How To Start Dropshipping In Canada On Shopify?

How to Start Dropshipping in Canada on Shopify

According to Canadian statistics, a large chunk of online buyers in Canada is purchasing online from US online retailers, European e-retailers, and even from China, the Pacific Rim and other parts of the world.

This gives online retailers who are thinking about starting a Dropshipping business in Canada a unique opportunity to tap into a whopping 18 million online buyers. Especially when you consider that retailers in Canada who leverage the Dropshipping business model earn 50% more profit than when they keep their own inventory, it makes all the more sense to get your feet wet into the world of Dropshipping.

First things first, let’s dig into what the Shopify Dropshipping business is all about. In essence, dropshipping is an order fulfillment method for retailers where products are sent directly from the wholesaler to their customers.

The store owners don’t need to stock inventory or make any upfront payments. As soon as a customer places an order on a Dropshipping store, the website forwards the same order on the supplier’s website with customer details and the third-party supplier ships it directly to them.

The drop shipper doesn’t have any involvement in the handling and shipping of the product, while the supplier never interacts with the customer directly. As for the customer, they will never know what is happening behind the curtains.

The dropshipping business is so lucrative because the retailer only pays the suppliers’ wholesale price but sets a much higher retail price which results in a good profit margin. The retailer doesn’t need to incur the cost of inventory or the costs associated with order fulfillment.

Under the Dropshipping model, all you have to do is create a brand, find a suitable supplier, and market your products. The greatest benefit of starting a Dropshipping business in Canada is that it is hassle-free to start, manage, and grow, and you can test and sell new products without incurring any startup costs.

Is Dropshipping Legal In Canada On Shopify?

While many people are dubious about starting a Dropshipping business in Canada, you have nothing to worry about. Yes, Dropshipping is legal in Canada. However, care must be taken that the products you are offering in your store can be legally sold in Canada.

Also, you should confirm that your product pricing complies with Canadian tax laws.

Scaling Your Dropshipping Venture in the Canadian Market with Shopify

How Do I Start Dropshipping in Canada Using the Shopify E-Commerce Platform?

1. Find your Niche

While many blogs would start telling you how to build your Shopify Dropshipping store, I think that it is more important to figure out who your target market is and what you are selling.

To work in a systematic manner, you should first identify a potential market you are interested in, such as beauty, fitness, or home decoration. Make a list of product keywords relevant to that industry by which people would normally search for products in that category.

If we talk about the fitness industry, some logical keywords would be “best yoga pants”, “leggings”, “gym wear”, etc. Use a tool like AHREF to determine the search volume of those keywords and narrow down your list to keywords with the most searches.

Next, you need to determine if an item is trending or its fad is waning. Google Trends will help you determine the search popularity of different products over the years. Knowing if a product is raging high in the market isn’t enough if it isn’t lucrative to sell.

You need to gauge the profitability of an item and factor in costs such as the shipping fee, the difference between the supplier cost and the retail price you can reasonably set, the cost of marketing the products, and the Shopify fee. Ideally, most successful Shopify Dropshipping businesses are selling low-cost products at a premium.  You can also use Shopify’s Gross Profit Margin Calculator to calculate potential profits.

2. Conduct Competitive Research

In the previous step, you finalized the products you want to sell in your store. However, know that there must be other stores in Canada offering the same products. You need to find your immediate competitors and understand the ins and outs of their business.

Perhaps you might get a dose of inspiration for your marketing campaigns or website themes. The best way to do competitor research is to use Google to find your 5 biggest competitors. If you are selling yoga pants, simply typing this name will show you who your top competitors are and how they ended up at the top of SERPs.

There are also a plethora of free and paid online competitor tools which you can use to keep tabs on your competitors’ activities. You can spy on their social media activity, see who their followers are and their top traffic sources.

You can also subscribe to your competitor’s email lists and get a direct insider scoop on what they are up to. You will learn a thing or two about how to attract customers and how to make sales.

3. Choose your Supplier Wisely

The success of your Dropshipping business depends in parts on the supplier you choose. Remember that you don’t have any products of your own to sell. Now that you know what you are going to sell, you need a supplier who can provide those products at the best possible rates and of the highest quality.

Shopify-owned platform Oberlo helps you find products with good profit potential that you can Dropship right to your customers, without having to get involved with inventory, packaging, or shipping.

This marketplace gives you access to suppliers from around the globe. The app integrates with your Shopify store and makes it easy to add suppliers to your store and forward orders to them. Before selecting a supplier, be sure to check reviews, top-selling products, and more on their page.

4. Create A Shopify Store

Now that you have done all the important work, all which is left is to create a beautiful online storefront that appeals to customers.

First things first, choose a domain name. You can choose to keep the current “myshopify domain” given to you, connect a custom domain that you already own, transfer an already owned domain from another domain registrar, or buy a new domain from Shopify.

Think of a catchy brand name and register your brand. With Shopify, creating and managing your online store is a breeze. Your Shopify store is where you display your products, accept orders, and process payments.

Thankfully, you don’t need any coding skills to create your Shopify store. Shopify offers hundreds of customizable themes as well as easy drag and drop capability. Even if you are working on a shoestring budget, you will find everything you need for your online store.

If you want to have your Shopify store up and running without a hitch, you can also seek Shopify App Development Canada or even hire us for Shopify integration services in Canada.

5. Set up Payments

When customers land in a store and place an order, you need a means through which you can collect payments. Shopify has collaborated with numerous payment processors so you can select as many options as you want.

Access “payment providers” from your dashboard and choose the right payment providers according to your business needs.

Even though PayPal is the enabled method by default, it helps to offer multiple payment options to your customers so that they never face a problem or abandon a cart at checkout. Some of the payment gateways available for Canada include 2Checkout, Alipay Global, Authorize.net, Beanstream, BitPay, PayPal Express Checkout, Netbilling, and Shopify payments.

6. Prepare your Customer Acquisition Plan

Now that you have products to sell and a great website to showcase your products, you need to acquire customers who will buy from you.

You cannot make a sale if you do not have customers. If you wish to attract customers to your Dropshipping business in Canada, you can leverage Facebook ads or Google ads to increase traffic to your store.

Not to mention, promoting your brand on various social media channels, such as Facebook and Instagram are a great way to place your brand in front of your targeted customer. Social media optimization is one of the best ways to scale up your business and get customers.

Build your email list and win customers with email marketing campaigns. Offer early-bird discounts to your email list, let them in on what is new, and give them access to premium deals and offers.

This is one of the easiest ways to generate revenue without spending a fortune on advertising and marketing. Remember that Facebook ads open exciting doors for budding entrepreneurs who are operating on a shoestring budget.

Facebook ads help you reach out to your intended demographics, market your products to relevant customers, and create engagement.

Do I need a business license to Dropship in Canada with Shopify?

Even though Shopify does not require you to have a business license in order to sell on Shopify, it is prudent to make your business legal to rule out unnecessary problems while Dropshipping in Canada.

There are three main business structures in Canada, one of which is a sole proprietorship. This business model is ideal for those who are just stepping into the world of Dropshipping. By choosing this option, you operate under your own name and don’t need a business license.

All you have to do is apply for a Business Number from the CRA (Canadian Revenue Agency), which makes your Dropshipping journey hassle-free.

How do I find Canadian suppliers for Dropshipping?

There are many Canadian-based Dropshipping suppliers to choose from, so make sure that the supplier you choose checks all the boxes. You need to do your due diligence and make sure that the supplier you are choosing has received ample positive feedback and 5-star ratings from past customers.

A respectable supplier will respond promptly and professionally when contacted and answer your questions accurately. Secondly, they should be able to Dropship on your behalf without the customer realizing their involvement.

They should ideally offer fast shipping times and offer tracking abilities. They should have a well-stocked inventory of the products you are selling and should be capable of replenishing promptly.

They should be able to able to handle peaks in demand without running out. Also, look into how they handle product returns and refund requests.

If you are particularly looking for a Canadian-based supplier, you should search online for the best suppliers in Canada.

Conduct Google searches for the words “wholesale” or “distributor,” next to keywords from your products or niche or particular names, model numbers and brand names, as well as region. You should also visit Local, national or international trade shows where you can talk face-to-face with manufacturers and wholesale distributors, and form industry associations.

Directories are commonly found on industry association websites and you’ll also find out about networking events.

Some of the best Canadian-based Dropshipping suppliers include Sprocket, Oberlo, Wholesale Central, Dropified, SaleHoo, WorldwideBrands, AliExpress, and CTI Directory.

You can also find plenty of niche-specific suppliers in Canada as well, such as G Furn that runs particularly in the interior decoration market, Vitabase that supplies quality health supplements and vitamins, or Coastal contacts that specializes in the manufacture of eyewear.

AliExpress dropshipping Canada vs Dropshipping Canada Shopify

First things first, with AliDropship you can either customize your website from scratch or hire development experts.

However, Shopify offers amazing pre-built themes, drag and drop facility and ease of setting up a store with zero coding skills. Shopify Website Design Canada is a breeze! When we talk about the ease of adding products to your online store Shopify offers an advanced CSV file product import option to allow you to import products from virtually any online marketplace.

AliDropship also supports direct product import but it is not so flexible. When we talk about Shipping, Shopify is the winner since it offers a more reliable shipping service. Since Shopify is responsible for shipments, it is not dependent on the product suppliers.

Marketing Strategies for Canadian Dropshipping Success on Shopify

This table provides a clear overview of the topics and descriptions you can include in your blog post about marketing strategies for Canadian dropshipping success on Shopify.

FAQs

How much is Dropshipping in Canada taxes?

Usually a fixed 5% GST rate applies to most goods in Canada, but there are certain products that are exempt from GST. Be prepared to also incur the provincial sales tax, which ranges from 0% to 10% depending on the province.

Before starting a Dropshipping business in Canada, you need to register for a GST/HST account if you sell products or services that are taxable and your worldwide revenue exceeds $30,000 CAD over a period of one year.

Is Dropshipping made in Canada on Shopify profitable?

Yes indeed. In fact, Dropshipping is a low-risk business model where you can easily sell products to your customers without having to make upfront payments or stock inventory. There are many Dropshippers in Canada who make up to $100,000 per year with a successful Dropshipping store.

Can I Drop Ship From the USA To Canada Using Shopify?

Yes, you can. You can Dropship from any country in the world as long as your chosen supplier supports international shipping.