So, you’re wondering if making money with Shopify is a realistic idea. You’ve seen advertising for the platform and it piques your interest. But, are you really going to make a return on your investment with an online store?
The answer, frankly, is ‘maybe.’ It all depends on how much work you’re willing to put in and how well you research your ideas.
Enterprise sellers are churning millions of dollars worth of products on the platform. And, there are sellers who are making just enough to break even. So, what can you do to start a business where you sell products that actually generate a substantial profit? Here’s what you need to know.
This is How to Make Money on Shopify
You will find a ton of advice online that tells you what products to sell, how to set up your dropshipping accounts and email marketing campaigns. The eCommerce business is flooded with retailers who want to share their stories to let you know how they made it to the top. And, some of this is worthwhile, but it’s not the be-all-end-all of running an online business.
The secret to success with eCommerce is to do your research and treat your store as a serious business. You need to know how Shopify works. Furthermore, you need a business plan, market research, and a killer marketing strategy. With this, you can find outrageous success.
1. Choose Your Preferred Retail Type After You’re Fully-Informed
You can’t just read an article, sign up for your Shopify 14-day free trial and start earning revenue instantly. Before you begin, you need to look into your options and make choose the type of business you want to run.
Here are some of the most popular retail types employed on Shopify:
- Private Label
- Custom Manufacturing
- Dropshipping and Print-on-Demand
- Service Retail (Business Services or Knowledge Commerce)
If you’re interested in one or more of the above types of sales, Shopify could be the right platform to leverage. Many sellers have been successful with each of them.
Honestly, Can You Make Money Dropshipping With Shopify?
A dropshipping business is one of the most desired options for online sellers because it seems like it’s going to be less work. There is no inventory required and shipping is out of your hands. But, is it actually lucrative?
[Image source: Oberlo]
The answer is Yes! There are a ton of sellers connected to Oberlo, Printful, and other fully-automated dropshipping systems from the Shopify platform. Dropshipping can potentially earn you copious amounts of money.
Dropshipping Income Potential Statistics:
- An estimated 22-33% of all eCommerce sellers use dropshipping as their primary order fulfillment method (source).
- Manufacturers who offer dropshipping services earn 18.33% more profits than those who don’t (source).
- The upfront cost for inventory with dropshipping is $0.
These numbers look promising. But, despite popular belief, dropshipping is not “easy.” Know that there are no get rich quick secrets. A dropshipping company is not a passive income source.
In fact, if this is the structure you choose, be prepared for tons of prep work, product testing, potential shipping delays, and customer returns.
Common Problems With Dropshipping:
- Potential shipping delays
- High shipping costs
- Poor quality products
- Lack of customer service
- High return rates
- Difficult to brand
With all of the facts in mind, carefully consider your options. If you’re still interested in a dropshipping store, go for it! But, make sure you keep a close relationship with your suppliers, test your products before you add them to your Shopify store, and be extremely clear with customers about shipping and delivery expectations.
(Hey, more dropshipping advice is coming soon!)
2. Carefully Select Your Product(s)
The next step is to find a product to sell online. And, to obtain the right inventory is no small task. You never want to just walk into a professional venture all willy-nilly.
Instead, do your research. You need to dig deep into your target buyers and potential suppliers to ensure the high probability of a significant return on investment (ROI).
How to Research Target Buyers
Before you start planning your new online store, you need to do some serious consumer research as well. What problem will your products or service solve, and is there a profitable market for this?
For example, if your target buyers are a group of elitists, how many are there? And, is the market large enough for you to justify investing the time to invest in a new eCommerce website, marketing, and content for your store? Or, is your idea going to be a waste of time?
If you can identify a target audience that seems profitable and you have an clever scheme to get your products in front of them, you’re ready to move on to the next step.
How to Research Product Suppliers
When it comes time to select a product supplier, Shopify has a pretty useful guide to help you find the right manufacturer. In a nutshell, they say that you have a choice between domestic and overseas suppliers, both of which have pros and cons. Then, you need to know where to find them (Hint: you start with a Google search).
Once you have a list of leads, you’re going to want to reach out to each of them and request a quote. At this point, you’ll get an idea of what you can expect from the wholesaler or private labeler in the way of costs and customer service.
Keep in mind when communicating with a potential supplier that this is the type of service you can expect later — when you or your customers have issues with the products. So, not only do you need to look for high product quality and affordable prices, you need exceptional service. If you don’t find all of the above right away, keep looking.
3. Write a Structured Business Plan
You don’t want to dive into a new online store without an organized strategy. Even if you only plan to sell dropshipped products on the $29 per month Shopify Basic plan, you need a detailed outline of your idea before you begin. The more energy you invest in prep work, the more likely you are to succeed.
Start With Your Goals
Start with SMART goals. What do you want to attain, when do you want to attain it, and how do you plan to get there?
- S: Specific – Clearly Defined and Identified
- M: Measurable – With the Ability to be Measured
- A: Attainable – Realistic and Achievable
- R: Relevant – Closely Connected to Your Business
- T: Timely – Achievable Within a Favorable Timeframe
Once your goals are in place, you can move forward with the strategy itself.
Then, Write Out Your 7-Section Online Sales Plan
You don’t get to skimp here, even if you’re “just working from home.” In fact, there’s no such thing — a gainful business always takes the tedious yet necessary steps than the unsuccessful ones did not. A business plan is one of these necessary evils.
Structure your business plan with a traditional, seven-step outline, and be as detailed as possible with each section.
- Executive Summary – a summary of the online sales plan makes it easy for someone to understand what your plan includes without the need to read the entire document.
- Company Overview – an outline of your company history, management team, logo, branding, mission statement, slogan, and legal structure. You will use all of this information when creating content and promoting your eCommerce brand.
- Market Analysis – information about the past, current, and projected marketplace conditions. The data in your market analysis will fuel your offering and marketing tactics.
- Products and Services – an overview of the products you will sell on your online store. Include pertinent information about suppliers, costs, pricing, and estimated profits for a 360-degree view of your central offering.
- Marketing Plan – detailed documentation of your forecasted promotional strategy. Use this section as a guideline to make sure your products get in front of your target audience.
- Logistics and Operations Plan – a rundown of the flow of your product or service offering, from the supplier to the customer. Here’s where you’ll put in the majority of your day-to-day work.
- Financial Plan – a comprehensive abstract of your long-term financial goals and a strategy to reach them. Your goals are the heart of your business and should be ever-growing and evolving. As time goes on, continue to aim higher.
The more aspects of your business you map out ahead of time, the better the chances for you to find success. Once your plan is complete, it’s time to buckle down and get things started.
5. Implement Your Strategy and Make Adjustments as Needed
Once all of your ducks are in a row, it’s time to put your strategy into action. You’ve got everything mapped out, and you need to start moving forward. So, start at the beginning and put your action plan into play. And, work your way to the end. But, be sure to leave room for changes to your plan along the way.
A crucial aspect of online sales success you should never ignore is user behavior tracking and reporting. Shopify has built-in analytics capabilities. And, you will use them. But, you should take things a step further.
eCommerce A/B Testing in Shopify
While collecting and analyzing user-behavior is vital, part of your job as an online seller is to make sure users behave the way you want them to (hint: you want them to buy your products). A/B testing is the act of running experiments to see how two variants on a landing page perform in comparison to one another.
For example, sometimes changing the color of a button or moving it to a new location can increase conversion rates. And, the calls to action used can have a tremendous impact. You can find out which elements of your pages should be changed and which should stay the same through structured testing.
GrowthGiant released a case study wherein one website with 600 signups saw a 34% conversion increase by changing only the color of a button. Changing the small aspects of your store can have a big impact. But you need to inform yourself about the right alterations to make by running user behavior experiments.
There are a ton of A/B testing articles online and you should turn to them for ideas.
Final Thoughts
Follow this guide and you’ll be well on your way to Shopify success. Do your homework, your prep-work, and your launch work. Then, analyze your shoppers and make adjustments to your store. And, always aim for higher eCommerce conversions this month than you had last month. If you haven’t already, check out Shopify’s 14-day free trial today and get started.
