How to Fulfill Dropshipping Orders on Shopify: Easiest GUIDE

Dropshipping is all the rage these days. The idea of selling products online without having to deal with inventory and shipping yourself. Sounds pretty sweet, right?

As a dropshipper, you get to focus more on things like running marketing campaigns and optimizing your Shopify store.

But at some point, real paying customers start placing orders and you have to fulfill them.

This comprehensive guide will walk you through How to Fulfill Dropshipping Orders on Shopify.

That’s where order fulfillment comes in. When using Shopify for your dropshipping business, you have a few options for fulfilling orders:

  • Manual fulfillment – This is old school way of doing it. You receive an order on Shopify, then manually purchase the item from your supplier and enter the shipping details into Shopify. More work but gives you maximum control.
  • Automatic fulfillment – Various Shopify apps like Oberlo automate the processing and forwarding of orders to suppliers. Less daily effort once set up properly.
  • Fulfilled by AutoDS – An automatic fulfillment service that integrates with many suppliers. True hands-off approach but less customization.

So which method is best for your dropshipping empire?

Well in this guide, we’ll cover:

  • Step-by-step workflows for both manual and automatic order fulfillment
  • When apps can save you time or create more problems
  • Tips and tricks for fulfillment success from other successful dropshippers
  • Recommendations on the best options for new vs established stores

Let’s dive in and make sure order fulfillment doesn’t slow down your shop’s growth.

How to Fulfill Dropshipping Orders on Shopify

Manual Order Fulfillment

I won’t sugarcoat it – fulfilling orders manually can be a bit of work. But it gives you maximum control and visibility over every order. Let’s break down the process:

A. Viewing New Orders

The first step is being notified when a new order comes in. There are a few ways to do this:

  • Constantly (and I mean constantly) check your Shopify orders tab. Not super practical long term though.
  • Set up email notifications through Shopify so you get one as soon as an order is placed.
  • Use a free app like Order Notify which can even text you when you make that sweet, sweet sale.

B. Purchase Items from Supplier

  • Now log into your supplier account (e.g. AliExpress, Oberlo, Spocket).
  • Enter the customer’s shipping details and confirm their order.
    • Double and triple-check check the address is correct – getting returns is no fun.
  • Place the order with your supplier. Most will deduct the order value from your supplier account balance.
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C. Update Order Status

Almost there – the last step is updating the status in Shopify:

  • Mark that bad boy as fulfilled.
  • Enter the carrier and tracking number from your supplier’s order confirmation.
  • I like to add a customized packing slip thanking them for their purchase. It’s the little things.

Then sit back and watch that sweet, sweet money roll in. Well…once the customer receives their order at least.

Also read:

Automatic Order Fulfillment

I won’t lie – setting up auto-fulfillment takes some initial effort. But once it’s running, this baby practically drives itself.

A. Overview of Apps

There’s a bunch of apps that connect your Store to suppliers and handle fulfillment automatically:

  • Oberlo – The OG fulfillment app that everyone starts with. Free plan available.
  • Dropified – More advanced features. Paid only but a 30-day free trial.

I’d test out the free Oberlo option first. But if you start scaling, a paid app may be worth it for features like bulk order processing.

B. Setting Up Auto-Fulfillment

Here’s what you need to do to set up auto-fulfillment:

  • Connect your Shopify store to a supported supplier (AliExpress, Spocket, etc.) or warehouse.
  • Turn on auto-fulfill options and configure default order settings.
  • Set up custom rules like “Only fulfill orders over $50 automatically”.

It can take some trial and error but once properly set up, new orders kick off the fulfillment process automatically.

C. Ongoing Management

You’ll still need to keep an eye on things:

  • Monitor unfulfilled orders and troubleshoot any issues.
  • Look for ways to optimize performance, like adding more suppliers or warehouses.
  • Review auto-fulfilled orders for accuracy before marking them as complete in Shopify.

Auto-fulfillment saves a bunch of time but isn’t 100% hands-off. The key is spotting problems early and continuously improving your processes.

Fulfilled by AutoDS

Want maximum automation? Then AutoDS is for you. They handle everything from product sourcing to shipment tracking.

A. What is AutoDS?

  • AutoDS is an end-to-end order fulfillment service tailored for dropshippers.
  • They integrate with tons of suppliers & marketplaces to auto-fulfill orders with no handling required from you.

B. Getting Started

Here’s how easy it is:

  • Connect your Shopify store and AutoDS accounts.
  • Browse their catalog and select product suppliers and sources.
  • AutoDS sets up the workflow to automatically purchase inventory and fulfill orders.

It only takes about 5 minutes to set up.

C. Tips for Success

To avoid hiccups:

  • Start small – don’t link your whole store catalog right away.
  • Monitor orders closely at first to ensure accuracy.
  • Customize as needed – AutoDS has decent configuration options.

AutoDS won’t be a perfect fit for every product but take advantage of their free trial to test it out.

Product Sourcing Quotes

Sourcing the right products to dropship is make or break. You need reliable suppliers with quality inventory at good prices.

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When evaluating potential products, here’s some key data to look at:

  • Cost per item – what you’ll pay the supplier
  • Shipping cost per order – confirm delivery fees upfront
  • Delivery time – how long until customers receive it
  • Competitor pricing – for setting your margins

I like to compile this into a quote comparison table:

ProductSupplierItem CostShippingDelivery TimeComp Price
iPhone CasesAliExpress$2$414-20 days$15
Copper MugsOberlo$6$84-8 days$20

Having this sourcing quote data allows me to calculate my profit margins and identify the most lucrative products to sell.

Pro Tip – always order 1 sample unit first to verify supplier reliability and shipping times.

More Automation Tips

Order fulfillment is a big piece of automation, but not the only thing you can systemize.

Here are some other areas you can leverage automation to give yourself a bit more sanity:

Customer Messaging

Tired of having the same conversations over and over? Apps like ChatSentinel use AI to answer frequently asked customer questions automatically. More time for sipping margaritas.

Inventory Management

Running out of stock sucks big time. Rather than manually counting inventory, Inventory Planner syncs your Shopify and supplier catalogs automatically. Say goodbye to overselling.

Email Marketing

Don’t build your email sequences from scratch. Apps like Klaviyo make beautiful, effective campaigns with just a few clicks. Now that’s my kind of automation.

Accounting

Doing taxes manually gives me hives. AutoDS Financials integrates directly with your store and aggregates all financial data automatically.

And this is just the tip of the automation iceberg when it comes to supercharging your dropshipping empire. The key is knowing your pain points and finding apps to solve them.

What other business tasks do you waste too much time on? Let me know in the comments what automation struggles you have.

Accounting and Tax Considerations

I know talking about accounting and taxes isn’t quite as fun as setting up your Shopify store. But getting these right is mega important as your dropshipping business grows.

Here are some key areas new dropshippers often have questions about:

Tracking Expenses

You need visibility into your true net profit margins. Apps like AutoDS Financials track all costs like:

  • Item costs
  • Order shipping fees
  • App subscriptions
  • Ads spend

This makes calculating net margins on a per-product basis easy.

Sales Tax

Do your dropship orders require sales tax? Short answer – probably. Make sure you understand your state’s regulations:

  • If suppliers charge sales tax, you may be able to waive it
  • If not, you likely need to add sales tax yourself

Financial Reporting

Compiling invoices and financial statements for your records is a tedious but necessary evil. Leverage apps like QuickBooks or Xero to automatically generate reports each month.

It saves a tremendous amount of manual number crunching.

Taxes

Come tax time, aggregating all your sales data and expenses can be a giant pain. AutoDS Financials can auto-export everything to QuickBooks, making tax prep a breeze.

I know talking money isn’t glamorous, but getting your finances dialed in is well worth it. Take advantage of available apps so you can stress less and scale more.

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Keys to Profitable Dropshipping

Order fulfillment is just one piece of managing a profitable dropshipping business. Here are some tactical tips to maximize your margins:

Supplier Selection

Your supplier relationships make or break your profit margins. Here’s what to look for:

  • Bulk pricing discounts – bigger = better rates
  • Fulfillment costs – lower shipping = higher margins
  • Reliability & speed – for good customer experience

I negotiate rates aggressively and always have multiple supplier options for key products.

Pricing Optimization

Pricing strategically is crucial for profitability:

  • Research competitor pricing but don’t just match it
  • Run testing promotions to gauge elasticity
  • Bundle high-margin upsells and cross-sells
  • Display discounts versus lowering base price

My product prices balance maximizing profits and conversion rates.

Marketing ROI

Not all marketing channels are created equal. Focus efforts on those that yield the best returns:

  • ROI = (Revenue – Ad Spend) / Ad Spend
  • Target at least 3-5X ROI across channels
  • Continually evaluate performance and optimize

This ruthless focus on ROI has allowed me to scale aggressively.

There’s so much that goes into running a truly profitable dropshipping business. But keep these fundamentals in mind and your margins will thank you.

Closing Thoughts – How to Fulfill Dropshipping Orders on Shopify

By now, you should have a solid grasp of the different order fulfillment methods for dropshipping on Shopify.

The main takeaways:

  • Manual fulfillment gives maximum control but requires more effort
  • Auto-fulfillment apps simplify the process through automation
  • Fulfilled by AutoDS offers near complete hands-off fulfillment

There’s no one “best” approach – it depends on your business needs and scale. Most dropshippers start manually and then layer in more automation over time.

The key is finding the right balance and processes that work for YOUR product mix and capabilities. Rome wasn’t built in a day and successful dropshipping takes testing and refinement.

But don’t let order fulfillment stand in your way to a thriving e-commerce empire. Now you’ve got blueprints for multiple paths to get your goods seamlessly into your loyal customers’ hands.

Let’s wrap up with answers to some common questions about How to Fulfill Dropshipping Orders on Shopify.

FAQs – How to Fulfill Dropshipping Orders on Shopify

What shipping carriers should I use for dropshipping?

Popular choices like USPS, UPS, FedEx, or DHL. Compare rates to balance profit margins and delivery times.

How do I deal with unhappy customers and returns?

Have clear return policies stated upfront. Process returns/refunds quickly. Follow up to make it right.

What payment methods should my dropshipping store offer?

Start with major credit cards then consider Paypal, Apple Pay, etc. Limit high-risk options initially.

How much should I budget for marketing my dropshipping store?

Aim for less than 30% of revenue to allow for healthy margins. But aggressive marketing is key, so don’t underspend.

What other legal/regulatory issues apply to dropshipping businesses?

You may need sales permits, tax IDs, and business licenses. Review federal and local requirements.

I hope you thoroughly enjoyed the article How to Fulfill Dropshipping Orders on Shopify. Keep visiting.

Hello, I’m Samuel, and I’ve been in the dropshipping business for the past 9 years. Over the years, I’ve had the privilege of helping many novice dropshippers grow their businesses. Based on my experience, I’ve launched this blog to share my insights and knowledge with the dropshipper community.

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