How To Set Up Magento Dropshipping Business?

Do you have grand ambitions for your online business but are intimidated by the difficulties of shipping and inventory control? Dropshipping with Magento might be the ideal option for you. With this ecommerce strategy, you can concentrate on managing your online business while your suppliers take care of product fulfillment and storage.

In this blog article, we’ll go over the definition of Magento dropshipping, its advantages, and how to implement it in your online store.

Table of Contents

What is Magento dropshipping?

Drop Shipping is a popular business strategy. Owners of Magento stores get goods from outside merchants using this strategy. Usually, it comes from manufacturers or distributors who keep their inventory up to date. The Magento e-commerce platforms owned by the shop owner list and sell these items.

It assists in lowering the expenses and liabilities related to inventory maintenance. When dropshipping, the final consumer does not see the local source. It looks to the consumer that their order was sent straight from you when they received it.

Three simple steps may be used to simplify the drop shipping process:

  • You put something up for sale on your webshop.
  • You provide the supplier with the order data as soon as an order is placed.
  • Under your name, the provider delivers the order straight to your consumer.

The simplicity of Drop Shipping’s administration is one of its key benefits. With only a few clicks, you can ship things to your consumers. Additionally, you may operate a Drop Shipping company from any distant place.

How to Launch a Dropshipping Business

Determine what products to sell

First, identify your specialty. Finding your dropshipping niche is a hot topic these days, but it’s really just a fancy way of asking if there’s a demand for your products. To identify your niche, consider audiences or ardent fans who have a common need or interest. These people are willing to spend money on products that appeal to them.

Don’t promote something that is copyrighted or dangerous.

If you’re just learning, start with something that doesn’t go in or on a person’s body. You may also have problems if the item includes a well-known individual or a character from a well-liked television show.

Review the seller’s comments and place an order for a sample.

What is the duration of the merchant’s business? What kinds of answers are they getting back?When you order a test product, does it meet your expectations? How can you make sure that your customers are happy with the products when they receive them?

Consider dropshipping a limited number of items.

Since you’re dropshipping certain things, you don’t have to dropship everything. Dropshipping may be appropriate for large, heavy, and costly specialised goods. Say you offer nautical products on your website. Dropship the anchors but feel free to retain some merchandise and move yourself.

Master the fundamentals

A good domain name is something you should invest in as it’s crucial to any ecommerce business. When it’s finished, you may start configuring your website. You may use Shopify immediately if you decide to go with it. The Shopify Brooklyn theme is recommended by many dropshippers and features a good range of fonts. There’s yet another option for online shopping. For further information, see our evaluation of the best ecommerce platforms.

Make direct contact with a supplier to form a dropshipping alliance.

There will definitely be less competition, therefore this is a great plan. To put it simply, you are creating a new market for a product that has to be noticed by buyers who are prepared to buy. If you utilise the database, every other subscription makes use of it as well.

Benefits of choosing Magento for Dropshipping

Magento’s flexibility and agility make it the best platform for dropshipping companies. The following are strong arguments for why your dropshipping business will benefit greatly from a Magento-based store:

Improved scalability

An increase in orders causes an increase in workload in traditional retail e-commerce. But with the dropshipping strategy, your suppliers do the majority of the work. Your company may expand thanks to this scalability advantage without requiring you to put in a lot more work. It makes it a productive approach to grow your online business.

No Commission Charges

Magento’s special ability to not charge commission on orders makes it a great option for dropshipping companies. This unique quality guarantees that a substantial amount of your income stays with you, giving you a distinct financial advantage.

Clear and Simple Billing

Magento provides an open-architecture billing system. It guarantees that all of your financial transactions are understood clearly. It also aids in locating potential areas of overspending or places where cost-saving measures might be implemented.

No Limitations on Orders

There are no restrictions on how many orders you can handle using Magento. Your store can easily accommodate expansion thanks to its scalability. Additionally, it handles spikes in consumer orders at busy times of the year or during special promotions without encountering any issues.

Options for Personalisation

Magento’s wide range of customisation possibilities is one of its main advantages. With the help of these choices, you may exactly customise your online shop to meet your company needs. To build a unique brand identity that appeals to your target market, this flexibility is essential.

Independent Platform

You have more control over your store when you use a Magento hosting platform. You don’t need to depend on outside suppliers. It gives you the freedom to run your company on your terms and make choices that advance your objectives.

Extension of Multichannel

Expanding a multichannel business is made easier with Magento. Reaching a wider audience is made easier by its wide range of features and integrations. Additionally, it expands and diversifies your audience, which improves your commercial opportunities.

How to set up your Magento Dropshipping Business

Select Your Dropshipping Company Concept

Selecting a product category or specialty for your dropshipping business is the first step in setting up Magento dropshipping. Think about the market demand, your hobbies, and your talents. Look at well-liked dropshipping items and choose a niche you have a strong interest in.

Evaluate Your Rivals

After selecting a niche, it’s critical to research your rivals. Look at their marketing approaches, prices, product offers, and websites. Identifying their advantages and disadvantages will enable you to provide your shop with a competitive edge before using the Magento dropshipping plugin.

For instance, you may investigate the online presence of your rivals and the popularity of the items you have selected using tools like Google Trends.

Select a Provider for Magento

Once you’ve decided which items to offer, choose a reputable dropshipping provider. Make a list of prospective vendors who can fill orders in the area you want to sell in before moving further. Make contact with each to find out important information like minimum delivery times and order amounts.Take policies, delivery schedules, product quality, and overall service quality into account as you reduce your options.

For your firm to run well, these requirements are essential.After you’ve found a few qualified vendors, get in touch with them and purchase samples of their products to gauge your trustworthiness. To improve packaging and strengthen your brand identification, look into solutions like bespoke labelling.

Product imports

You must now invest in the website where you will be able to provide a large selection of items, having chosen and verified the right supplier. Your e-store may be ordered to your specifications and hosted by any trustworthy web developer.All of these tasks may be delegated to a respectable ecommerce development firm that specialises in addressing such situations. The ecommerce development in UK you choose should have prior experience in this field. To determine whether their prior work is good, you may look at it. You can even get in touch with the individuals who worked on the projects if they have completed any prior tasks.

Advertise And Make Your Store Better

By the time we reach this stage, the setup of your online store will be essentially complete. For your eStore to grow and get your first sales, now is the ideal moment to market and optimise it.The amount you set aside will have a major impact on how your online business is promoted. As a result, you may consider using Facebook advertisements, influence marketing, display ads, or other strategies to promote it.

Because it’s an affordable way to raise your website’s ranking, make sure you keep a careful eye on the SEO functionality and performance of your content. Additionally, be sure you use free marketing strategies to connect with potential consumers and clients, such email marketing and social media marketing.

Important Dropshipping Elements to Consider when Selecting the Best Ecommerce Platform


Dropshipping companies often have very thin profit margins. A platform should be chosen after taking your ROIs into account. Certain sites are free to use, but others charge hefty fees. For instance, starting a dropshipping platform is free with Woocommerce. You may also choose which plug-ins, hosting companies, etc. to use. You may now achieve previously unattainable levels of personalisation and scalability.

Establish a straightforward checkout procedure.

Once their orders are completed, customers prefer dropshipping websites with simple checkout processes since they can finish their transactions fast. You may use a different feature on the website, such as a guest check-out option. Customers won’t convert because of your “excessive expectations.” An excellent illustration is given by the ASOS case study. If ASOS removed any mention of opening an account, it might reduce its desertion rates significantly. They want anonymous transactions that happen quickly.

Manage stock levels

When you use the dropshipping business model, you give another company authority over a number of ecommerce process components. This includes the inventory on your website, which is created, stored, and transported by other individuals. Undoubtedly, this has several advantages. But you’ll need a method to maintain an inventory of your offerings.

Inventory management software offers several methods to update pages, maintain track of product numbers, and other features in an effort to assist clients when supplies run low.

Outstanding client service

Above all, be sure the service provider delivers excellent customer assistance whether you purchase development tools like Shopify or use a template service. If you have any problems with your dropshipping business, you need to be able to contact customer care and obtain help right soon.

Downtime or malfunctions in your storefront might harm the professionalism of your business, so you should have the finest technical support available to help you fix any issues that may come up.

When developing your website, consider security.

You will need precise and sensitive personal information from your consumers in order to complete a transaction, like a dropshipping website. It would thus be preferable to use SSL in your website design in order to safeguard critical personal client information. Furthermore, the fact that Google announced in 2014 that HTTPS is a ranking factor makes it significant for SEO. By employing this dropshipping feature strategy, you may prevent unauthorised parties from obtaining customer data.

People want to purchase websites to search internet. Your website’s security feature may be used to draw customers to your online business. If you want to accept credit card payments, you need to protect your website under PCI requirements.

Promotional Equipment

The development of the store is just one part of the puzzle; the other is marketing it to the target market. To improve your search engine position and reach your target audience, the platform you use should have marketing and SEO dropshipping tools.

For example, you may use WordPress Woocommerce with Yoast, All in One SEO Pack, Google XML sitemaps, etc. to improve your store’s rating. You may increase your search engine position with Shopify by adding SEO Suite, SEO Optimizer, SEO Booster, and other goods.

Magento Dropshipping’s Challenges

Increasing Competition

The intense rivalry in the online marketplace is one of the main disadvantages of dropshipping with Magento. Because of the low entry hurdles in e-commerce, you won’t be the only vendor using this strategy. Similar goods are sold in several other stores. Customers are left feeling overawed by the abundance of options.

Restricted profit margins

Only seldom does dropshipping result in large profits; certain companies may have narrow profit margins. Since dropshipping has little overhead and little risk, it is sometimes seen as a trade-off that results in smaller profits.

Keeping a competitive edge over rivals requires ongoing work, which is another reason contributing to these small profit margins. Raising pricing has the ability to turn off customers, which will limit the range of products. Optimise operational procedures, negotiate with suppliers more effectively, and develop cost-effective marketing tactics to meet this issue.

Challenges in inventory management

Managing inventories can be challenging when operating a dropshipping company. You don’t have much control over how the warehouse runs. Daily variations in inventory levels are possible, and they can happen at any time.

To avoid stockouts or overselling, you have to be alert and flexible due to this ongoing volatility. A clear line of contact with suppliers should be established, and software for inventory tracking should be put into place. It assists you in maintaining efficient operations and avoiding stockouts.

Extensions for Magento Inventory Control and Fulfilment

While maintaining a secure online store is essential, having a reliable system in place for order fulfilment and inventory management is as critical. Numerous extensions are available for Magento to help automate these procedures. We will look into a few plugins that could improve the functionality of your Magento store.

The Greatest Extension for Magento Inventory

Store owners who want to correctly and effectively manage their inventory must choose the finest Magento inventory plugin. One of the best options is Wyomind’s Advanced Inventory addon. It is essential for any retail organisation since it provides multi-warehouse management and facilitates inventory tracking across many locations.

Magento Plus Delivery

Integrating Magento plus fulfilment solutions is essential for companies trying to grow. With their advanced order fulfilment features, these services—like ShipStation or Magento Order Management—integrate with Magento effortlessly. They may increase operational efficiency and customer experience by automating the fulfilment process.

Free Extension for Magento Inventory Management

A free Magento inventory management plugin may be a game-changer for anyone looking for a free solution. MagentoInventory Management extensions from Mageplaza provide free versions of key functions. They save additional costs and enable small and medium-sized enterprises to track and manage stock levels efficiently.

Magento Warehouse of Fulfilment

Extensions such as M2E Pro may be used to link your Magento store to a Magento fulfilment warehouse system. Retailers may ensure a seamless and error-free fulfilment process by syncing their inventory with third-party logistics providers using these interfaces.

Extension for Magento Stock Management

A Magento stock management plugin such as Amasty’s Efficient Order Export might help ensure effective stock management. It lets you control inventory levels across several channels and export stock data straight from your Magento dashboard.

Hand-operated Dropshipping

Manual dropshipping is an additional strategy in which you oversee order fulfilment in your Magento business directly. In order to supply items to clients, this approach entails sending emails to certain vendors. You may designate preferred suppliers for certain orders with it.It’s a great option to try out different vendors. Investments are avoided with manual dropshipping unless you’re certain that drop shipping is the best option for your company.

Although it might be labour- and time-intensive, manual dropshipping gives you more control over the product quality and shipment. You’ll be required to manage inventories, keep tabs on shipments, and respond to client queries on your own.Consider carefully if manual dropshipping fits with your aims and resources before putting it into practice.

Solutions for multichannel platforms

Using multi-channel platform solutions makes it easier to run your Magento dropshipping business. Order administration is centralised and streamlined by these capabilities across several sales channels, such as eBay, Amazon, and your Magento shop. Dropshipping solutions with multichannel platforms are advantageous for larger companies with a variety of sales channels.

Enterprises function across several channels, including your Magento shop, applications, marketplaces, and virtual and physical platforms. Successful multichannel drop shipping requires integration of all endpoints, including ERP/Accounting systems.Orders are automatically sent to your back-end systems from your marketplaces and Magento shop. With the help of these systems, you may run your whole company from one central place.

Top Magneto Dropship Marketplaces

Including these well-known dropshipping websites as extensions and plugins for Magento. Reaching out to a wider audience and increasing the range of products you provide is a calculated move. The following are some fantastic options for dropshipping on the Magento platform:


Aliexpress is well known for its worldwide reach, which enables vendors to send goods to clients in any location. About 100 million things are available for purchase. It also offers a wide range of solutions to satisfy the needs of your target market. If you want to start a dropshipping business with little capital outlay, this is the best option. It is the preferred option for Magento shop owners who want to reduce their initial cost and attract a global audience.


For Australians looking for dropshipping solutions, DropshipZone is a top provider. It was founded in 2012 and has a proven track record of providing merchants with knowledge and state-of-the-art technologies. This assistance may play a crucial role in optimising your dropshipping business processes and guaranteeing a seamless client journey. It is a vital partner for optimising operations because it provides Magento shop owners with an extensive product catalogue.


Dropshipping is a great business strategy, particularly for companies looking to run on a tight budget. You may benefit from drop shipping whether you’re just starting out with your Magento store or wish to combine your applications with other sales channels.Making a lot of money with dropshipping has never been simple, though; to maximise your profits, you’ll need to choose the correct suppliers and market. Using extensions, multichannel management, or manual integration are your options for dropshipping integration. Select the one that best suits your company’s needs.