How to Lower Costs And Increase Sales in Shopify Dropshipping Store
Kateryna Tytarenko, SEO Specialist in Multi-Programming Solutions • 9 min read
One can hardly find sellers who aren’t willing to open successful dropshipping stores. All the entrepreneurs want to build a profitable business, providing issues that can grow demand and reduce expenses wisely, not influencing the quality and clients’ support. At first sight, it seems like there are not too many things to save on when it comes to dropshipping selling models. But we ensure Shopify store owners: plenty of cost-cutting methods don’t negatively impact the goods’ quality and save customers’ satisfaction and loyalty.
A few minutes to read, and you’ll understand the vital steps to boost Shopify sales channels while lowering your budget.
Table of Contents
Cutting costs on Shopify: reasons, types and risks
To cut costs means to reduce expenses that an online shop faces while providing dropship fulfillment. It might be surprising, but more than a dozen operations requiring money investment can be reformed or even excluded. Effective financial management prevents entrepreneurs from extra budget and allows them to switch from savings to innovations.
Reasons for cost cuttings
There are several causes and effects of the shop expenses revision. They describe ways to establish sales economics and perform more productively:
- Decrease financial pressure. Managing dropship Shopify stores requires costs. They are lower compared to brick-and-mortar biz but can cause stress. Cutting the most significant expenses excludes the excessive operating charges allowing to build a successful selling channel step by step.
- Dealing with unforeseen circumstances. Sellers are more organized facing hard-to-predict occasions. For example, they can provide additional product promotions, improve loyalty programs, and boost dropshipping Shopify sales while facing a new strong competitor.
- Increase margin. Every business goal is to become profitable. Cost cutting elevates income significantly, and vendors save more budget money even not widening goods assortment or customer base.
Before starting to cut costs here and there, it would be helpful to know how they differentiate. Some expenses are inevitable and directly related to product quality. Therefore, entrepreneurs should weigh whether reduction affects customers’ satisfaction.
Types of cutting costs
Although not too much money is needed to start dropshipping on Shopify, expenses are integral to enterprise development. Defining costs, merchants can divide them into three
categories according to the benefits they bring:
- ‘’Good’’ costs. Such expenses are the ones you can’t get away from. They can be deficient compared to the advantages they bring. For example, devices and Shopify sales tools allow operating an online store at the fingertips, internet bills, etc.
- ‘’Bad’’ costs. These are expenditures that significantly cut profit and should be optimized. It’s like a subscription to e-Commerce stores, filled with a meaningless set of clickable ads.
- ‘’Best’’ costs. It’s the most successful money investment in your business growth, which, despite its high value, increases Shopify’s sales percentage and is good for profits. These are expenses store owners should keep because they make the weather.
When looking for costs to reduce, you should not rush to cut them immediately. First, learn what difficulties you may face with an unweighted choice not to question later “why my Shopify store is not making sales”:
- Lowering product quality. Changing a supplier to a cheaper one can significantly impact the stuff characteristics, which an end customer may not support. So you risk losing clients’ loyalty and reducing income.
- Decreasing efficiency. While you cut working hours or fire a business assistant to control expenses, you may experience a lack of management time. As a result, some essential tasks or clients’ orders can become unprocessed, affecting the brand's reputation.
- Cutting sources of business prosperity. If merchants decide to remove expensive operations, they must check whether they are not the key ones for scalability. Thus, influencers are also expensive, but they will likely bring your biz to the level of the best dropshipping stores in 2022. So breaking their contracts may do considerable harm to traffic.
Then which costs may one cut wisely if a dropshipping price calculator shows low income with huge expenses on the selling business management? The MPS editorial board proposes ten ways to choose from, so you can apply several for your case.
10 proven strategies to lower retail expenses in dropship store
We know how hard it can be to cut costs. But this optimization is vital for maximizing dropshipping business profitability. So you may stick to one of the options and check how your margin changes.
Outsource time-consuming tasks
Delegate processes that require a lot of effort to a third-party execution. Thus, you can shift some responsibilities to fulfillment services, designers (in case you sell POD products), and web developers. In long-term cooperation, outsourcing can significantly benefit your selling enterprise by reducing time and unskilled labor.
Streamline repetitive operations
Orders acceptance, redirecting to suppliers, checking fulfillment information, tracking numbers - all these actions can be automated with certain e-Commerce software solutions (we’ll list them below).
Taking routine tasks off the sellers’ shoulders will result in reduced costs and contribute to professional and business growth instead of simple process maintenance.
Change marketing strategy
Consider how much it costs to start dropshipping on Shopify with paid promotions. Then, choose what will be suitable for your business development: not to pay for advertisements and set aside several hours a week to update content or use low-cost marketing channels with minimal effort to manage.
Make your website SEO-friendly
E-Commerce platforms provide an excellent opportunity to build organic traffic. Crawlers can easily find your store with the fitting product description, title, and URL. Moreover, building a Shopify blog outside the traditional selling page will significantly benefit your business. Use relevant keywords to write appropriate content and let Google rank it well.
If you are thinking of how to drive traffic to the Shopify store for free, search engine optimization is the first thing you should consider on your website.
Delete unnecessary expenses
Compare your costs with their value for building an excellent online shop. You may find that some of them are nice to have but not obligatory. For example, if your dropshipping integration is applied to multichannel sales, then audit which one “eats” commission rates but doesn’t affect traffic.
Establish solid relationships with suppliers
Entrepreneurs working with the same suppliers for a long time can negotiate loyalty programs, including special prices or free shipping. Each saved dollar can be provided to create a Shopify dropshipping store that is highly competitive in the global e-Commerce market.
Choose a reliable carrier
Usually, sellers partner with several shipping providers to guarantee the best terms and prices for order fulfillment. Depending on the client's location, one or another carrier can be beneficial.
Decrease package size and weight
It is one of the working ways to reduce shipping costs for small businesses. Discuss the possible materials with a company that will be responsible for packing your orders. The smaller and lighter your box will be, the less you’ll pay. At the beginning of the dropshipping journey, you may use simple white label packaging and ad customization later, when you’ll earn more profit.
Correct shipping fees
Delivery prices can change during the year according to holidays and economic factors. So, be attentive to dropshipping suppliers or shipping companies' announcements to transform product costs on your site.
Track your shipments
Provide transparent delivery service to establish a reliable reputation among customers. Send an ID number of their orders to define a package location in real-time. Clients will find their order on the map if the shipping takes longer than expected, convinced the goods haven’t been lost. Tracking may reduce one of the hidden costs of dropshipping - buyers’ rejections. And sellers wouldn’t have to pay for logistics in both directions.
Include delivery expenses in the product cost
How to price dropshipping products in such a way? Shopify sellers add flat rate shipping into the good's price. It is an average cost for the stuff they sell. Sometimes merchants pay less, and sometimes they pay even more. But with the proper calculations, they will sell without a loss.
Every business can lower costs according to size, product type, quality, and staff quantity. But it is the first step in building a profitable e-Commerce store. The next challenge lies in raising it from the ground, developing the goods line, supporting stable work, and attracting traffic. Find how to overcome these issues in the next chapter.
Tips to drive more sales in your Shopify dropshipping business
When owning an online shop, entrepreneurs can’t just sit and wait for clients to come. A wise strategy is obligatory if they want to make a good profit. So how to bring customers to your online store? Let’s consider a few tips and tricks.
Convert new subscribers into regular clients
When capturing the visitor's attention, gather their personal information. An e-mail address will be enough to stimulate increasing sales on Shopify without ads. Of course, you can’t turn all your traffic into buyers, but with regular email notifications, their growth is more than possible.
Statistics say that only pop-ups have a conversion rate of 3,1%. Besides, you can also use chat windows or fly-outs in a blog, home, and product pages to suggest discounts in exchange for an email.
Use up-selling and cross-selling tactics
One of the intelligent solutions to get consistent sales on Shopify is persuading shoppers to add additional items to the basket or the same type of product with upgraded characteristics.
For example, in cross-selling advice, you suggest buying a basic jacket if the customer purchases a shirt. While in the up-selling strategy, you show a page with a shirt of better quality material.
Add Instagram or Facebook to your additional sales channel
Start new customer relationships on the other storefronts. Your mini social media shops will help to reach more clients and hashtag marking - make your products accessible for searching. Such platforms are one of the easiest ways to promote the Shopify store to a sizable, uneven-aged audience.
These are only a few ways to reach your customers and convert them into leads. Take one step at a time and watch your visitor's reaction. Then, try to figure out what features will work better and apply them in your dropshipping store. We understand that making routine tasks consume a lot of time, so little is left to make a customer’s analysis. That’s why we suggest some valuable tools helping to streamline your business workflow and save hours for improving UX.
How to establish a harmony between costs and sales?
Earlier in the article, we talked about automated software, which allows streamlining fundamental processes in online selling. So, meet the innovative solutions to make your business work like a clock, reducing expenses and growing profitability.
With PodZa, the specialized e-Commerce solution for your POD order fulfillment, low-performance tasks are now in the past. Managing sales can be not only effective but pleasant. You may think of implementing the most desired ideas, like widening the customized assortment or a better promotional campaign. At the same time, the digital tool registers items, accepts, distributes, fulfills orders or calculates income.
You will have no headaches about clients’ order fulfillment with outsourced services. Whether you sell printed goods or dropship ready-made stuff, ShipHero and Shipstation are on the stage to popularize your brand with customized labels. Track your parcels to the end-customers door, providing transparent delivery.
Thus, an intelligent solution combination can become your reliable assistant in cost-effective business management and establish a fast workflow when you face sales growth.
There are many aspects to work on while organizing a profitable dropshipping on Shopify. But what we find brilliant news: even in the most challenging situations, there are always solutions. Whether your business is small or large, you can find excess costs to cut and mindful tips to increase sales. The digital world gives a limitless opportunity to develop an e-Commerce enterprise even if you have a low budget. Qualified developers work hard to give birth to innovative technology that can replace humans in their monotonous work and set up a robust network for business management. So create, delegate, and succeed!