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The Definitive Guide to Shopify Dropshipping in 2021

This is our complete guide on how to get started with dropshipping through Shopify in 2021.

If you want to learn how you can build your own store with minimal investment or risk — you came to the right place.

In this dropshipping guide, I’ll explain step-by-step what dropshipping is, how it works, and how to set up your Shopify dropshipping store.



What Is Dropshipping

Dropshipping is an inventory-free way of running an eCommerce business. This is done by using an external supplier that takes care of storing the products and order fulfillment for you. 

With dropshipping, you only have to pay for products that you actually sold. Leaving you with a risk-less and investment-free way to get started with eCommerce. On top of that, you don’t have to spend time packaging orders, shipping them out, or worrying about your inventory management.

With your own dropshipping store, you can leave the headaches to someone else. 


How Dropshipping Works

How dropshipping works

A Shopify dropshipping store works as follows.

  1. A customer purchases a product from your store
  2. You fulfill the product through Oberlo or another fulfillment app depending on your supplier
  3. The supplier will receive notification of the made order on your store
  4. The supplier ships out the ordered product to your customer

As you can see, you never get the products in your own hands. Products go directly from the supplier to your customer in a simple and almost completely automated process.


Is Dropshipping Dead?

Is dropshipping dead?

When looking up dropshipping, you will likely run into articles and videos declaring that dropshipping is dead. These will claim that dropshipping is no longer profitable due to the market being too saturated.

While it is true that some products — especially winning products from AliExpress are often saturated, this doesn’t mean dropshipping is dead. 

In reality, eCommerce is booming. Every day, more and more people buy online. Especially recent events such as the coronavirus pandemic have changed the way we shop forever.

So yes, dropshipping is long from dead. 

Continue Reading: Why Dropshipping Is Not Dead


Is dropshipping legal?

Another question you might be wondering, is whether or not dropshipping is legal. 

The answer is simple, yes dropshipping is legal. As long as you don’t sell anything that is copyrighted or trademarked (for example Disney products) or counterfeit product, you have nothing to worry about.

Dropshipping is just another business model where you sell products from a supplier to customers for a markup. This is exactly what your local grocery store does, the video game store, the bar and so on. 


The Pros and Cons of Shopify Dropshipping

Of course, dropshipping is by no means the perfect business model. While it does have some great advantages, many disadvantages come with it as well. 

Pros

  • Little risk. With dropshipping, you don’t have to worry about purchasing inventory. You only pay for products, once you actually sell them. Thus, you don’t have to worry about losing money if the product you’re testing out doesn’t end up selling well. 
  • Little upfront investment. Dropshipping can be done from anywhere. You don’t have to rent a warehouse or spend money on an inventory. This means you can easily get started with an eCommerce business without spending a large amount of money. 
  • Easy to start and manage. Starting a dropshipping store through Shopify is very easy due to it’s snappy dashboard, easy to set up payment settings and the many dropshipping apps that you can integrate with. An experienced dropshipper can set up a functional Shopify dropshipping store in under 5 minutes. 
  • Easily scalable. As you don’t have to worry about purchasing inventory yourself, this also means you can scale up your business very quickly. Successful dropshipping stores have been scaled to 6 and even 7 figures in revenue within months time through successful facebook ad campaigns and great products.

Cons

  • Profit margins are low. As you are upselling products from a supplier, you cannot expect to see the same kinds of profit margins as you would otherwise. While you can generally expect a markup of at least 3X with most products, when Facebook Ads are used, profit margins can drop as low as 10%.
  • You don’t have control over fulfillment. With a dropshipping business you have very little control over the entire fulfillment process. Suppliers can take their time processing orders (especially when dropshipping from AliExpress) and that can be annoying when customers start asking questions.

Dropshipping Essentials

Before we get started with setting up a Shopify dropshipping store, you first need to know some of the terminology and methods of dropshipping that are available. 

If you already know most of the terminology you can skip ahead to the next chapter. 


What is a General Store?

What is a general store

A general dropshipping store is a store where you sell a bit of everything. There is no theme or niche to your store. 

On a general store, you can sell beard trimmers, swimsuits and phone cases all on the same store. 

These are often used to test out many different products ‘novelty products’ in many different niches quickly.

Successful marketers often use general stores where they test products and niches and then continue to build a niche store or one product store around those that turn out to be winners. 

General stores are great for testing but not recommended for long-term brand building. 

Dropshipping general store examples


What is a Niche Store?

What is a niche store?

A niche store focusses solely on one niche. This can be a broad niche such as “fitness” but also sub niches such as “yoga”. 

Niche stores are great for establishing long-term branding and scaling up organically. You are also able to get higher quality paid traffic as your Facebook pixel will be optimized for your niche. 

Customers are also more likely to buy from a niche store compared to a general store. 

Niche stores are great for long-term brand-building but harder to start for beginner dropshippers as niches have a higher tendency to fail.


What is a One Product Store? 

What is a one product store?

A one product store, just like the name suggests — only sells one single product. 

These are great for products you are absolutely sure about (for example after testing on a general store). 

They are also great for knocking out the competition as customers are more likely to purchase from a branded one product store, as opposed to a niche or general store.

Marketers often use one product stores to aggressively scale up winning products.

One product stores are not recommended for beginners as they have a very high chance of failing. 

One product store examples


General Store vs Niche Store vs One Product Store

Struggling to understand which kind of dropshipping store best fits your needs? The table below should give you a more accurate presentation.

MetricsGeneral StoreNiche StoreOne Product Store
Beginner FriendlyYes general stores are very beginner friendlyYes but niche store are more likely to fail than general storesNo as stores are likely to fail due to product saturation or lack of interests
Brand-BuildingDoesn’t offer a lot of room for long-term brand-building. Great for long-term brand-buildingGreat for long-term brand-building
Upselling ProductsNot greatGreat for upsellsNo upsells
Scalingdifficult to scaleGreat for scalingPerfect for scaling

Both general and niche stores are good for dropshipping beginners.

Beginners have little to no eCommerce experience, this makes it difficult to understand which products will perform well. That’s why one product stores and microniche stores are not recommended for this group.

It’s best to start with a broad niche or general store and work your way from there.


Product & Niche Research


How To Find a Profitable Dropshipping Niche

Niche research is tricky. Often beginners to dropshipping will opt for a niche such as “fashion”, “sports” or “pets”. 

These niches are however too broad and far too competitive. 

You might think that there could never be enough fashion brands out there — as this is what I believed when I first started — but you would be seriously wrong.

When I started my first ‘fashion’ store I quickly learned I wasn’t just competing with hundreds of fast fashion empires such as PrettyLittleThings, Fashionnova, Asos and so on.

I was also competing with thousands of beginner and intermediate entrepreneurs just like me who were running a dropshipping business. 

I spent so much money on Facebook Ads for that one brand I made, that I quickly (and wrongly so) started believing Facebook Ads were overpriced and not profitable. 

So instead, I opted for Instagram marketing. 

I dedicated multiple hours towards Instagram and started growing rather quickly. But soon the Instagram algorithm started showing me more and more of my competitors.

It seemed like I was seeing new competitors pop up by the minute. 

Each one selling the same or identical products from AliExpress as I was.

It took me several more months after that to realize I was in a niche far too competitive and needed to get out ASAP.

I learned a lot from that first store but the most important lesson for me was that every business, even a dropshipping business, requires thorough research. 

How to identify a good niche vs a bad niche

Some niches simply don’t work for dropshipping. By using common sense you can quickly sniff out the bad niches. Here are some dropshipping niches you should avoid:

  • Seasonal products, as customers will expect quick delivery times
  • Electronics, these things break and result in many customer service issues and refunds
  • Products that might get you sued, such as copyrighted and trademarked products
  • Health-related products, as they will make you liable
  • Watches, sunglasses, and other extremely saturated dropshipping niches. Basically, if it sounds too straight-forward, it definitely is. Within these niches, you’ll be facing a lot of competition and thus have a hard time generating profits. 

You should also avoid products with high competition (especially those dominated by big brands) and products that are against Facebook’s Terms of Service to avoid having your ad account banned. 

Niche Research Tools

I’m sure you’ve heard that in 2021 “data” is the new gold. This is also why huge companies such as Facebook and Google that dabble in data are getting in legal trouble that often hits the headlines.

What you may not know, is that you can gain access to Google and Facebook’s data not just through their paid advertising platform but also when doing niche research for your store. 

Google lets you access Google Trends and Facebook lets you access their Facebook Audience Insights. These tools are completely free to use and have a massive amount of data. Scary, true, but also very useful for us marketers. 

Google Trends

Facebook Audience Insights


How To Do Product Research For a Dropshipping Store

Just like with niche research, there are a number of tools I use to do my product research.

The first tool, is the AliExpress Dropshipping Center

AliExpress Dropshipping Center

AliExpress Dropshipping Center is the best way to do free product research for AliExpress Dropshipping

This tool is great for two reasons — it’s free and located on AliExpress website and is thus linked with their marketplace. 

This is by far one of the best product researching tools out there for AliExpress dropshipping, especially when you consider that most of the other tools require monthly payments. 

To access the AliExpress Dropshipping Center, you need an AliExpress account. 

If you’re new to AliExpress, the dropshipping center won’t be immediately visible to you. 

While there are a number of complicated methods to get the dropshipping center, the easiest way to do so is by applying through this link.

Once accepted, you’ll be able to find the dropshipping center in the red bar on top of the screen whenever you go to your ‘My Orders’ or ‘My AliExpress’ page. 

It will be the last link as shown here. 

ADC comes with two tools: 

  • Find AliExpress products to sell
  • Product analysis

The first tool is to find potential products and the second is where you can study their order history in a graph. 

Find AliExpress products to sell
How to find products to sell from AliExpress using the aliexpress dropshipping center

This is where you’ll be doing most of your research. 

Here you can search for potential products within AliExpress’s database through a variety of different searches.

You can search the hot selling items, you can search through different niches, you can search between different shipping countries and you can even search by image. 

So if you’ve seen a product on a certain website that you think you might be able to find on AliExpress, save it and paste it here to let the AliExpress dropshipping center find it for you. 

AliExpress Product Analysis
How to do product analysis in the aliexpress dropshipping center

This is where you can analyze the products you find with tool 1 (or any product on AliExpress) by copy-pasting the product page URL.

Once the product is added, the dropshipping center will provide you with a graph and the reliability of the logistics.

The graph is the interesting part. Here you can see for yourself whether or not the product is actually doing well. 

The graph displays daily orders on a scale from 1 – 100.

You want to look for consistency. A good product has consistently about 40-50 orders a day over the entire period.

This tells you the product is still very much in demand and can be dropshipped.


Dropshipping Suppliers

One of the most important decisions you’ll be making in your dropshipping journey is picking a reliable dropshipping supplier. 

In this part of the guide I will list different popular dropshipping suppliers that you can use and their pros and cons.

Dropshipping From AliExpress

Suppliers from AliExpress are very easy to dropship from

AliExpress dropshipping is by far the most popular variant as this integration is the easiest to get started with.

By dropshipping from AliExpress you are literally ordering products from AliExpress and shipping them directly to your customer. This is done semi-automatically through Oberlo. All you have to do is click a button and the order will be fulfilled by your AliExpress supplier. 

Setting up a Dropshipping store with AliExpress integration through Oberlo is 100% free. Oberlo is also owned by Shopify so the integration is about as smooth as it gets. 

What is AliExpress?

If you don’t know what AliExpress is, it’s a marketplace similar to Amazon where wholesale sellers located in China offer products for dirt-cheap prices. Anyone can create an account and anyone can buy from AliExpress.

Pros and Cons of AliExpress dropshipping

PROS

  • AliExpress dropshipping is as easy as it gets. Simply sync your products with the Oberlo app for Shopify and you’re good to go. 
  • Access to a wide range of products. As AliExpress is a marketplace, you gain access to  millions of products. Seriously, you can find anything on AliExpress. In the e-commerce space we say, if it’s not on AliExpress, it doesn’t exist. 
  • Products are dirt-cheap — 

CONS

  • Long shipping times — as products are coming from China, your customers will likely have to wait anywhere from 14-30 days for their product. Some shipping options such as ePacket offer faster shipping to certain parts of the world. 
  • Communication issues — communication with AliExpress sellers isn’t always great. Their english is often broken resulting in miscommunication and they are often not very helpful. This can be a pain when customers are asking questions. 
  • Returns are a hassle — 

Printful Print On Demand Dropshipping

Printful print on demand dropshipping offers a great alternative to aliexpress dropshipping

Printful is a company that offers print on demand dropshipping. This means they can print your art, designs, logo’s and other digital files on their entire inventory of products and send it to your customer.

Just like with conventional dropshipping, you only pay once a customer purchases the product from your store. 

Printful is completely free to use and integrates with Shopify through their app. If this interests you, you can check out our printful print on demand guide.

Here are some more resources we’ve published on print on demand:

Dropshipping Directories

Dropshipping directories have a wide range of third-party dropshipping suppliers that you can establish dropshipping relationships with.

You can kind of compare these directories with phone books.

They come with all the info you need to contact the supplier and that’s what you’re paying for: their contact information.

These directories do not provide product importing or fulfillment.

You will have to figure this out for yourself and unless you’re willing to do all of it manually, that may get technical.

Examples of dropshipping directories are:

Read also: Oberlo vs Salehoo

And: Oberlo vs Doba

Premium Dropshipping Services

Next to your basic AliExpress dropshipping services, you also have premium dropshipping services.

These are services that have their own directory of suppliers and allow you to dropship directly from them.

In comparison with dropshipping directories though, these services come with product import and fulfillment.

Premium dropshipping services are known to have more expensive products with lower profit margins but come with advantages such as branded packaging, invoicing, EU/US suppliers, faster shipping, private labeling, and more.

Examples of these premium dropshipping services are:

We have reviewed some of these services.


How To Create A Shopify Dropshipping Store

If you made it this far, it’s finally time to sign up to Shopify and setup your dropshipping store. This guide will take you through this process step-by-step.

In just 8 quick steps, you can have a dropshipping store ready to go!


1. Create a Free Shopify Account

How to create a free shopify account to start your dropshipping store

The first step to starting your Shopify dropshipping store is signing up for Shopify. You can sign up for the free trial by clicking this link.

To sign up for the Shopify trial, you only need an email address. You don’t need to provide any payment information.

Setting up your Shopify account is fairly easy and just requires a little bit of info on your end.

Shopify will ask you for the following information:

  • Email address and store password
  • Address information
fill in the details to complete your Shopify free trial

You will also be asked to fill in some questions about yourself, but this step can be skipped for faster set up.

fill in the details to complete your Shopify free trial

Once your address information is filled in, you will gain access to the Shopify dashboard where your entire store will be run from.

fill in your address to complete your Shopify free trial

2. Install your Fulfillment App

Once you have gained access to your Shopify dashboard, you can install the app that integrates with your dropshipping supplier.

Example of these apps are:

In this dropshipping guide, I will focus on using Oberlo as our fulfillment app.

To install Oberlo, you should navigate to Apps on your Shopify dashboard like so — Dashboard > Apps > Visit the Shopify App Store.

How to install oberlo through the Shopify app store

In the Shopify App Store, search for Oberlo and install the app.

Install oberlo in the Shopify app store

3. Add Products To Your Store

Once our fulfillment app is installed you can easily add products to your store.

For this guide, we’ll be adding products directly from AliExpress to our store.

In order to quickly import products from AliExpress to Oberlo, you’ll need to have the Oberlo extension installed for Google Chrome.

In order to import products from AliExpress to Oberlo, you need to have the oberlo chrome extension installed

Once the chrome extension is installed you will notice the Oberlo logo on every AliExpress product page at the left bottom side.

The oberlo chrome extension creates an oberlo button on every AliExpress product page. Click this button to add products to your import list.

To import a product to your store, simply click on that logo and the extension will add the product to your Oberlo import list.

Next, navigate to import list in your Oberlo Dashboard.

In the import list, you can push the product to your store. You can also edit the title, description, variants, pricing, and select the images you would like to use.

To import the product to your store, click on “Import Product”.

All products imported this way will be synced up with Oberlo. This means Oberlo will track the inventory and fulfill orders for you.

If you’re still unclear on how to chrome extension works, you can follow along with this video.


4. Configure Your Store Theme

You can configure your theme settings by navigating to Online Store > Themes in your Shopify dashboard.

How to configure and customize your Shopify theme within the shopify dashboard

From there, you can choose to customize your theme and access the free and paid theme library.

Shopify has 9 free themes. All of which can be customized completely to your taste.

Select the theme of your preference and add it to your theme library.

Next, click on the green Customize button to customize the home and product pages of your store.

In this customization window you can setup your logo, fonts and color palettes.

You will also be able to configure your homepage through drag-and-drop sections that you can add and remove to your preference.


Every e-commerce store needs a privacy policy and terms of service.

Luckily for us, Shopify is able to generate this for you.

In order to set up your legal pages navigate to Settings > Legal.

In the legal settings of your Shopify dashboard you can generate policy templates for your store

On this page, you can generate them by pressing the create from template button for each of the sections.

The legal pages generated here will be listed on the checkout page for your Shopify store.

Generated policy templates will be visible in the footer of your checkout page

To be safe though, you should also have these setup in the footer of your main store.

Every Shopify store should also have policies in their store footer

To do this, you can copy-paste the content into a separate page. So navigate to Online Store > Pages and click on Add page.

Here's how you can add the privacy policy to your shopify store

Add an appropriate title and copy-paste the contents from your generated policies. Do this for each of your policies.

Next, you’ll want to create footer links to these policies. For your navigation settings, navigate to Online Store > Navigation.

Click on Footer Menu and then hit add menu item. Give it the same name as your page (e.g. Privacy Policy) and type in Privacy Policy to find the appropriate page and link them up.

Here's how you can add your privacy policy to the footer of your Shopify store

Do this for each of your legal pages and hit save menu when you’re done.


6. Add Contact Page

Customers should have a way to contact your store with questions regarding their orders. For this, you’ll need a contact page.

To create a contact page, navigate to Online Store > Pages and click on Add a new page.

Give the page an appropriate title (e.g. Contact Us).

You could also write a small paragraph urging your customers to contact you with any questions they may have.

To turn the page into a page with a contact form, you’ll need to change the template of said page. To do this, look to the right side of the page, you will see a menu that reads Template.

The base template suffix reads ‘page‘. Change this to ‘page.contact‘ and hit save.

How to create a contact page for your Shopify store

Now all you have to do is add this contact page to your navigation menu.

To do this, go back to your store navigation — Online Store > Navigation.

This time, select main menu. Then add menu item and add your contact page.

You can also add the contact page to your footer menu if you’d like.


7. Setup Your Payment Settings


8. Add A Custom Domain

There are two ways you can add your domain to Shopify.

The easiest way is to buy your domain directly through Shopify.

The best way, however, for a number of reasons such as getting a custom email address, is to get your domain from a third-party service.

Here are some examples of third-party services:

Or whatever service you may already be using for another website.

Installing a third-party service domain requires a little bit more work, but it’s really not that difficult.

All you need is access to the DNS settings of your domain.

To gain access to the DNS settings you will have to go to the control panel of the service you picked and change the following things:

This article by Shopify will cover how you can setup a third-party domain for most registrars.

Alternatively, you can also google ‘[name of your service] + Shopify’ to find instructions on how to do it for your specific third-party service.

Or you can watch this video-tutorial that will help you connect a third-party domain.


9. Launch Your Store

Once your payment settings are set up, you’re as good as ready to launch your store.

Shopify stores are always password protected during development. To make your Shopify store live, all you have to do is remove this password.

You can do this by navigating to preferences — Online Store > Preferences and scroll down to the section that reads ‘Password Protection‘.

Here, you can uncheck the menu that reads enable password.

How to launch your Shopify store

Once unchecked, save the page and your Shopify store is now live!


How To Brand Your Dropshipping Store

In this chapter, I will lay out all the elements you need to make your dropshipping store look great, trustworthy, and a sale-generating machine. 

This is done through proper branding, and that starts with the design of your store.


Why Branding Is Important To Your Dropshipping Success

Starting a Shopify store and throwing some products on their through an AliExpress integration is easy. What’s hard however, is making that store look good.

This is something those who are new to dropshipping often struggle with and the main reason we often run into dropshipping stores that look like this:

As opposed to dropshipping stores that look like this: 

Both of these stores are dropshipping. The difference is that one of them is brand new and under the delusion that you don’t need to make your store looks good and the other has been in dropshipping long enough to know how important the design and branding of a dropshipping store really is.

The mistakes made on store #1

  • Long, unattractive titles
  • AliExpress product descriptions
  • Poor logo design
  • Bad or no color palette
  • None or poor copywriting
  • Poor product images

As dropshipping is becoming more popular, people are more and more running into stores that look like the first one. These have a bad reputation as they often also come with bad management.

With that I mean unresponsive or unhelpful customer service, no refunds given, and other poor customer service management which leads customers to believe they have been scammed. And rightly so.

If you want customers to purchase from your store, they first have to trust your brand. 

At the minimum, a dropshipping brand should have:

  • A simple but clean logo
  • A good color palette
  • Matching, short product titles
  • Well written non-copied product descriptions 
  • Matching, clean product images 
  • Good copywriting
  • An attractive brand story

Defining a Color Palette

Colors are tricky, not everything works with each other and some combinations look good to some that look bad to others. 

Bad color combinations are a common mistake and beginners often opt for no colors at all, leaving their Shopify themes entirely in the default colors they came in.

Luckily for us, there are many free online tools that can prevent this issue entirely. 

Tools like Adobe Color and websites like Colourlovers can help us find matching color schemes within minutes.

Colourlovers lets choose between a library of complementary color palettes submitted by the community. 

Adobe Color is a nifty tool that helps you find complementary color palettes starting from a single color and even has functions where you can draw a color palette from an image or screenshots. 

With these tools at your disposal, finding a color palette that fits your branding, becomes easy.


The logo is the face of your Shopify dropshipping store, so you want to get it right. 

You don’t need to hire a professional designer to create your store logo, but it does help.

If you have the budget for it, you can check out some of the logo designers on Fiverr to make your idea come to live. 

But for those without a budget, you can create a logo yourself using tools like Photoshop, Illustrator or Canva (Free).

Your brand logo doesn’t have to be complicated. Often a simple icon next to a nice font will do the trick, as long as they look clean and are in the same color palette as your branding.

Don’t overdo the logo as a logo can quickly become too busy.

The best logos are simple. Think about Nike, Adidas, Apple, and so on. Many of the popular brands we use every day have very simple logos. 

You can use the video below to get an idea of how you can easily create a logo using a free tool like Canva.


How To Market Your Dropshipping Store


Facebook Advertising

Facebook advertising is the best way to market your dropshipping store as you get high conversion rates and low ad costs

Advertising through Facebook is the most popular method of driving traffic to a dropshipping store. This is due to the relatively low ad costs and high conversion rates. 

Facebooks algorithm is killer when optimized completely to your product and audience. 

Through Facebook Ads stores can quickly test products and scale winners to enormous numbers.

Here are some tips to get started with Facebook Ads

  • Don’t just focus on the United States — International audiences can often lead to cheaper clicks and cost per purchase. Check out our ePacket countries list to reach a worldwide audience that is accessible with ePacket shipping. 
  • Give the Facebook Pixel time to optimize — Don’t expect your ads to be profitable instantly. Even the best ads aren’t profitable right off the bat, Facebook needs time to optimize. 
  • Make sure your product page is perfect before you start your ads — A perfect product page contains clean product images, a clean title, and great sales copywriting.
  • Always start ads at 12:00 AM the next day — If you don’t start your ads at midnight, Facebook will try to push your entire days budget within the hours that are left in that day.
  • Video Ads tend to outperform image ads — A video tells a lot more than a simple image. This is why video ads often convert far better than their image counterparts. However, you should still test both video and image ads to your audiences to make sure.
  • Test, Test, Test — I don’t know anyone who has run a successful Facebook ad campaign right off the bat. No one is that good or that lucky. Facebook Ads require testing, testing, and more testing.

Email Marketing

Every dropshipping store, should have an effective email list and market to this list.

Why? Because email marketing is far, far cheaper than advertising.

For the price of a small monthly subscription fee to your email marketing service, you can send unlimited emails to a list of potential and existing customers.

While Shopify automatically sends abandoned cart emails out for you, you should still opt for a third-party service such as Klaviyo to do your email marketing on.

Such third-party apps can be integrated with Shopify through their respective apps.

This way, you can build an email list and send out more personalized abandoned cart emails to your customers that will yield a higher conversion rate.

Statistics show that 70% of online carts get abandoned.

With an effective abandoned cart campaign (ideally containing 3 follow-up emails) you can convert some of those abandoned carts into purchases.

Now It’s Your Turn

So that’s how you can get started with Shopify Dropshipping in 2021.

Now I want to turn it over to you: are you ready to get started with dropshipping this year?

What is your plan for 2021? Let me know by leaving a quick comment below.

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