How to Make Money on Shopify (2020): Ultimate Guide for Canadian Entrepreneurs
If you’ve spent any time looking for ways to make money online you’ve likely come across Shopify. Headquartered in Ottawa and founded in 2006, the e-commerce company has grown to become one of the largest players in the online space.
Originally aimed at helping small business owners sell their wares online, the company has expanded into areas like dropshipping and marketing. It now has more than 1 million businesses in more than 175 countries using its platform. “Only Amazon takes in more money online, dollar-wise, than Shopify’s sites, which in aggregate brought in more than $60 billion in 2019, $20 billion more than the year before,” writes David H. Freedman on Medium.
With growth like that, you know they are doing something right! The good news is that there is plenty of opportunities to harness Shopify to start your own business and make money online.
If you want to understand how to use Shopify to start your online business, you’re in the right place. This guide will walk you through the process of creating a Shopify business and start making money.
What is Shopify?
First, a little explanation of the company and its product is in order.
Ecommerce for business owners
Shopify’s original goal and the foundation of its’ business is to help business owners sell their products online. Small business owners con process transactions online, track shipping, deal with customers, and even source products. While they have partnerships with some of the biggest brands in the world, they rely on thousands of entrepreneurs who use the platform to power their e-commerce site.
Dropshipping
Apart from helping business sell their products, Shopify also allows you to sell products on behalf of someone else. You manage the website and get customers, but someone else gets the product to the consumer, a process known as dropshipping.
A big component of their offerings as it relates to starting your own business is drop-shipping. We’ll talk about dropshipping later, but it’s basically a way for you to sell products on your site without actually holding inventory. You as the seller won’t have to buy merchandise or deal with shipping it to the customer. Once you make a sale, Shopify’s systems will route the order to the manufacturer or wholesaler, who will then ship the product directly to the consumer.
You worry about getting the customer to purchase and Shopify will take care of the rest.
Of course, that is a bit of an oversimplification.
While Shopify makes it easier than ever to make money on the platform, the reality is that there is a lot of work required to create a profitable and sustainable platform.
How Does Shopify Work?
Shopify’s original and primary audience is small business owners who want to sell their goods online. As such, you’ll see an emphasis on product and order management. Users can manage their products, process orders, and manage customer relations through their web-based platform. You can easily set up an online store and start taking orders quickly.
Out of the box Shopify is set up for someone to get their e-commerce store with their own products but is missing some key functionality you’ll need to get your dropshipping business running, enter apps.
Shopify Apps
One of the aspects of Shopify that sometimes confuses new users is the Shopify App Store.
One of the things that makes Shopify so powerful is the integration with various apps that you can connect to your store. The app store allows you to extend the basic functionality. You can think of it like the Apple or Android app store, or how you need to download a streaming app like Netflix before you can access the platform.
Shopify has developed some of the apps in the app store, but most of them are developed by third parties. By encouraging other companies to develop apps for the platform, Shopify can offer a ton of extra functionality.
Dropshipping apps are one of the most popular integration, as are apps to help your marketing, customer service, store design, and more.
Why Use Shopify?
There are several reasons why Shopify has become the main player for people wanting to make money from their website.
What Does Shopify Cost?
Shopify’s original and primary audience is small business owners who want to sell their goods online. As such, you’ll see an emphasis on product and order management. Users can manage their products, process orders, and manage customer relations through their web-based platform. You can easily set up an online store and start taking orders quickly.
Out of the box Shopify is set up for someone to get their e-commerce store with their own products but is missing some key functionality you’ll need to get your dropshipping business running, enter apps.
The three options include an online store, unlimited products, 24/7 customer support, and the ability to sell via dropshipping. Learn more about the differences in features at the Shopify pricing page.
How to Set Up Your Shopify Store
At the basic level, the steps to creating a profitable Shopify business include the following:
- Source manufacturers, or
- Create products
- Add a dropshipping app
- Find products
- Edit settings and product descriptions, and
- Import products to your Shopify store
Sign up for an account
All you need to get started with Shopify is an email and a business name. Just visit their sign-up page to get started. Keep in mind the free trial starts when you sign up, so you might want to hold off until you have your business plan ready so that you can make the most of the 14-day trial. You won’t need a credit card until you enroll, so you could create an account with a different email address to explore the platform, then when you are ready to get started create the account you want to use.
Once you create your account, you’ll see a menu designed to help you get started. You’ll be asked if you are already selling and your current revenue. You’ll also be presented with a list of industries to choose from, or you can select “I haven’t decided.”
One aspect that is reassuring for newcomers about the platform is that it is built with people who are starting and don’t yet have a business. You’ll be asked if you want help with things like creating a logo, brainstorm business names, find products, and attend webinars.
You’ll then need to provide some information on yourself including name and address.
You can select a plan at this point or start building your store.
Naming your store
One of the first steps you’ll need to complete is to name your store. A lot of the success of your business will be determined by the look and feel of your site, which starts with your business name. Spend some time coming up with a unique business name. Check out Shopify’s tips to naming your store or use their business name generator for ideas. You’ll want something that helps you stand out.
Sell your own products or someone else’s?
The choice that will have the biggest impact on your Shopify business is between selling products you develop on your own (or products you source directly from a manufacturer) or sell products you don’t own via dropshipping.
Either way, Shopify makes it easy to create your store, and you can also offer both on your site.
Selling your own products
Selling your own products is normally more profitable, in part because it’s easier to differentiate yourself. But it requires you to create or purchase the products before you sell them. If you aren’t able to sell them profitably you’ll have to sell them at a loss or even be stuck with them.
One option is to make your own products like clothing, jewelry, or furniture and sell them on your site. Look at what’s popular on Etsy to see the types of products you can make at home and sell online.
The other option is to find someone to make your products. If you want to source products and have them created and shipped to you, you’ll need to find a manufacturer and likely order items in bulk, which will have some up-front cost. How much depends on the price of your product and what your initial bulk order will be.
Suppliers vs manufacturers
Whether selling your own items or dropshipping, you should understand the difference between the manufacturer and the wholesaler.
White vs Private label
Another concept to understand is white vs private label.
Finding and working with manufacturers
Finding the right manufacturers is an important and time-intensive process. You’ll need to research to find someone to create your product and ship them to you or your warehouse.
You can find suppliers by searching on Google, a site like WholesaleCentral, or paying for access to supplier directories. When you find potential manufacturers, reach out and talk to them ask about product specifics, shipping, or delivery questions.
If you are just getting started and don’t have any products, dropshipping allows you to get your feet wet and start making sales without much financial risk.
How to Dropship with Shopify
Dropshipping is how you sell products you don’t own. You make the sale, but the dropshipping company will ship it to the end consumer. Because you don’t need to hold inventory, it’s the simplest and most cost-effective way to make money on Shopify.
The steps for selling product via dropshipping are the same as if you were selling your own products, the difference being you’ll have to find products to sell.
Alibaba and AliExpress
Before we go any further you should be aware of Alibaba and AliExpress because they play a huge role in the world of dropshipping. Alibaba, based in China, is one of the biggest e-commerce players in the world and also operate AliExpress. You can learn more about which is the best for you but at a basic level:
- Alibaba is for business to business, you’ll see lower prices but will usually need to buy in bulk. It’s not great if you are starting with drop shipping
- AliExpress is the consumer-facing portal. Most of the same goods are available there, but because you are only buying one product at a time prices will be higher than if they were ordered in bulk. It’s one of the primary sources for dropshipped goods.
Add a dropshipping app
To do dropshipping on Spotify, you’ll first need to add a dropshipping app from the Shopify App Store. You can think of the apps as the gateway connecting you to millions of products from hundreds of manufacturers and wholesalers. You’ll use the app to find suppliers and products for sale in your online store, then import those products from the app to your Shopify account.
It’s important to understand that the apps are another marketplace to connect you to the supplier. The apps don’t hold the inventory for you, rather they help connect sellers like you to the manufacturer or wholesaler. Most apps will also process your order and forward it to the supplier directly.
One important aspect to keep in mind about drop-shipping is that a lot of the most inexpensive products come from suppliers in China. While the platforms do their best to maintain quality control, the scale makes it a difficult job. If you work with suppliers in China you might need to deal with them directly, with the language barrier being a problem.
We’ll cover some of the apps in a bit, or you can also read Shopify’s guide to Apps for finding products without shipping them yourself.
Physical and print-on-demand goods
When you’re getting started with dropshipping you should think about the two main types of dropshipping apps you’ll see, those for traditional products, and those for creating your unique products via print on demand.
Dropshipping Apps for Physical products
Here you’ll find jut about any product you can think of. From sunglasses to apparel. Many of the products you can find are similar to what you’ll see on a site like Amazon. Most suppliers sell through Amazon as well as through dropshipping.
Note that, while some of the apps are free to use, you might find the free offering a little wanting and need to upgrade to a paid plan.
Apps that allow you to source and sell these physical products include:
Print-on-Demand products
Print-on-demand dropshipping apps allow you to create your own designs and place them on T-shirts, coffee mugs, pens, posters, and more. Because the product doesn’t get made until the order is placed, you don’t need to order them in bulk.
Popular print on demand apps include:
Finding products
Once you’ve added the dropshipping app to Shopify, the next step is to find products to sell. You’ll use the app to browse online offerings by browsing categories or searching, similar to how you can shop on Amazon.
Here are some tips for looking for products.
When you find a product you like, you’ll first add it to your “import list” within the dropshipping app, and will then need to import the product list into Shopify itself.
Edit settings, descriptions
Your product descriptions will play a crucial role in the number of orders the product receives. You’ll want to create your product descriptions rather than rely on what the wholesaler provides. Don’t forget, anyone with a dropshipping account has access to the same products, so it’s key to differentiate yourself.
Think about why the consumer wants the product – what problem is it solving? Use those as your selling points rather than the product features themselves.
Products will include images with them, and you can select which of those you want to use in the liting on your site.
Import products to your Shopify store
After you’ve added the products to the dropshipping store, return to the main Shopify dashboard and import the products to make them available in your store.
Adding your own products
If you are selling your own products the process of getting the products into your store is similar, just add your products through the Shopify interface instead of an app. Include the product name, description, images, and other media, set the price, weight, and other details. You can also include your inventory and as you sell Shopify will track how much you have left, optionally not allowing sales if you don’t have inventory. Once you add a product it will be available in your store.
Pricing your products
Your profit depends on the difference between what you charge the customer and what the wholesaler charges you. When starting, many people suggest setting the price about two to three times as much as what the supplier will charge you to ensure you are earning a profit after paying for marketing. You’ll also want to have a cushion in case you end up having to refund a customer (more on that later).
Set shipping preferences
Shipping plays an important role in the success of your store. When sourcing products, be sure to look at the average time to delivery. To help avoid angry customers, clearly set expectations for shipping.
When you are sourcing products, look at shipping costs. On AliExpress you can limit your search for suppliers with free shipping.
“Free” shipping
One tactic that has worked in some niches is a “free” shipping pricing. When you price your products, you might want to add the price of shipping to the final price directly and then offer the customer “free” shipping. People love free stuff, and being able to offer free shipping can help you gain an edge.
ePacket
When working with shipping, one option to keep in mind is ePacket, a shipping agreement between the governments of Canada, the US, and other, with China and is the most reliable way to ship. As Shopify explains, “ePacket is ideal for Shopify merchants that sell low to medium value items and want to save money on shipping costs.”
The benefits include:
There are some restrictions on ePacket. The length, height, and thickness cannot be more than 36 inches, the item can’t weigh more than 4.5 lbs, and the price can’t be more than $400.
When sourcing apps from AliExpress, the Easy AliExpress ePacket Finder plugin for Chrome lets you find suppliers that offer ePacket delivery and the Oberlo app lets you automatically choose ePacket shipping for all AliExpress orders.
Set Up Your E-commerce Store
With products to sell, the next step is to set up your site to showcase your products. There are a few options here that have important implications. When you create your Shopify account you’ll get a functioning storefront right away, which will be located at www.yourstore.myshopify.com (with yourstore being replaced with whatever you named your store).
That might be OK for your needs, but sooner or later you’ll likely want to set up your store under your domain, like yourstore.com
What Content Management System (CMS) to Use?
If you want to use your domain (more on domains in a bit), you’ll have to decide what to use as your Content Management System (CMS).
The most important decision you’ll have to make is whether you’ll use Shopify to manage your entire site or if you want to use a platform like WordPress, Squarespace, or Wix and add Shopify e-commerce functionality to them. First, let’s cover what a Content Management System (CMS) is.
Content Management System (CMS)
A CMS is how you manage a website. It’s a visual interface that allows you to change the look and feel of your site and is how you create and publish pages. WordPress, which is free, is the web’s most popular CMS.
Recently, paid “website builders” like Squarespace, Wix, and Weebly have been gaining traction as an easy way to create your website. Similarly, Shopify can be the CMS of your site, meaning you’ll control all the aspects of your website and/or blog directly via Shopify.
When creating a Shopify store, you’ll need to decide if you will use Shopify as your CMS or a different CMS.
Startup cost
To host your site with Shopify, you’ll need to purchase Shopify’s $29 plan, at an annual rate that’s $348 a year (although there is a 10 percent discount if you pay annually upfront). To host your site, at the very least you’ll need a domain name and a hosting provider. A domain name will cost you about $15 a year, and hosting will cost between $100 and $150 a year.
Using Shopify as your CMS
If you want to get up and running quickly, using Shopify to manage your site is probably the quicker and simpler route. You’ll have limited options in terms of changing the look and feel of your site, but you can create pages and publish a blog easily.
If you are getting started, using Shopify as your CMS is the easiest way.
To use Shopify as your CMS on a custom domain you can:
Adding Shopify to a CMS
The other option is to create a website using a CMS of your choice and using Shopify’s Buy Button functionality to add products to your site and take payments. When users click the buy button they’ll be taken to Shopify’s secure checkout, which you can put on a subdomain like shop.yourstore.com.
Using a different CMS gives you more flexibility, is relatively cheaper, and (at least for now) makes it easier to integrate with some marketing channels like email. Those benefits come at the cost of a more complicated setup that isn’t as tightly integrated with the products you have on Shopify.
To use a CMS other than Shopify, you’ll need to purchase a domain, host it, and install the CMS. And your Shopify checkout needs to live on a subdomain of your site, or you can use the www.yourstore.myshopify.com instead.
The “Buy Button”
If you don’t use Shopify as your CMS, you’ll have to go to Shopify and create code that you’ll then place on your site. When someone visits your site, the Buy Button code will generate a product listing that can look quite good. You can also use that ad on other websites, including social media.
One of the main drawbacks is that you have limited options to customize how the product listing looks. Additionally, it involves several additional steps to grab the code and paste in on your site.
Tho other option is to create your own product page that incorporates the images from the supplier. You’ll be able to design the page any way you want, and just send users directly to the checkout page through a link.
Shopify Channels
Within the Shopify platform, you’ll also need to manage your channels. Think of channels as the marketplaces where you can sell your items. Your online store is a channel, but so is the buy button, Facebook, Instagram, Amazon, Messenger, and more. You’ll need to set up each channel to take advantage of it.
Merchandise Your Products
With products in your shop, it’s time to showcase those products on your site. Curate your home page and create category pages with product groupings. You’ll also want to modify the product pages themselves to make them as persuasive as possible. Think about how users will be arriving at your site and make sure your landing pages watch their expectations.
You should also round out the website with your about page and customer service and contact info. You should also consider starting a blog with articles that will educate or entertain your audience.
Once your site is set up, merchandising your products and creating website content will be one of your biggest challenges. The quality of your site will determine how long users stick around and whether or not they end up purchasing from you.
But before they purchase, they need to know you exist.
Finding Customers
Finding customers profitably will likely be the most challenging part of running your site. The online space is incredibly crowded and competition can be tough. The key lies in identifying the right niche and being able to target people who are interested in it. Keep in mind that with dropshipping, anyone can sell the same products. It’s how you choose and market them that allows you to stand out.
The sky is the limit when it comes to marketing, but to start most of your marketing will take place on search engines like Google or social media platforms like Facebook.
Search Engine Marketing (SEM)
SEM is incredibly powerful when it comes to finding customers that might be interested in your products. Users are going to Google to search for a specific product, and by being one of the first results they see you stand a good chance to convince them to purchase. SEM is comprised of two related but distinct areas.
Both PPC and SEO require extensive research to understand the keywords and searches users enter into the search engine when performing searches related to your site.
Social media
The other main source of traffic is from social media, with Facebook and Instagram being the biggest players. Just like in SEM, you can pay for traffic or get it organically.
Selling on Facebook
In contrast to using Facebook to send traffic to your site, you can also sell your products right on Facebook. You’ll need to set it up as a channel and connect Shopify to your Facebook account. From there you’ll be able to import your products from Shopify, create a product tab with your offering, and optionally create ads pointing right to the product on Facebook. Because users aren’t leaving Facebook to make the purchase, you are eliminating some of the “friction” involved.
Other social media sites
Facebook and Instagram have the most users and are a good place to start, but you might want to explore your niche’s presence on sites like Twitter, Pinterest, or Snapchat to gauge the opportunity.
Regardless of the platform, with the right type of marketing, you should be able to start getting at least some orders relatively quickly.
Processing Orders
After a customer places the order you’ll see it appear in your Shopify admin where you process it. Remember its Shopify taking the order, not the dropshipper or supplier. Something needs to happen to make the dropshipper aware they need to ship the product.
Customer Service
Another important but often overlooked aspect of a Shopify store comes from customer service. Because you billed the customer’s credit card you are the “merchant of record” and will be who customers come to with issues. If there are issues with the product, you’ll have to handle dealing with the customer as well as the supplier. Most complaints came from the product newer being delivered or the customer being unhappy with it. If you bought the product on AliExpress, they do offer buyer protection within 60 days of the purchase. Make sure you understand how returns and other customer service issues are handled on the specific dropshipping supplier you use.
If a customer is unhappy, it’s often easiest to refund them, offer them a gift card, ask how can you be better.
Dealing with customers’ complaints and suppliers is one of the biggest pain-points when growing a dropshipping business. That is why you need to do your due diligence when finding the product suppliers.
How to Make Money Using Shopify – Pro Tips
Getting a functioning website that accepts orders and gets the products to the customer is just the first step to getting your Shopify store to produce recurring revenue. Creating a thriving, profitable and sustainable Shopify store is a challenge, but one that anyone can master. Here are some tips to help you grow your business.
Make no mistake about it, creating a thriving dropshipping company is not something you can do overnight. You can get up and running and experimenting quickly and inexpensively, but to be profitable will require a lot of work. The good news is that it’s not difficult, but it does take time and effort.
