Oberlo Drop Shipping Guide

From the Featured Article Series:
The Best Drop Shipping Companies 2018

By Milo Cruz | Last Updated: September 2, 2018

Table of Contents

Ever dreamt of starting your own retail store? What if you could do it without purchasing any inventory? That’s what drop shipping is all about!

With Shopify’s Oberlo app, you can put up an eCommerce business overnight. Yes, you read that right!

You can launch your very own brand – complete with everything you need to start making money – in just a matter of hours.

In this article, we’ll provide you with a step-by-step guide on how you can use the drop shipping business model to build the online retail business of your dreams.

If you’d like to learn more about how a business like this works, you can read our article that explains what drop shipping is.

Now without further ado, let’s get started!

Starting Your Oberlo Drop Shipping Business

Step 1: Find a Suitable Niche

Before everything else, we advise you to think of a niche for your brand. Ideally, you want something with not too many competitors, has unmet demand, and has a good selection of products.

You don’t have to have anything specific in mind yet – just a broad idea will do.

For this guide, let’s stick to one example: home decor. We could narrow this down even further, but it should serve well for our purposes.

Search for home decor on AliExpress and see if you like the products available. Do you see any items that show potential? Take mental note of those products and continue looking around. Eventually, you’ll get a stronger idea of how any given niche might perform.

You’ll also find more niche ideas as you continue to browse the marketplace, so just keep at it if you’re low on ideas.

Once you find a good niche, proceed to the next step.

Step 2: Sign up with Shopify

Next, you’ll have to set up a space for displaying your products. This will be your storefront, where you’ll be interacting with your future customers.

Since Oberlo only works with Shopify, the first thing you need to do is sign up for an account with the service. The process is super straightforward. Just type in your email address, desired password, and your store name.

Shopify signup

Don’t fixate too much on getting your store’s name perfect. While you can’t change it later on, you can always make a new one with the same email address. (You can also change the email address associated with any of your stores.)

If you’re not the creative type, you can also rely on business name generators to give you plenty of suggestions. Both Shopify and Oberlo offer this service. They function similarly to each other – wherein you input a keyword you like and get a list of potential store names.

How much will it cost?

While Oberlo is free to install and use, it’s important to note that Shopify is in fact a paid service. You need a subscription to use it. The least expensive option is $13 per month and is equipped with everything you need to start a legitimate business.

What’s great is that every store you create comes with a free 30 day trial. You’ll have ample time to test the platform and even make your first sale.

Everything else will only require time and some diligence on your part.

Step 3: Download the Oberlo App

To set up Oberlo on your store, simply enter your Shopify admin panel and open the Apps section. Oberlo should be one of the first apps displayed. If not, just do a quick search.

Oberlo installation

Open Oberlo’s details page and click the Get button. Input the requested information and that’s it – you’re ready to move on to the next step!

Step 4: Start Adding Products to Your Store

Now you’re ready for the fun part: shopping for products! You won’t actually be making any purchases, but it sort of feels like it.

Browse AliExpress’ product catalog and find products that you’d like to drop ship. Since we’ve chosen to focus on home decor, we can start looking for products that fall under this niche.

Let’s go with floor lamps. After doing a quick search, we found one that appears to be a winner! It looks great and is reasonably priced. Now, we can import this to our store.

There are a number of ways to do this. The first one is by copying the product’s Aliexpress URL into your Oberlo product manager. Open a product’s information page and copy its URL.

AliExpress floor lamp

Now go to your Oberlo UI, and open the Search Products section. You’ll find a box at the top-right section with the words Import product by URL. Paste the URL into the space provided and it’s ready for importing.

Oberlo import by URL

The second option is to use the Oberlo browser extension. This method is more convenient. You can add a product directly from the search results page by clicking on the Oberlo icon next to your desired item.

AliExpress Oberlo button

You can also open the floor lamp’s product page and click on the Oberlo icons at the top-right and bottom-right corners of your browser.

(Important note: Oberlo’s browser extension is compatible with Chrome and only works on the AliExpress website. Download it from the Chrome Web Store.)

An alternative to browsing the AliExpress catalog is by searching directly from within Oberlo, as they have a directory of products of their own. These products are sourced from suppliers that Oberlo has carefully screened and have verified track records of excellent performance.

The process is just as simple. For this example, let’s use this plant terrarium that would look great just about anywhere. Simply click on the Add to Import List button below its thumbnail to send it to your import list. Easy peasy.

Add product from Oberlo directory

Once you’ve added a product to your import list, you can make changes to its description, choose which images to display, select which variants you want to carry, and most importantly, set your own price. Make sure you price your products so that you end up with a profit. The Oberlo UI automatically computes this and displays it for you.

Now, go to your import list to complete the process. You’ll see that the floor lamp and plant terrarium are ready to be imported to your store.

Make your edits and click Import to Store when you’re satisfied. You can also import multiple items at once with the Import All to Store button at the top.

Oberlo import to store

Keep repeating this process with any products you find. Soon, you’ll have a nice range of products and start looking like a real business!

Step 5. Edit Your Products

After you’ve added a product to your Shopify store, you can still make changes to them. Just go to your Shopify admin panel and open your products page. Click on a product to make any changes to its price, description, and images. You can also make changes to its variants if there are any.

However, you’ll be limited to the variants and images you selected during the import process. If you want to add a new variant or image, you’ll have to delete the product from your Shopify store and import it again. You can also override the product, but we’ll go over that process later.

Making Your First Sale and What to Do After

Now that your products are up and organized, it’s time to start making money!

But hold on, there’s still a bit of work involved. Sales don’t just happen by themselves.

In this section, we’ll show you what to do once you have everything set up – the part that has to do with actually making sales and fulfilling orders.

How do you make your first sale?

There are basically two things you’ll need  in order to start making sales with Oberlo.

First, you’ll need to drive traffic to your store. Pretty obvious, right? But while it may sound simple, there is an art to it – something that you’ll master over time.

Don’t worry. There’s some totally doable strategies that anyone can take advantage of now:

  • Capitalize on social media. Seriously, why not? It’s free and easy to do, but make sure to have a content strategy beforehand. While that topic is a whole separate article in itself, know that social media is a powerful tool you can use to drive sales. A good way of using it is by adding relevant #hashtags to your posts. If your content is good, you’ll start seeing followers in no time.
  • Invest in paid ads. Ever seen a promoted ad on search engines or your social feeds? You can use those for your own business, too. Buy an ad to draw attention to your store, making sure to target the right demographic for you. Google AdWords is an excellent route you can take. It’s cost-efficient and produces real results.
  • Interact with the community. Find blogs and forums that are related to your business, and build relationships with people you meet. Over time, doing so will open opportunities for collaboration, free marketing, and reaching a larger audience.

The second is to actually convince your visitors to spend money in your store. You can do this a number of ways:

  • Show your credibility. Apart from showcasing an impressive catalog of products, make sure your store also features the essentials – a secure payment system, visible store policies, and accurate contact information. You need to show customers that you are worthy of their trust and business.
  • Provide incentives to buy. Offer the occasional giveaway or promotional deal. Be as creative as you’d like – just make sure you’re not spending money you can’t afford. While these tactics can generate more sales, you have to be careful in weighing its costs.

Ultimately, there is no guaranteed strategy to making sales. But in following these tips, you’ll surely be on the right track. You’ll also get better at it as your business continues to grow.

Fulfilling Your Customers’ Orders

So you’ve finally made your first sale. Congratulations! There’s really nothing like it – that feeling of exhilaration after all your work starts to pay off. While it can be quite fulfilling (get it?), don’t get too excited. There’s more work to be done.

Let’s go back to our home decor store. A customer has just purchased that lovely plant terrarium we added before. Since we found that particular product from the Oberlo directory, the process is very quick. Let’s break it down below.

After getting notified to the sale, head to your Shopify admin panel and go to the orders page. You’ll see a list of incoming orders. In this case, we only have one.

Shopify order manager

Click on the order to bring up its details. But before anything else, make sure you hit the Capture Payment button. If you don’t do this, the order won’t show up on your Oberlo dashboard.

Shppify capture payment

When you’ve successfully collected payment, you can go to your Oberlo dashboard to process and fulfill the order.

Click on the Order Products button, provide your payment details – if you haven’t saved it yet, select a shipping option, and that’s it! Oberlo will process the order and ship the item to your customer.

Oberlo place order

Tracking codes and estimated delivery date will automatically be updated once they’re available from the supplier. The orders will also be marked as fulfilled in your Oberlo and Shopify accounts.

But what about products that we found on AliExpress? (Like that awesome floor lamp, for example.)

Another customer has placed an order for that floor lamp. Again, make sure to collect payment so that Oberlo can work its magic. Additionally, be sure to have the Oberlo browser extension installed or you’ll have to fulfill the order manually.

Oberlo place order from AliExpress

Just click on the Order Products button like we did for the plant terrarium. Oberlo will direct you to the product’s page on AliExpress, automatically load your cart, and fill up the customer’s shipping details.

You’ll see Oberlo automatically complete the steps for you, but errors may sometimes occur. Just fill up the missing fields manually.

Oberlo AliExpress ordering

Proceed to pay for the item and the supplier will ship the order to your customer.

Simply repeat the same process for any other orders that might come in.

Handling Returns and Refunds

Now that you’re making a steady amount of sales, you’re probably surprised to see how easy it is to run a drop shipping store. For the most part, it is.

However, it’s only a matter of time before any business will have to deal with customer complaints. With drop shipping, this situation can be especially challenging to address.

You don’t ever have the products in your possession, so you can’t guarantee quality as well as traditional retailers can.

So, what happens when an unhappy customer wants a replacement or a refund?

Oberlo and AliExpress suppliers generally don’t accept returns. Refunds, however, can be made in certain situations. If an item is delivered in bad condition, is the wrong variant, is significantly different from its advertised description, or does not get delivered at all – you may ask for a refund.

Here is Oberlo’s policy on returns and refunds:

Oberlo returns and refunds

AliExpress also has a policy of their own:

AliExpress returns and refunds

File a dispute with either Oberlo or AliExpress and wait for their feedback. If a refund is given to you, make sure to refund your customer as well.

On the other hand, if a refund isn’t given to you, it’s still be a good idea to extend the courtesy to your customer. You’ll be taking a hit money-wise, but at least your reputation stays intact.

It should also go without saying that you should communicate with your customer during the entire process – apologizing for the situation and updating them on how you plan to resolve their problem.

Also, make sure to add a returns and refunds policy to your store. You can download a template from Shopify and adjust it to meet your needs. Having your policy clearly on display can potentially save you from a lot of trouble – so give it the attention it deserves.

Other Problems You Might Encounter

Aside from the occasional unhappy customer, you’ll also run into some minor (and not-so-minor) headaches when you start drop shipping with Oberlo. In this section, we’ll go over some of the most common ones and how to address them.

Shady Suppliers

AliExpress is an incredibly large marketplace – home to thousands of suppliers that are mostly based in China. While most are reputable businesses, there will undoubtedly be a few bad apples in the pile.

Working with the wrong suppliers could potentially be very costly to you, so do your due diligence when sourcing products. Make sure to read product reviews and familiarize yourself with a supplier’s policies. This will give you a better sense of whether or not they are worth doing business with.

As much as possible, try to source products from Oberlo’s own directory. These are handpicked suppliers that pass Oberlo’s exacting standards and help assure you of good business.

Price Fluctuations

A lot of AliExpress products change price without giving you any notice. For whatever reason, suppliers’ prices could suddenly spike – damaging your margins.

You should make it a habit to check your own prices to be sure that you’re not losing money when you make a sale.

To help you with this, make sure to use Oberlo’s Global Pricing Rules Feature. You can go to the settings page on your Oberlo dashboard to find it.

Oberlo global pricing rules

In there, you’ll be able to set a multiplier to your products’ cost – ensuring that your own prices leave you with a profit.

You can also set advanced pricing rules to configure different multipliers for different price ranges. For example, if a product already costs $1,000, it might be a bit overkill to set a 3x multiplier. You’ll end up with a $3,000 price tag that would just look ridiculous to your customers.

Always use your best judgment when setting prices and rules. You can also search for similar products on other marketplaces for a better idea of its price range.

Vendor Switching

Once a product is pushed to your Shopify store, you can’t change the supplier it originates from. If a supplier suddenly runs out of stock or significantly raises its price, and a customer has already placed an order for that item, don’t panic. You have a few options you can take.

The first is to simply search AliExpress for a supplier with the same product. If you find one, you can just purchase it manually to fulfill the order. Just make sure to update or remove the product from your store as soon as possible to avoid the same thing happening again.

The second option is to override the product listing and link it to your new supplier. Add a product to your import list and click on More actions. You’ll find an option to override a product and just follow the prompts. After that, you can proceed to fulfill the order as you normally would.

Oberlo override product

If you’re unable to find the same product from a different supplier, you’ll likely have to refund your customer. If the item is still available, but at a much higher price, you can also choose to go through with the order – taking the loss on that one sale. In either case, remember to remove the product from your store to avoid more problems.

Also, please read our article that goes over 6 Common Drop Shipping Mistakes. It’s got a lot of great information available to show you what things to avoid.

Strategies to Help You Succeed

Now that you have a good understanding of how drop shipping with Oberlo works, let’s discuss the things you can do to push your business to greater heights.

Buy a Domain

By default, your Shopify store URL will look like this: yourstore.myshopify.com. That’s not necessarily a bad thing, but surely we can do better than that.

Domains are relatively inexpensive these days, and you should seriously consider getting one for your business.

Not only does it make your store easier to remember, it also helps in adding credibility to your name. Potential customers will be more confident to buy from you if they see that you’ve properly invested in your business.

Additionally, top-level domains like .com or .net help your site’s SEO – making it easier for people to find you in search engines.

Ultimately, a domain makes your site more attractive. The slight cost you put into buying one could easily return to you in the form of better sales.

Invest in an Attractive Website

We’re not talking about hiring a professional web developer or content creator here. Those jobs could easily cost you plenty of money.

Instead, what we mean by investing is to actually take the time to make your store better serve your customers.

Make sure your website is free from typos, broken links, confusing information, and so on. Adopt a unified format for your product descriptions, since you’ll be sourcing them from different suppliers.

Categorize your products or group them into collections. Shopify already provides the necessary tools for you to do so.

Make use of stock photos to make your website more eye-catching. Shopify has a decent selection available, or you could do a quick search on Google. There’s plenty of resources available to you, and a lot of them are free!

Shopify stock photos

You can also write unique content for your brand to share your story and engage with your audience.

With drop shipping, you won’t be setting yourself apart with just products alone. You have to be more creative and apply yourself to truly rise above the rest.

Conclusion

Wonderful job! You’ve made it all the way to the end. We hope this guide has provided you with everything you need to know about how to start drop shipping with Oberlo.

Remember to stay on top of your game. Shopify allows for great freedom in building your brand; and its success will greatly depend on how much effort you put into it. While we’ve highlighted the basics here, there’s still no better teacher than first-hand experience.

We highly recommend you get started right away. Shopify offers a free 30 day trial and Oberlo comes at no cost. You can also check out our review of Oberlo here, if you’d like to learn more about the service.

Finally, please feel free to bookmark this guide and share it with your friends!