Last Updated on February 28, 2025 by Himanshu Rawat

Dropshipping has become a popular and efficient business model in e-commerce, and Shopify makes it easier than ever to get started. Whether you’re new to the game or an experienced entrepreneur, understanding how Shopify dropshipping works is key to success.

In this blog, we’ll explore what Shopify dropshipping is, how it works, and why it’s a great opportunity for you. By the end, you’ll be ready to launch your own Shopify dropshipping business and start making sales.

What is Shopify Dropshipping?

Dropshipping is an e-commerce business model where the store owner doesn’t keep the products they sell in stock. Instead, when a customer makes a purchase, the store owner buys the product from a third-party supplier, who then ships it directly to the customer.

This eliminates the need for storing inventory or dealing with fulfillment, making it a low-risk way to start an online business. Shopify is an all-in-one e-commerce platform that allows individuals to easily build and manage online stores. 

Shopify annual revenue for 2024 increased to $8.88 billion, a 25.78% rise from the previous year. The number of Shopify stores using dropshipping increased from 5.16% to 12.82% of all Shopify stores. It integrates with numerous dropshipping apps and suppliers, making it the go-to platform for aspiring dropshippers.

How Shopify Dropshipping Works? 5 Steps to follow

Want to know how Shopify dropshipping works? This simple guide covers everything from choosing a niche to setting up your store, finding suppliers, and making a profit with low overhead.

Step 1. Choose Your Niche: 

The first step is selecting the products you want to sell. This can range from electronics to home decor, fitness products, or beauty items. It’s important to research your niche to find products that are in demand and offer decent profit margins.

Explore a range of unique product ideas to consider for your dropshipping business and find the perfect niche to boost your success.

• Vitamins and supplements
• Skincare Product
• Makeup Product
• Phone Accessories
• Candles
• Drink Ware
• Jewelry
• Home Decor
• Pet Product, etc.

Step 2. Set Up Your Shopify Store: 

Shopify provides an easy-to-use platform where you can set up your store, customize its design, and add your products. You don’t need to be tech-savvy to use Shopify as it offers a user-friendly interface and various templates for a professional-looking store. 

Here’s a quick overview of the steps to set up your Shopify store.

• Create a Shopify Account
• Customize Your Store
• Set Up Your Domain
• Add Products
• Set Up Payment and Shipping
• Promote Your Store

Step 3. Find a Reliable Supplier: 

Dropshipping apps like Oberlo, Spocket, and DSers make it easy to find reliable suppliers who can fulfill your orders. These apps integrate seamlessly with Shopify, allowing you to import products directly into your store. 

We’ll discuss how to choose the right supplier in more detail later in the blog.

Step 4. Market Your Store: 

Once your store is set up and your products are listed, it’s time to start marketing. 

• You can use social media ads (like Facebook and Instagram), Google Ads, SEO (Search Engine Optimization), and influencer marketing to drive traffic to your store.
• Use Outfy: Outfy helps you create and schedule social media posts, product videos, and promotional content for platforms like Instagram, Facebook, and Pinterest, boosting your product visibility.
• Time-Saving Automation: It automates marketing tasks, allowing you to focus on other aspects of your business while driving traffic to your Shopify store and improving conversions.

Step 5.Customer Places an Order: 

When a customer places an order, you receive the payment. You then forward the order details to your supplier, who ships the product directly to the customer.

Profit: 

The difference between what you charged the customer and what you paid the supplier is your profit. Since there’s no need to manage inventory or shipping, this model allows for low overhead costs and scalable growth.

Why to choose Shopify Dropshipping?

Now that you know the basics, let’s explore why Shopify dropshipping is such an attractive business opportunity.

• Low Startup Costs: No need for inventory or warehouse space. Your only costs are the Shopify subscription and marketing.
• No Inventory Management: Suppliers handle inventory, packaging, and shipping, letting you focus on marketing and customer service.
• Location Independence: Operate your business from anywhere with an internet connection.
• Scalability: Easily expand product offerings and marketing efforts without increasing operational costs.
• Wide Product Range: Access to a variety of suppliers and products for different niches.
• Built-In Tools & Apps: Shopify’s apps streamline operations like order management and customer service.
• Automation: Automate tasks like order fulfillment and notifications to save time and improve efficiency.

Top Shopify Dropshipping Suppliers for Fast Shipping and Quality Products

When selecting the best Shopify dropshipping suppliers, it’s important to consider factors like product range, shipping times, integration with Shopify, customer support, and reliability. Here are some of the top Shopify dropshipping suppliers:

1. Oberlo (Owned by Shopify)

Features: Oberlo is one of the most popular dropshipping apps on Shopify. It allows you to import products directly from suppliers (mostly from AliExpress) into your store.

Advantages:

• Seamless Shopify integration.
• Product import with a click.
• Helps with product pricing, order fulfillment, and tracking

Best for: Beginners.

2. Spocket

Features: Spocket connects Shopify merchants with suppliers from the US and the EU, focusing on faster shipping times.

Advantages:

• High-quality products.
• Fast shipping from suppliers based in the US and Europe.
• Easy Shopify integration.

Best for: Sellers focusing on higher-quality products and faster shipping.

3. Printful

Features: Printful is a print-on-demand supplier, perfect for those who want to sell custom-designed products like T-shirts, mugs, and posters.

Advantages:

• No upfront costs for printing products.
• Wide range of customization options.
• High-quality prints and products.

Best for: Merchants focused on custom print products.

4. AliExpress

Features: AliExpress is a massive online retail service that offers a dropshipping option with direct shipping to customers.

Advantages:

• Large selection of products from different categories.
• Low product costs.
• Easy integration with Shopify via apps like Oberlo or DSers.

How to Choose the Best Shopify Dropshipping Suppliers for Your Store?

• Establish a Relationship:
  Contact suppliers, ask questions about issue resolution, shipping times, and order submission. Assess their responsiveness and willingness to address problems.
• Test Samples:
  Order samples to check product quality. Only add products to your store if you’re confident in their quality, and resolve any issues with the supplier.
• Domestic vs. International Suppliers:
  Weigh the pros and cons. Domestic suppliers offer faster delivery but higher prices; international suppliers may have longer shipping times and customs issues.
• Diversify Suppliers:
  Don’t rely on a single supplier. Diversify to avoid disruptions, shipping delays, and potential service issues.

How to Manage Returns and Refunds in Shopify Dropshipping

Dealing with returns and refunds is a crucial aspect of running a successful Shopify dropshipping business. Here’s a step-by-step guide on how to manage returns and refunds effectively:

Managing Returns:

• Customer Request: The customer contacts you to initiate a return due to an issue with the product.
• Assess Return Reason: Determine why the customer wants to return the product and assess any costs involved.
• Obtain RMA Number: Request a Return Merchandise Authorization (RMA) number from the supplier.
• Customer Sends Product Back: The customer ships the product back to the supplier, including the RMA number.
• Supplier Confirmation: The supplier confirms receipt of the returned product and refunds you the wholesale price.

Processing Refunds:

• Refund Customer: Once you receive the refund from the supplier, you refund the customer for the returned product.
• Use Shopify Admin: Manage refunds directly from your Shopify admin panel by going to the Orders section and selecting the order to refund.
• Refund Shipping: Optionally, refund shipping costs if applicable.

Best Practices:

• Clear Return Policy: Develop a transparent return policy that aligns with your suppliers’ policies to set clear expectations for customers.
• Streamline Communication: Establish direct communication channels with suppliers to ensure smooth returns processing.
• Customer Satisfaction: Focus on maintaining customer satisfaction by offering solutions like returnless refunds or exchanges when feasible.

Handling Common Issues:

• Fraud Prevention: Be cautious of potential fraud by monitoring repeated refund requests from the same customer.
• Supplier Relationships: Maintain good relationships with suppliers to ensure efficient returns processing.

Some Real Inspiring Shopify Dropshipping Success Stories

Explore inspiring Shopify dropshipping success stories and learn how entrepreneurs built profitable businesses.

1. Tom Sagi

Tom scaled his Shopify dropshipping business to $60,000 in revenue, emphasizing the importance of product testing and effective advertising.

2. Tze Hing Chan

Co-founder of Subtle Asian Treats, Tze made $19,000 in profit within two months by selling bubble tea plush toys and other merchandise.

Conclusion

Shopify dropshipping is a highly accessible and profitable business model, offering low startup costs, no inventory management, and the flexibility to operate from anywhere. By selecting the right niche, suppliers, and marketing strategies, you can build a successful online store. With the right tools, such as Shopify’s built-in features and dropshipping apps, you can streamline operations and scale your business efficiently.

FAQs on Shopify Dropshipping

1. What is Shopify Dropshipping?

Shopify dropshipping is an e-commerce model where you sell products without holding inventory. When a customer orders, the supplier ships directly to the customer.

2. How much does it cost to start a Shopify dropshipping business?

The cost to start is relatively low. You’ll pay for a Shopify subscription and potentially marketing costs. There’s no need to invest in inventory or warehouse space.

3. How do I find reliable suppliers for my Shopify dropshipping store?

Use dropshipping apps like Oberlo, Spocket, or AliExpress to find reliable suppliers. Always test products and establish good communication with suppliers.

4. How long does shipping take in Shopify dropshipping?

Shipping times vary depending on whether you choose domestic or international suppliers. Domestic suppliers typically ship faster, while international suppliers may take longer and involve customs.

5. Can I scale my Shopify dropshipping business?

Yes! Shopify makes it easy to scale your dropshipping business by allowing you to expand product offerings, reach new markets, and automate processes without increasing operational costs.