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Shopify Dropshipping Vs. Amazon Dropshipping | Which Model Is Right for You?

Dropshipping has gained popularity in recent years, especially amongst the young population. A dropshipping business requires low investment and if ran in the right way, yields a greater return. Due to its attractiveness, several platforms have introduced the opportunity to carry out a dropshipping business.

Shopify, along with Amazon, eBay, and other platforms, has introduced the opportunity for individuals to start their own dropshipping business.

Among these websites, Shopify is the most popular, as it enables all users to swiftly and easily set up their store online. Additionally, this platform does not require much technical knowledge. When you set up a store on Shopify, you can choose from a range of themes, which can streamline the management of your online store. As a result, you can successfully run the business, without having to struggle with the technicalities.

Dropshipping with Shopify is preferred by most dropshippers, as the platform provides a number of applications and specialised features that are created just for the sellers. If you employ effective strategies, your online eCommerce store can certainly flourish.

Dropshipping on Shopify refers to the act of selling products on an eCommerce platform, without having to hold inventory and managing shipping responsibilities. In dropshipping businesses, the fulfillment method, which includes manufacturing, storing, and shipping is managed by a third-party (usually the manufacturer).

Taking this into consideration, your job is to select the products to sell, working with a reliable manufacturer or supplier, brand the products, list them at a market competitive price on your online store, bring customers, convert them into sales, and carrying out effective customer service.

The dropshipping Shopify model follows the ensuing procedure:

Step # 1: You list the products on your Shopify store
Step # 2: A customer explores your store and places an order
Step # 3: The customer pays for the product at retail price
Step # 4: Once the transaction is finalised, you purchase the product from your supplier (at wholesale price), and subsequently, provide them with the shipping details of the customer
Step # 5: The supplier ships the products directly to the customer
Step # 6: You receive the payment automatically through payment gateways

Step # 4 is automatically performed through the integration between your Shopify online store and your supplier.

The dropshipping procedure is almost the same for every platform. However, Shopify can offer certain benefits that surpass the facilities that other eCommerce hosts have to offer. If you are struggling to decide which platform to choose to carry out your dropshipping business, read the ensuing guide.

The following elaborates on dropshipping with Shopify, Amazon, eBay, and other similar platforms. The guide also provides a detailed insight on how to make your dropshipping business a success.

Let’s get started!

Shopify Vs. Amazon Dropshipping

Shopify and Amazon are the two most sought-after platforms to carry out dropshipping. Both these platforms have their own advantages and disadvantages

On Shopify, you are presented with an opportunity to administer control over your own platform. This would mean that you can be in charge of the design elements, store layout, and policies. Due to this facility, sellers are at an advantage, as they can optimise their store and increase traffic and brand awareness.

Conversely, dropshipping with Amazon also provides you with numerous benefits, as you are provided with a large audience to cater to. Amazon, being the world’s largest eCommerce store, has millions of buyers.

However, Amazon’s popularity is also its disadvantage. As the platform has so many users, there is strong competition amongst sellers that are hosted on this platform. Therefore, if you choose Amazon to start your dropshipping venture, it is imperative to strategize, brand, and promote your store effectively. Product selection is key on Amazon.

Another disadvantage of using Amazon’s Fulfilment by Amazon service is the high cost associated with creating a seller’s account. Therefore, the only way you can make a profit off of this platform is by selecting products that give you decent enough profit margins to cover the fee charged by the service.

Here are a few advantages and disadvantages of using Amazon and Shopify for dropshipping.

The Technicalities of Managing an Online Store

On both Shopify and Amazon, it is relatively simple to open a dropshipping store. However, if you want to flourish on Shopify, it is essential to build your own audience by employing astute eCommerce marketing strategies.

Similarly, with Amazon, you can enjoy an influx of sales by winning the Buy Box. Winning the Buy Box offers dropshippers the chance to reveal their products to a vast audience.

The Total Price – Which is Cheaper?

Essentially, Amazon is slightly more expensive than Shopify. Additionally, this platform does not charge any third-party fee, whereas Amazon does have a referral and closing fees for every sale that you make.

Website Customisation

As stated earlier, Shopify provides a greater degree of control than other platforms. With Amazon, there would be lesser exposure to branding opportunities and you may struggle with building a trusting customer relationship (as customer is trusting the platform i.e., Amazon). On the other hand, with Shopify, the sellers’ website can be customised. Additionally, Shopify encourages users to set their own return policies, which is sometimes not the case with Amazon. If you are dropshipping with Amazon, you would be required to follow all of its rules and regulations.

Another benefit of Shopify over Amazon is that the former platform enables you to sell any time that you wish to sell. However, with Amazon, there is a list of restricted products that you are prohibited from selling on the platform, as well as certain products that would require formal permission before being listed.

Moreover, Amazon further follows the practice of suspending seller accounts, in the case they have a chunk of negative reviews and late deliveries.

The Hybrid Model

You can enjoy the benefits of both platforms by linking your Amazon store to your Shopify account. This way, you can reach out to the large audience offered by Amazon and take advantage of the features offered on Shopify.

Shopify Vs. eBay Dropshipping

Shopify Vs. eBay Dropshipping

Similar to Amazon, eBay provides sellers with more exposure, particularly in the UK. In fact, around 25% of all eBay sellers are located within the United Kingdom. However, despite that, Shopify is preferred more by sellers, as it provides you with a certain degree of control.

Technical Skills Required

Similar to the debate of Amazon vs Shopify, eBay and Shopify, both, do not require any technical skills to open and manage an online store. However, the success of Shopify is depending on effective marketing. You will need to invest in SEO (Search Engine Optimisation) to obtain favorable results.

On the other hand, eBay requires you to effectively monitor and re-list your products. For this platform, your rankings depend on how optimised your listings are, so you can win the ‘Best Match’ position.

The Total Cost – Which is Cheaper?

If the overall cost is taken into consideration, both eBay and Shopify have different pros and cons. This is because although Shopify’s subscription fee is relatively cheap, eBay can be used free of cost. However, eBay charges a specific amount to list products, and it also has a commission fee for the items sold on the platform.

Store Customisation

eBay provides branding opportunities to sellers; however, Shopify’s platform exceeds in terms of the benefits it offers. Additionally, parallel to Amazon, eBay has the right to suspend your account if you do not abide by its rules and regulations.

eBay is recommended for those individuals who are unwilling to spend their time and investment on creating a brand and are more interested in making swift sales. Additionally, eBay is also ideal for sellers who wish to sell used items.

Shopify Vs. Other platforms

In addition to the eCommerce giants, which are Amazon, eBay, and Shopify, there are a number of other dropshipping platforms available in the UK. Some of these include:

  • Avasam
  • The Wholesaler
  • MX Wholesale
  • eSources
  • Oberlo
  • GoTen
  • China Brands
  • Wholesale Deals
  • AOP
  • TB Trade
  • Gem Wholesale

While all these platforms have something unique to offer, Shopify offers more benefits, as it provides sellers with more control than other third-party marketplaces.

Additionally, Shopify is one of the largest platforms, and it provides a user-friendly interface. The stores on this website are mobile-ready, and one of the greatest advantages is that it offers the opportunity to work alongside several other applications.

However, one disadvantage of using Shopify is that it does not offer a complete customisation opportunity, which makes it unappealing to more technical dropshippers. For such individuals, an open-source platform may be the ideal choice.

10 Easy Steps to Start a Dropshipping Business Today

With Shopify, you have the freedom to implement different marketing strategies to attract more customers. Here are a few steps that you can take to direct more traffic to your website.

1. Research a niche/trend

Prior to inaugurating a dropshipping online store, it is imperative to come up with an idea about the niche or trend you wish to operate in. Ideally, it is important to find a niche or trend that is in-demand. For instance, the previous year reported a rise in the sales of board games, at-home bars, and kitchenware, due to the ongoing quarantine, resulting from the COVID-19 pandemic.

Taking that into consideration, it is essential to carry out comprehensive research regarding the recent trends and niches in the dropshipping industry. You can make use of tools, such as Google Trends, to highlight the items that can fill the gap in the market.

Based on your research, effective marketing can be carried out. Appropriate products can be sourced and listed on your online stores. This will lead you to better customer conversions. However, make sure that the products included in the store align with the theme of the online shop.

2. Find a gap in the market

In order to find success in any business, it is crucial to satisfy high customer demand. Therefore, before initiating your dropshipping venture, it is imperative to carry out comprehensive research to discover the gap in the dropshipping market. To do this, you would be required to study your competition, as well as your target audience.

Search for products that are not readily available in the market, but are in high demand. Dropshippers can further make use of Google Trends to discover the increasing searches in a particular region. For instance, Google Trends shows that there will be a high demand for athleisure wear, shapewear, wireless phone chargers, and posture correctors in 2021.

3. Analyse your Competitors

Getting an insight into what your competition is doing is extremely important. The success of a business depends upon how well informed you are about the market in which you operate. Taking that into account, it is recommended to study your competitors to evaluate and learn from their strengths and weaknesses.

Studying your competition would inform you about the things that they are doing right, as well as the mistakes they are making in their marketing strategy. This would enable you to make better decisions. For instance, if your competitor makes use of SEO services, your store would also need an effective search engine optimisation strategy to stay ahead of the competition.

When you are analysing your rival stores, a few factors need to be considered. These are:

  • What products have they featured in their store?
  • What is their marketing strategy and how effective is it?
  • Who is their target demographic?
  • What keywords do they use in their product descriptions?
  • What is their competitive advantage?

4. Search for a Dropshipping Supplier

In dropshipping, suppliers will make a world of a difference. They can be the reason for your store’s success or failure. If you are starting a dropshipping store, it is imperative to pick a reliable supplier, who can make swift deliveries, in a timely manner.

Most dropshippers tend to have multiple suppliers, as it provides numerous benefits. Working with more than one supplier can ensure that you always have options for inventory and are always stocked with products. Due to this, your store can honour its fulfilments. For instance, if one supplier does not have a particular item in stock, it is highly likely that the next supplier would have that particular item.

Moreover, this technique is also beneficial if your supplier suddenly decides to end your contract. This way, you would have a backup option and the operations of the store would not be compromised.

With that said, it can be difficult at times to find multiple suppliers with the exact same products.

5. Create an Online Store

Once the supplier and the products are decided, the next step is to create a store on Shopify. To do this, the first thing that you need to do is create an account on the platform. Signing up for Shopify would require you to register with an email, set a password, type in the store name, fill out some personal details, and start off your dropshipping venture.

After the account is created, the subsequent step is to add the products to the store. This would enable you to see how the store layout would appear, once all the products are added to it.

Next, it is essential to work on the design of the online store. Shopify provides a range of free and paid-for themes for users to choose from. You can find a layout that you find attractive and use it as it is. However, if you wish to make a few changes to the existing theme, the platform gives you full liberty to do that.

To make your store more authentic, you can add a personalised logo to represent your brand. Stores with original logos are able to generate more leads.

After the design is taken care of, you can set up the payment options. This can be done by clicking on ‘Settings’ and selecting ‘payment providers. PayPal would already be selected; however, you have the liberty to choose from a range of payment methods. Once the payment method is selected, you would be ready to move forward with managing transactions.

Following this, you would be required to set the domain name for your online store. The domain name can be purchased via Shopify or through a domain name registrar.

6. Set your Shipping Rates

When you start a dropshipping business, you have the option to charge your customers for shipping, or offer free shipping services to make the store even more attractive. Shopify provides the option of choosing both the services, which can be selected by exploring the ‘Settings’ of your store.

It is recommended for dropshippers to choose the option of ‘free shipping’ at the initial stages of the business, as it would make your business more attractive to customers.

7. Come up with a Shopify Plan

Shopify charges a monthly fee for creating a store. Therefore, once your store is all set up, the next step is to pick a Shopify payment plan. The platform has introduced three different payment plans for its users. These includes:

Basic Shopify: This includes all the fundamental requirements for running an online store.
Shopify: Although this package has a higher price, it features all the elements required for creating and growing your business. Once your dropshipping venture has started, and you wish to expand, you can make a switch to this plan.
Advanced Shopify: Advanced Shopify is the most expensive payment plan. It is ideal for business owners who wish to scale and expand their services.

8. Marketing – the key to Success!

Marketing is the key to success for any store. Shopify provides you with a range of features that you can use to carry out effective marketing. You can combine the tools employed by Shopify with social media promotions, search engine optimisation, and email marketing to increase the popularity of your store. Additionally, the marketing can be influenced by the following tips:

  • Offer discounts to customers with coupons
  • Use advertising credits
  • Take advantage of Shopify’s advanced analytics
  • Use Social Media Marketing to promote your products and store
  • Employ effective email marketing strategies to reach more customers

9. Check Product Availability

As a dropshipper, it is important to keep track of the stock available. In addition to listing, you are also required to be in constant communication with your supplier and keep yourself up to date with the stock levels. Additionally, prior to making the listing, it is essential to make sure that the selected items are available in stock more than 90%. This will save you from the trouble of taking orders that you cannot fulfill. Essentially, with this information, you would only add products that are easily available and ready to ship.

10. Manage the out-of-stock orders efficiently

Even if you lay out a comprehensive plan, there would be occasions when you have to respond to orders that are out of stock. In such cases, it is essential to deal with the situation in an effective manner. You can do this by offering the customer an upgrade of an item that was ordered, for the same price. In this case, you may not be able to earn a profit, however, you can protect the customer relationship, which will increase your earnings in the long run.

Conclusion

Shopify provides complete customisation to its users, which makes it the most recommended platform to start a dropshipping venture. It is ideal for users who wish to use their own website as the primary channel. However, in order to use this platform, you would be required to put in a lot of effort to create brand awareness, increase traffic, bring customers, and improve conversion rates.

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