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The Ultimate Guide to Dropshipping

310 points| allsop8184 | 13 years ago |ecommerce.shopify.com | reply

55 comments

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[+] kitcar|13 years ago|reply
Out of curiosity, if drop shipping enabled you to quit your job in finance a few years back (http://ecommerce.shopify.com/guides/dropshipping/about-the-a... ) , why are you now 'giving away your secret sauce' by running a website dedicated to teach people how to setup "copycat" businesses?

Is it that the drop shipping business has gotten so competitive that there is more money in teaching people about it than the business itself, or were there other reasons?

[+] allsop8184|13 years ago|reply
I'll have to let Andrew, my co-author, speak on why he left the corporate world to start his ecommerce blog.

But I can share why I decided to write this. I noticed that most, if not all of the information on drop shipping is bullshit. The topic is riddled with scammers looking to rip you off.

A few months ago I published a guest post about drop shipping on my company blog. It was written by my co-author. It was very well received... seemed there were people out there starving for good information on getting a drop shipping business up and running.

I bought every print and ebook on the subject, read most articles I found online on the topic, and quickly realized that we could probably write something way better. So we did. I hope! :P Anwyays, that's it... just published it today and can't wait to get feedback on how to improve it. Once we polish it up a bit, I plan on releasing an eBook so people can read it on their Kindles and what not. If you read it Kitcar, I hope you enjoy!

[+] spiredigital|13 years ago|reply
Co-author here, and a totally valid question! I started my blog about eCommerce / drop shipping for a number of reasons:

1) To expand my professional network and opportunities

I just finished co-writing a book with Shopify on drop shipping, which is something I never would have had the opportunity to do without the blog. It's allowed me to build credibility and expand my network.

Additionally, the blog allows me to reach out to really interesting people when I otherwise wouldn't be able to. For example, I recently interviewed Gary Vaynerchuk - something I never would have been to do without leveraging eCommerceFuel.

2) To connect with other eCommerce entrepreneurs

I've had the chance to connect with hundreds of other eCommerce merchants and share strategies and tips. I eventually hope to build a really vibrant community for small eCommerce merchants (as I think that's lacking online), and this is helping me accomplish that.

3) To eventually diversify my income stream with something new

Like all entrepreneurs, I think the desire to try new things is strong - especially after you've been doing the same thing for a while. I saw the blog as a way to create another income source that leveraged the experience I have.

While one of my eventual goals is to make money from the blog, my first priority is to keep the content extremely high quality, genuine, authentic and USEFUL. I wanted to give away a ton of useful information before I asked for anything in return.

Take the eBook on my site, for example. I spent 2 weeks solid writing it and I give it away for free. If you download it and don't think it's one of the better free resources you've come across online just let me know and I'll send you $20 via PayPal for wasting your time. :-)

4) To dispel the the idea of "easy money" online

You asked why I'm teaching people to setup "copycat" business, and I'd argue I'm doing nothing of the sort. 80% of success with any kind of business involves the execution and strategy - and not picking the perfect niche or having some "secret" sauce.

If Alexis Ohanian released a killer guide to programming in Python that doesn't mean someone is going to be able to create a Reddit copycat... ...at least one that will successfully compete with them. Also, just because someone is sharing their knowledge and/or tactics doesn't mean that their original project is no longer viable. It simply means they're interested in sharing their experience.

If building a profitable drop shipping business was an easy 48-hour project, I'd be less likely to share so publicly - you're right! But just like any business, it takes a lot of hard work. The knowledge is important, but the legwork is really what makes it difficult to implement.

I completely understand your skepticism as the online business space is full of scams. But hopefully if you invest a few minutes reading our guide, and my blog (http://www.eCommerceFuel.com) you'll realize we're committed to publishing quality, useful content and not trying to rip people off.

Let me know if you have any questions - happy to answer them.

[+] robryan|13 years ago|reply
I don't think drop shipping is really something where there are a small set of secrets an in crowd are operating on that anyone can come along and easily replicate. So I don't think more information is really going to effect current players that much.

Without reading the guide I would assume it doesn't tell you exactly which product you should sell and guarantees that you will be able to do a deal for someone to supply you that product. That is a large part of it, not really bigger though than any startup doing a key deal with another company.

From there you face many of the same challenges as any tech startup. Functioning and easy to use technology, effective and positive ROI marketing and great customer support.

[+] callmeed|13 years ago|reply
Your guide looks really good, but you're definitely correct in your 1st paragraph: when I hear "guide to drop shipping" I immediately think back to the days of "MAKE THOUSANDS FROM HOME SELLING PRODUCTS ON EBAY" ... it has a bit of a snake-oil perception to me and I'm glad you addressed that right away.

My wife started an Instagram printing business (http://cheergram.com) a few months ago and it's going very well. All products are dropp-shipped from our partner lab so I know it can work.

I haven't finished the guide yet, but so far it looks really good.

[+] allsop8184|13 years ago|reply
Thanks so much. Part of the reason I decided to write this guide with my co-author Andrew is there's so much bullshit out there regarding drop shipping. It's really bad.... and if you go to Google to learn more about the topic I'm afraid most results are scams. I wanted to change that. Shopify was gracious enough to give me the time out of my regular duties to pursue this project and I'm really happy with how it turned out. Tell your wife Cheergram is awesome, and a huge congratulations for getting her drop shipping business up and running! Happy reading callmeed - I really hope you enjoy the rest of my guide! :)
[+] mrchess|13 years ago|reply
Would love to get a PDF version of this. I'll make one once I get home but if someone beats me to it... ;)
[+] allsop8184|13 years ago|reply
I just launched the online version today so I haven't had time to make a PDF yet. But yes, I'll definitely get on that ASAP. Glad to hear you think that would be useful mrchess.
[+] patrickk|13 years ago|reply
Instapaper- PDF print each page.

You'll have sub-par formatting, and will have to combine the PDFs yourself though.

[+] sabat|13 years ago|reply
Yeah, +1 on that idea. PDF would be really nice.
[+] charlietran|13 years ago|reply
Great job! One typo in Chapter 3: "drop hipping" (though that would be a cool name for the official Shopify dance)
[+] allsop8184|13 years ago|reply
Haha drop hipping sounds awesome. I think I'll just keep that there as an easter egg. :-)
[+] sachingulaya|13 years ago|reply
This is especially ironic considering shopify does not offer dropshipping. I've had multiple people inquire about dropshipping our products but we've never been able to make it work.
[+] rexreed|13 years ago|reply
And they link to a specific inventory management system which is expensive and isn't tailored for drop shipping when there are other alternatives, at lower price, in the Shopify app store.
[+] terrellm|13 years ago|reply
This guide has some great information. A dropship commerce store can be a great complement to a software company if you are able to integrate a company's products in with your software.

My wife and I develop a cattle management software called CattleMax and began operating two dropship e-commerce stores several years ago. Our stores help us offer customers a full solution (identification + weighing/measuring + management software) and also provide a nice supplement to our SaaS revenues.

Our first store, The Cattle Tags Store (CattleTags.com), sells cattle identification supplies including visual ear tags and RFID tags & readers. Our software is useless of the rancher hasn't identified his or her cattle, so good identification is important.

Our second store, The Cattle Scales Store (CattleScales.com), sells digital weigh scales designed for weighing livestock. It is a natural fit since our software can import weights from the scales and these scales also integrate with the RFID readers we sell at The Cattle Tags Store.

In the beginning, we were hesitant to create the stores but got through that hesitation by saying "OK we will try it out for a few months".

[+] refuteit|13 years ago|reply
Dropshipping = Chargeback risk that you can't control.
[+] jetti|13 years ago|reply
The amount that you save on inventory and warehousing could offset that risk. Plus depending on your niche I would imagine that the risk varies.
[+] xlevus|13 years ago|reply
I'm not entirely sure if it's still classified as dropshipping.

But I've been told that some postal services (e.g. NZ Post) are able to provide dropshipping like logistics for you.

e.g. You manufacture your product in China. The postal service will then manage logistics for you from factory to your customers.

[+] jes5199|13 years ago|reply
okay, I've never heard the term "drop shipping" before and I read the entire intro page and I still have no idea what it is. I guess you plan to tell me in Chapter One, but that's a lot more commitment than I want to make when I have no idea what you're talking about.
[+] spiredigital|13 years ago|reply
Good feedback - we'll have to incorporate this into our 1st round of revisions.

Drop shipping is a fulfillment model where a merchant doesn't carry any inventory. Instead, they only purchase an item from a wholesaler when they receive an order from a customer. Then, they have that item shipped directly from the wholesale warehouse to the customer.

It allows a merchant to start a store without having to invest up-front in inventory, and without having to manage a warehouse.

[+] pan69|13 years ago|reply
"Dropshipping is a retail fulfillment method where a store doesn't keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product."

First paragraph after the introduction. I mean, this paragraph could probably be written in a gazillion different ways but to me this pretty much explains what Drop Shipping is..

Edit: It seems that this paragraph was added later. :)

[+] allsop8184|13 years ago|reply
Really good feedback, thank you. We will add a quick definition in the introduction page.
[+] cm2012|13 years ago|reply
As a manufacturer who drops hips for online sellers, this is a pretty god guide (jewelry)
[+] cm2012|13 years ago|reply
Embarrassing number of typos made on train home yesterday. Can't fix now, but good reminder to proofread when tired.
[+] arbuge|13 years ago|reply
I just read the section of your guide about finding suppliers. So you recommend supplier marketplaces like Doba? I've heard alot of strong opinions either way on them. Is the pricing you can get there really competitive? Most of their clients appear to be really small mom-and-pop online stores.
[+] spiredigital|13 years ago|reply
DOBA's interface can be convenient because they integrate seamlessly with big suppliers, but they have a limited number of end-suppliers and the service is more expensive. So while I'm sure some people have used them successfully, I think starting from scratch there are more compelling options. I've never used them, however, so I can't speak from personal experience.

If you can find and work directly with your suppliers, that's preferable. Next best is going with a directory like World Wide Brands if you're struggling to find suppliers or need a solid brainstorming tool. Instead of serving as the go-between, they simply connect you directly to suppliers via their listings. Additionally, they'll have a larger selection of smaller niche suppliers which is where I see people have the most success with drop shipping. I've used WWB for years and they're a good source for legitimate wholesaler suppliers.

Full disclosure: I've been interviewed / posted on the DOBA-affiliated blog to promote eCommerceFuel.com as they have a well-known blog in the drop shipping space.

[+] terryb100|13 years ago|reply
I work at a Wholesale supplier and he pretty much nailed the 3 points regarding the Google searches.
[+] themonk|13 years ago|reply
Is right supplier best kept secret in dropshipping?

It would be nice if you can provide at least one supplier for any product you wish, this would give us fair idea about suppliers.

[+] kentwistle|13 years ago|reply
Does anyone have any experience with pixmania-pro drop shipping? I am specifically looking for a merchant that sell automated vacuum cleaners. (iRobot / Samsung)
[+] timtamboy63|13 years ago|reply
Very awesome. Might be worth adding ecommhub.com in there somewhere - makes life a hell of a lot easier for a drop-shipper :)
[+] swib|13 years ago|reply
Thanks for the mention :) I'm Kurt, founder of eCommHub. I think it was an editorial mistake, so hopefully we'll get included in the guide soon.

Just to give others some background, we started as a Shopify app a few years ago, so our whole platform is built around dropshipping (with Shopify). eCommHub helps with automating the inventory management and order processing, which can otherwise be quite manual and tedious. Some of our clients are automating as many as 5,000+ orders per DAY through Shopify using eCommHub.

Anyway, this truly is the ultimate guide on drop shipping, so congrats to Mark and Andrew for putting together such a great resource!

Here's our app listing if you're interested in checking out more: http://apps.shopify.com/ecommhub or http://ecommhub.com

[+] spiredigital|13 years ago|reply
Agreed! I love eCommHub, and use them for one of my sites. Kurt and the team over there are great and have built a solid service. Hopefully we can get them included.
[+] DenisM|13 years ago|reply
Could you make it into a kindle book please? 9.99 looks like a good price to me. Thanks.
[+] maaku|13 years ago|reply
Gonna burn karma here but... I read the title as "The Ultimate Guide to Dropshitting" and realized I have a great new name for 2HWW-inspired fly-by-night fulfillment companies :)