Shopify Review: Is Shopify The Best eCommerce Platform for Drop Shipping?
Shopify Review: Is Shopify The Best eCommerce Platform for Drop Shipping?
I've spent the last decade selling things online. I've been through a lot. I've used all sorts of eCommerce platforms like eBay, Amazon, eCrater, Bigcommerce, Volusion, Woocommerce/Wordpress, but my favorite is Shopify.
Best eCommerce Platform for High-Ticket Drop Shipping
When you are just starting out, it's best to start with an eCommerce platform that's free to use and only charges you when you make sales. eBay, eCrater (an eBay alternative) and Amazon Seller Central are such platforms. You can simply list products on their marketplace and when you make a sale, you pay a percentage of the sale price as a fee. Fees range between 3%-15% depending on the platform. eCrater charges just 3%, whereas eBay charges 9% (plus the 2.9% for the Paypal fee) and Amazon charges 15%. They all offer the ability to create your own "store" on their marketplace for an additional fee, but that isn't required when you're just starting out.
Marketplaces vs. eCommerce Platforms
Beyond these marketplaces that charge big fees, there are eCommerce platforms that offer self-hosted services. When I was first starting out, I realized that high-ticket drop shipping offered me close to 20-30% gross margins and 5-20% net margins per sale, so giving up 3-15% margins was simply not going to be profitable in the long run. They would be nice as a way to make sales with the same products I was selling on my own store, but definitely not as a sole source of income. I also realized that building my business in someone else's marketplace was not a good idea for the long-run.
Self-Hosted eCommerce Platforms
I decided to set off on my own and find a self-hosted eCommerce platform that could support all my needs as an online retailer and also not take any percentage of my gross sales, but instead charge me a simple monthly rate to use their software. With high-ticket drop shipping, the margins are high enough that with each sale of $1,000-$5,000 (or more) I can make $200-$1,000 per sale which would more than pay for the $30-$50 per month fee most of the platforms charged.
I did a lot of research in the beginning and played around with a lot of different platforms. eCrater was the first platform I started with and I'm glad I did. It's similar to eBay, but in the beginning, they didn't take any fee. Back then, they monetized by placing Adsense ads in your store which obviously isn't great for conversions lol...
...But the greatest thing about their platform is they use Google shopping ads to drive traffic to your listings as long as you supply them with a barcode and SKU number. I was able to make my first few sales on eCrater and even make a few hundred bucks in profit each month. Basically, at that time, it was kind-of like Shopify is now.
Sometime around 2012, when I had scaled my first high-ticket drop shipping business past $70,000 in sales per year, I started looking for an eCommerce platform that I could own 100%. I knew that even though eCrater was nice to use, it wasn't my platform. I couldn't control how they designed the front end. I couldn't turn ads off (which you can do now by paying them extra) and I didn't own my store. They could kick me off their platform at any time without any prior notice, it's in their terms and conditions.
My Experience with Wordpress and Woocommerce
I started to look around and I found Woocommerce. It was based on a new platform called Wordpress which was actually a piece of software that was open-source, meaning no-one outright owned or controlled your version of it, you can change it however you want without anyone's permission, and I could install it on my own hosting account so that I would own it 100% and never risk getting kicked off.
I made the switch right away and started figuring it out. The first that that drew me towards it was that it was free to install. However, I soon found that you had to purchase a lot of additional extensions that WooThemes sells to make it fully functional for online retail. As an example, you have to buy an extension to be able to input tracking information and send it to your customer. They left that out of the initial install. Each extension costs between $50-$150 and I got quite a few. I probably spent close to $500 to get all the bells and whistles I knew I would need to build a professional eCommerce store experience for my customers.
I used Wordpress and Woocommerce from mid-2012 up until early 2015 when I sold my first high-ticket drop shipping eCommerce store for $50,000. I was introduced to Shopify at the Agenda Show in 2014 (a lifestyle apparel and skateboarding trade show) in Long Beach, CA. Shopify at the time was still fairly small and worked best with small brands, but they were quickly acclimating to the big online retail market the exists.
Shopify vs. Woocommerce
I liked their platform the moment I used it. It is FAST. Everything I do on Shopify takes just moments whereas with Wordpress, waiting for a page to load can take a long time which kills my productivity. Besides that, Shopify comes built in with everything you need to provide a professional shopping experience for your customers without any added costs, plus the only cost was $29 a month and the transaction fees from Stripe or Paypal.
The Shopify themes were also a big selling point for me. I was used to really crappy Woocommerce themes that looked like a website from the mid-90's, whereas the Shopify free themes looked like a new website and they worked FAST. Customers could load a page in less than a second which is 1/10 of the time it took my pages to load on Wordpress and Woocommerce.
I initially tried to migrate my website from Wordpress to Shopify mid-2014 but didn't know enough about SEO or URL redirects to do it properly. I fumbled and lost a lot of sales in the process, but I switched back and almost instantly regained my traffic and rankings which brought back my sales.
The experience taught me to do my homework first, but also to start with an eCommerce platform that could supply me with all my needs and not just go with the cheapest solution.
Lastly, a huge benefit of Shopify that I appreciated from the very start was having the SSL security included in the monthly cost. This is usually around $79 a year with Godaddy, so I had to pay extra beyond my yearly shared hosting fees just for security.
Case Study: How I Doubled My Yearly Revenue from $300,000 to $600,000 By Switching To Shopify
I started our next store on Shopify and built it out up to a point, but didn't understand how to optimize it very well or how to drive targeted traffic since Shopify didn't have any built-in connection with Google Shopping Ads back then. So, I closed down that store, started a new one, had the same issue again, closed that one down again, lol...
Then, in Spring of 2016, I signed up for an online coaching program where I learned how to optimize my website for conversions and drive targeted buyer-intent traffic through Google Shopping ads. It gave me enough knowledge and impetus to start a new store in a trending and high-ticket niche, get the best drop shipping suppliers, drive the traffic that would buy, and provide a professional shopping experience so buyers would place their orders 1-3 times a day, almost every day.
This time, I learned a lot more about Shopify than I did before. I learned that they have a huge theme library and app store, both of which provide you every way possible to provide the best shopping experience for your customers. I set up my whole sales funnel from my leads list to my abandoned cart series, and my post-purchase upsell campaign using Klaviyo.
I was able to achieve a $20,000-$30,000 monthly sales volume on a regular basis and maxed out around $70,000 in sales summer of 2017. Overall, we did about $650,000 in sales in 2017, whereas our biggest year with Woocommerce, 2014, we did around $300,000 in sales.
Average profits were around 10%-20% after all expenses, so you can do the math. Shopify gave us a really easy platform to use to make sales online and keep our customers happy.
Shopify has evolved a lot over time. They now have tons of different marketplace options to sell through and they even have a connection with Google Shopping now (in 2018) finally! However, I still use my recommended Shopify apps that have much better integrations.
If you're trying to consider whether to start with Shopify, I can highly recommend it for anyone who knows what they are doing with driving traffic or is willing to invest in a coaching program that teaches using Google Shopping ads to drive targeted buyer-intent traffic to product listings.
What Is Shopify and How Does Shopify Work?
Shopify is simply a managed hosting eCommerce platform that allows you to set up a professional eCommerce store to sell any type of product (physical or digital), service, or membership program. Shopify's managed service work in a crowd-funded way in that if one store gets more traffic than another, Shopify servers put more bandwidth to that specific server and pull it from other servers that aren't using it. It's a very unique and wonderfully constructed system that makes it so that downtime is very very uncommon.
Shopify has many other amazing features and benefits. I'll go over some of my favorite features and why they are so important to my online business below.
Features and Benefits of Shopify
Shopify has tons of awesome features that can benefit you far beyond what you actually see on the surface. Here is a list of my favorite features of Shopify.
- Free professional themes so you can set up a good looking store fast and easy.
- Fully customizable online store so you can tweak anything, add or remove features, or create custom features whenever you want to.
- Unlimited products so you can scale as big as you want to.
- In-depth reports so you can track sales and growth trends.
- SSL included so you can have a secure store without any added costs.
- Shopify integrates with Stripe, Paypal, and other big payment processors without any additional apps so you can easily accept payments.
- Automation for fulfilling orders is built in, even sending emails to suppliers with purchase orders, so you can spend your time doing marketing and sales, not sending in purchase orders.
- Built-in internal communication system through order comments so you can easily communicate with your team and follow up on orders.
- Tagging for orders and customers so you can follow up with leads, close sales, and follow up with customers and suppliers to ensure full customer satisfaction.
- 24/7 customer support via phone, live chat, or email, so you can get any problem solved any time of day or night.
Here is more about the features of Shopify that I really, really, really like the most.
My biggest quarrel with using Wordpress was my hosting. I had a shared hosting service with Godaddy that was cheap and had a lot of on-going issues. Once a month, on average, my website would go down and I needed to hire a developer to figure out why. Sometimes it was due to Wordpress plugins that didn't play well with others, but sometimes it was due to some change in my server files which I didn't make. Maybe my hosting got hacked or something, but none-the-less, I never figured out why it was happening and to be honest I was happy to sell it and move onto another project.
Shopify is a managed hosting platform which means that they take care of the servers upon which the information and database for your website are stored. This is my favorite part about using Shopify because no longer do I have to deal with my server going down or the website crashing. With Shopify, I can focus on growing my business instead of putting out fires all the time.
Shopify Customer Service
Shopify also has 24/7 customer support which I use whenever I need help with a custom coding issue. Their developers know their code, liquid, inside and out and can even go into your theme with you to help you resolve issues, as long as Shopify supports it. They're super friendly and always do a great job.
Shopify's Unique eCommerce Platform
Their platform is a little different from using woo commerce or big commerce in that categories are called collections, and setting up navigation menus is a little tricky to figure out at first. The greatest thing about Shopify is they have a thriving community of developers and entrepreneurs who contribute to their app store, forum, university, and theme store. Shopify also has tons of educational content in their blog which is all free.
Shopify Payment Processors
Shopify links up with Stripe for payment processing. Stripe is a very popular payment processor because of their ease of use and one flat fee. Thanks to their integration with stripe, the setup process takes less than five minutes. Other checkout options are available like PayPal, Amazon, financing providers like Klarna, and even bitcoin, but a credit card is still the most popular payment method on our websites.
Shopify is the only platform that I use now. It's my favorite platform to use and I highly recommend it. If you're just starting out, I recommend that you start learning about which products are profitable.
How Much Does Shopify Cost?
Shopify is very cheap compared to other eCommerce platforms. For only $29 per month, you can have a fully built and optimized eCommerce store. There are tons of apps that will add functionality to your store that cost a monthly fee, so I usually end up spending $100-$200 per month in total for all the included apps, but to make many thousands per month in profit and not have to deal with the headaches of self-managed hosting, it's well worth it.
Would I Recommend Shopify?
Yes. I only use and recommend Shopify for setting up eCommerce stores. I also use Shopify to run the blog and eCommerce store you're on right now. I sell my coaching and done-for-you services here as well as merchandise and apparel in the future. You can browse around my site and see what you like about it.
How to Install and Setup Shopify
Shopify is very easy to set up. Simply click my referral link to get your free trial store, then enter your information and your store is set up. You can choose your free theme, free apps, and start adding products and setting up your collections immediately. You can add pages, blog posts, and even process orders right out of the box without any additional costs.
eCommerce Paradise was created by Trevor Fenner of Seattle, Washington in 2015 to help you, the entrepreneur, to start and scale your own eCommerce business. Trevor owns multiple 7-figure eCommerce stores and is a digital nomad, traveling the world while working remotely with the help of his team of virtual assistants from around the world. Trevor is currently located in Bali, Indonesia, and is a passionate skateboarder, surfer, scuba diver, photographer, environmentalist, outdoorsman, fitness and tattoo enthusiast.
AFFILIATE DISCLOSURE: Some of the links on this page may be affiliate referral links. I will get a commission from the vendor when you make a purchase after clicking them at no added cost to you. As a result, many of them also provide you with a special discount just for using my link. You can go directly to their support if you have any issues with their software or product.