Professional Documents
Culture Documents
(English) How Shopify Dropshipping Works (DownSub - Com)
(English) How Shopify Dropshipping Works (DownSub - Com)
You're seeing companies going public now just based on this premise of
dropshipping.
The model relies on targeted ads designed to stop consumers from scrolling
long enough to make an impulse purchase, usually from a Shopify store set
Many of those same younger consumers, they are also looking for creative
ways to make money.
It's like salesmen. Salesmen are like the old school version of marketing.
At age 21, Ka mil Sattar's dropshipping sales topped 1.7 million dollars in
2020.
You basically only buy the product when you get the payment.
And then you get the product from a supplier in the U.S.
or China. Then they send the product directly to the consumer and you
never see it or never touch it.
Others call it a serious business that takes major hustle to pull off
properly.
There are more nefarious actors in this industry and there are legitimate
ones.
We talked to some big name dropshippers about how they made millions with
viral products and asked e-commerce experts how copycats and cutting
If you have a supplier you can trust, you can do the quality control with
the supplier.
They can send me pictures of it, 3D video of it so that I can see exactly
how it looks.
After a customer places an order on Peroni's Shopify store, he purchases
the product from the supplier and has it shipped directly to the customer,
If you find products that are unique enough, then people are generally
willing to wait.
Take this laptop sleeve that I ordered on June 30th last year.
It shipped directly from China and took two months to get to California.
Products where it takes 30 days, 60 days, even 90 days to even get to you.
Where people really tend to get annoyed with dropshipping is if they waited
for two weeks and then they get their product and it sucks anyway.
I ordered these boots on October 28th last year and they arrived December
7th.
And when they did finally get here, they came in this ripped bag from
China Post and they were stuffed loosely inside.
They smelled pretty awful and they were the wrong size.
I thought about returning them, but returns with dropshipped items from
overseas can be pretty complicated.
I looked for a customer service number on the store where I bought these
and I couldn't find one and I opted not to return them because I would have
The product is aligned with you, aligned with your interests, and you want
to buy it.
So you buy it. And it does not match up at all to the product you're
getting.
Bradley Sutton provides software for Amazon sellers and he test ed out
dropshipping in the 2020 holiday season.
He sold things like RC cars on his Amazon page, dropshipped from cheaper
listings on Walmart and elsewhere.
Part of Amazon's dropshipping policy is that you do not deliver with
packaging t hat is from another retailer.
But my account didn't get shut down, I grossed over $500,000 dollars, but
I've kind of stopped that test because it's just not a sustainable model
for me. Amazon has a long-standing policy against dropshipping from other
retailers.
And a spokesperson told CNBC, "If a seller violates our policy, we will no
longer allow them to directly fulfill customer orders."
So you have Shopify, you have BigC ommerce, you have WooCommerce, you have
Amazon, you have eBay.
And if you get banned on one platform, you can move up to the next one.
The dropshipping that fills social media feeds isn't happening on Amazon.
It thrives on Shopify.
The main advantage of dropshipping is that you don't have to worry about
storing, packaging, or shipping your products.
small businesses. You want to support the local mom and pop store, but
these s ellers are not from the United States.
They're from around the world and they're just utilizing this to make a
buck.
Still, Shopify is home to the online stores of major brands like Heinz,
Staples, Jenny Craig, and Gymshark.
With more sellers than ever before signing up for a Shopify storefront in
Q3 last year, Shopify shares more than doubled in 2020, and its market cap
Thirty five percent of young Americans started a side hustle during the
pandemic.
Most of them are doing it on Shopify, which is why you saw more signups in
Q3 than ever before.
These young consumers are going to be the shopkeepers of 2021, and the way
they buy is going to be the way they're going to sell.
We're going for impulse buys with people that are not necessarily intending
to buy something when they log onto Facebook or Instagram.
Sattar sells 80 to 90 percent of his products through Facebook ads and the
rest largely through ads on YouTube.
T ikTok ads can now play directly within Shopify stores, following a
TikTok-Shopify partnership announced in October.
I always say to people, you're going to test around about five to ten
products until you find something that actually does something.
This pineapple slicer and these dog grooming gloves are examples of
products that flopped for Sattar.
It's all about finding things that people haven't tried before.
We have softwares that we use where they do AI technology and they tell us
what are the best products at the moment, what's trending.
Soon after, another one of his items did a million dollars of sales in one
quarter.
Many dropshippers find products like phone accessories and Bluetooth
headphones on Al iExpress, a China-based online marketplace where small
And the same thing happens with things like blankets, lighting, small
plastic electronic accessories.
It's wonderful.
The supplier will directly ship the product to the customer without it ever
going through me.
You will see domain names called Official Burrito Blanket, Real Burrito
Blanket, The Burrito Blanket.
And they basically contacted the factory in China and started dropshipping
burrito blankets.
And now these burrito blankets are being sold on dozens of different
websites, all powered by Shopify.
CCO Niran Chana says he's seen more and more copycat dropshippers selling
knockoffs.
A lot of these brands have to, you know, legally fight these clones that
are just ripping them off.
on their own. You know, we put a lot of investment into assets, content,
etc, as well.
When people are abusing those brand rights, they have the right to be able
to say right, we're going to pull this site down.
A Shopify spokesperson told CNBC, "We have multiple teams who handle
potential violations of Shopify's Acceptable Use Policy, which clearly
outlines the activities that are not permitted on our platform, including
copyright infringement.
And it was 2016 when I first heard about this dropshipping idea.
You know managing just the supplier and managing the customer, and then
managing marketing, these are completely three different skill sets.
Alls you gotta do if you want this car, go to Shopify, hit "start free
trial", your free 14-day trial, go to Facebook, hit "create campaign" and
boom, you got. It's unfortunate that a lot of people think that this will
make them rich.
It's just the next snake oil salespeople doing the same thing that has
been happening in ancient history.
They're just doing it right now with a completely different weapon, which
is dropshipping.
There are very few laws and regulations around dropshipping, but if it's
done carelessly, it leads to months-long shipping times, unvetted products
A lot of people, they get into the business model and they're lazy.
They're not looking at it like a business, t hey're looking at it like a
cash grab.
To keep shipping times down and quality control up, big dropshippers use
agents who know the supply industry in China and a sourcing company to
speed up the shipping. But that all costs a lot, as do some extra tactics
used by less savory dropshippers.
You buy fake reviews to distinguish yourself, fake ratings, fake upvotes.
Profitable sellers usually charge at least two or three times the price
they paid for an item on Al iExpress.
It's going to be a cat-and-mouse game between Shopify and a lot of the more
fraudulent dropshippers.
If you have really good customer service, like you're getting back to
people within 24 hours and giving them tracking updates, that is what 90
And people that are doing it legitimately, like myself, are offering
refunds.
Do they have a phone number? If they don't have a phone number on their
website, then you know for sure that they've got something sketchy to hide.
And for those looking to make millions in the current online shopping
craze, some say dropshipping should only be the first step in creating a
It's there to let you know that what you're trying to sell does get a lot
of customers.
Once you know that, then go and take the next leap, which is buy them in
bulk, get a fulfillment center.
So we've actually got real brands now all done in-house by us, and that's
the long-term game plan.