as a Service) solution. It’s hosted in the cloud and maintained by the Shopify development team. There’s no need to watch out for updates. Just focus on the store itself and let the vendor take care of all the technical aspects. You only need to pay a monthly fee.
Shopify is especially good for small companies and individual entrepreneurs who want to start their online stores quickly without having to slog through the details of the CMS. The dashboard is easy-to-use and intuitive. When adding a new item, you can specify all of its attributes (price, quantity, and so on) in one central location. Very convenient.
Reasons # 2: A Multitude of Apps to Complement a Store’s Functionality
The Shopify App Store contains over 3,381 items at the moment of writing this post. These applications help online store owners get closer to their customers via a live chat, keep their bookkeeping records neat, automate marketing campaigns, and address other important issues.
Among those 3,300+, you can find around 150 specialized dropshipping apps, both free and commercial. For example, Oberlo facilitates finding products to sell on Shopify. All these apps are valuable time-saving tools for dropshippers.
Reasons # 3: Dozens of Payment Gateways to Choose from
Shopify is the champion when it comes to payment options. Over 100 gateways! The closest competitors are still way behind Shopify in this respect.
Customers can choose among many third-party providers, such as Amazon Pay or Skrill, according to their geographic regions. Here is a list for the United States. Fees for using these services apply.
You can also use Shopify’s own gateway called Shopify Payments. You don’t have to pay fees for using Shopify Payments. Just conduct a transaction with your card (credit or debit).
What’s more, you can sell your goods in different currencies through Shopify Payments. The system will identify the customer’s country and convert the price to that country’s currency in accordance with the current exchange rate. The only downside is that Shopify Payments is available in a limited number of countries.
Reason # 4: Easy Shipping Options Adjustment
Setting different shipping rates based on the weight and value of goods, customers’ locations, or delivery time is crucial for any dropshipping business. Shopify excels at this too.
Besides, Shopify has partnered with the world’s leading shipping companies like DHL and UPS. So, if you decide to purchase goods from a manufacturer and choose your own courier service, Shopify is there for you as well.
Reason # 5: Excellent SEO Capabilities
What’s the use of building a store if no one can find it on the Internet? Shopify does a great job of improving search engine visibility. It has a plethora of useful SEO functions, like customizable titles, meta-tags, keywords, alt text, and many more.
In addition, the e-commerce platform provides Integration with the largest media channels like Facebook. With all these SEO bells and whistles, your chances that Google will fall in love with your dropshipping store become much higher.
Reason # 6: Care for Mobile Users
When an online store owner ignores mobile users, the business is bound to fail. An ever-increasing number of customers today prefer shopping from their handheld devices.
The Shopify team is well aware of this trend. It has ensured that all websites based on their platform look great regardless of screen resolution. Besides, mobile commerce features allow both consumers and business owners to work with their Shopify-powered online stores on mobile devices in the same way they work with the web version.
Bottom Line
Dropshipping is an easy-to-set-up and profitable business that requires a minimum amount of upfront investments. It attracts entrepreneurs with its flexibility of selecting products for sale and without having to be tied to one specific location.
Most dropshippers prefer Shopify as the e-commerce platform behind their online stores. It’s simple in operation, requires no technical expertise, is easy to scale, and provides many useful functions, such as adjusting shipment options and accepting payments through numerous gateways.
While Shopify is a great solution that anyone can get up and running fast, making it really beautifully designed, SEO-friendly, and secure is a job for professionals. The Site Slinger’s Shopify development team is always at your service, whatever idea you have for your online store. We perform PSD to Shopify conversion and can customize your Shopify themes to look great on any device.