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    Last Updated | September 10, 2021

    Dropshipping has become a buzzword in the eCommerce industry because it’s being named as an “easy” way of making money. However, it isn’t as easy as it sounds because it is continuously evolving. That being said, competition in the dropshipping industry keeps piling, but it’s the ultimate way of managing the inventory and expanding the product line. One way of creating a profitable dropshipping business is to opt for Magento 2 dropshipping. Now, if you want to explore this new chance, we are sharing an in-depth guide with you!

    Introduction to Dropshipping

    Truth be told, dropshipping is still a new revelation, but it’s old enough to discuss. With dropshipping, the business owners need to set up the online store and have the supplier take orders and fulfill them on your behalf. The supplier will send the products and materials directly to the customers, which is why it’s different from conventional eCommerce businesses. With dropshipping, the storeowners don’t actually own the inventory (yes, you will still be able to sell them to the customers through an online store).

    Basically, you will act as a mediatory between the suppliers and customers while the supplier passes off the received orders for shipping and packaging. At this point, you will earn profits based on what you are paying the supplier for order fulfillment and what you are charging from the customers.

    What Is DropShipping Model?

    DropShipping model depends on the retail fulfillment with which the store doesn’t need to keep an inventory to sell the products. That being said, when an online store sells the products through a dropshipping model, the items will be purchased from the third-party platform and sent to the customers. Consequently, the supplier doesn’t need to handle the products either. In addition, the seller will need to purchase the inventory from a third party, such as a manufacturer or wholesaler, to ensure on-time order fulfillment.

    What Is Magento 2 Dropshipping?

    With Magento 2 dropshipping, the eCommerce stores will be able to manage the orders and warehouses while optimizing the shipping and transit. The users can identify the “for sale” products and select the suitable warehouse for shipping the products to end customers. As for the shipping fee, it depends on the warehouse, which is why it’s crucial to select the right vendor (yes, it will increase your profitability).

    In addition, Magento 2 dropshipping offers the checkout page when the checkout information is completed. That being said, when a customer accepts to use the checkout page, the shipping fee will be automatically calculated according to order weight, postal code, and said rules. Even more, when the order is automatically updated, which means warehouse management will be streamlined. Some of the features of Magento 2 dropshipping include;

    • The warehouse manager portal will be available, which helps add warehouses to the store and manage everything
    • It skips the retailer-based product storage, which means the retailers can associate themselves with different wholesalers and manufacturers to offer an extensive range of products
    • The orders will be quickly followed, tracked, and managed
    • The store owners can check the product information, along with the warehouse details, so that they can assign specific products to a warehouse
    • The store owners can customize and design their own shipping rules
    • There will be one-step checkout which reduces the business costs and simplifies the ordering process for customers

    Why Is Magento 2 Dropshipping Good For Businesses?

    Magento 2 dropshipping has become quite popular in the online business industry, but nobody really understands the benefits. With this section, we are sharing the top reasons why Magento 2 dropshipping is suitable for businesses, such as;

    • Reduced Startup Costs –dropshipping businesses don’t need to invest anything, and there is no need for capital (you don’t need to buy the inventory or acquire a warehouse on your own). Similarly, you don’t need to spend your time organizing the inventory or hire personnel for fulfilling the orders. That being said, the entry barrier is pretty low, and you can start a dropshipping business even if you have no investment
    • Scalability –the dropshipping businesses have higher scalability because order fulfillment doesn’t depend on the worker count or warehouse location for shipping out the orders. So, it’s an excellent option for business owners who struggle with fluctuating sales
    • Minimal Need For Inventory Management –since there is no need to maintain the product inventory, dropshipping will also reduce the management-related overhead. Similarly, they don’t have to spend time managing and tracking the inventory. Even more, they don’t need to manage to ship since everything is handled by suppliers
    • Extensive Product Range –since you can connect with different suppliers, you can offer an extensive product range to the customers through dropshipping. This contrarily isn’t a viable option in a traditional ecommerce model since then you have to keep the inventory which demands significant capital
    • Flexibility – there is much flexibility with dropshipping because you can control everything remotely. In addition, you can change your product offerings and offer a wide range of products according to market demands

    How To Start A Dropshipping Business With Magento?

    • Finalizing The Business Idea 

    Finalizing the business idea for your dropshipping business is essential. For this purpose, you have to analyze different concepts related to the products you want to sell and make a list. In addition, you will have to conduct in-depth market research to find out the trending products and products that are in demand. To illustrate, you’ve to select a specific niche and use your passion to build a successful brand. For instance, you can use Google Trends or keyword planners to see what people are searching for.

    • Competitor Analysis 

    Every business has competitors, and competition is constantly increasing. For this reason, you need to conduct competitor analysis because it will help test the profitability and possibility of your dropshipping business idea. In addition to checking what they are selling, you must observe their way of selling and marketing the products. Having insights into competitor’s business will help you build a competent store.

    • Suppliers & Test Samples 

    Since you won’t be keeping an inventory, you’ve to select a reliable supplier to ensure your customers are getting the right products and there are zero compromises on quality. In addition, you must consider their services, delivery times, quality standards, and policies because these factors impact how smoothly your business will run. In addition, you must have a meeting with the supplier and share your requirements with them. Once you find a reliable supplier, ask for test samples of the products before signing the agreement!

    • Variety Of Products 

    Now that you’ve selected the supplier, you must invest in an online or web-based store because you will be able to show off your product range. For instance, you can get help from Magento web development services to design the Magento store. In addition, you can look for different Magento B2B extension development services to curate a proper theme for your store. The store must be customized according to business size, industry, and other specific requirements. Last but not least, you should have a proper domain name because it explains to customers what the store is all about!

    • Optimize & Promote The Store 

    At this point, you must have developed the store, and it calls for store optimization and promotion. For instance, you can opt for influencer marketing or Facebook ads to increase your store’s visibility. As far as optimization is concerned, it would help if you worked on the SEO performance to improve the store’s ranking on the internet. On the contrary, you can opt for social media marketing and email marketing if you want to use free promotion tactics.

    What Are The Best Magento 2 Dropship Extensions?

    •  Magento 2 AliExpress Dropship 

    This extension is designed by Webkul Store and is a highly reliable and effective extension. The store owners can import products from the AliExpress store to the online store and start their own business. The users will be able to track the orders (even if there are multiple warehouses). This extension can help organize the warehouses, design the pricing roles, and support the inventory. In addition, you can set different shipping methods according to warehouse location.

    For the most part, this is a paid extension, but there is a free trial for three months. What’s best about AliExpress Dropship extension is that it works with Shopify stores, so Magento to Shopify migration shouldn’t be an issue for you (if you want to change the eCommerce store platform).

    •  Unigry 

    This is another Magento 2 dropshipping extension that allows the users to sell products from various suppliers and ensure convenient inventory management. It can optimize the process between stores and store owners. On top of everything, it can automatically update the shipments and orders. The extension is paid, but features justify the price. We love this extension because it sends automated notices to suppliers and works with a majority of third-party suppliers.

    • Boost My Shop 

    This extension is actually a part of the ERP extension suite, which is known to be a famous warehouse management system. With this extension, the users can import the products and stocks. The workflow can be easily tracked and set the prices. In addition, it provides information about the supplier emails, such as the packing slips.

    • Xtento 

    This extension is a suitable choice for dropshipping stores that have a hard time forecasting shipments and orders. It complies with the majority of suppliers, and the integration process is pretty quick and reliable. There is automated order export available, and keeping track of order status will be easy. This extension has four modules: stock import, order, product export, and tracking number import. It comes with six months of free support.

    •  Shipper HQ 

    The extension is designed and offered by WebShopApps and is a free extension. The extension provides all essential features to streamline the shipping process for different locations. This extension can be easily downloaded and installed on the Magento 2 store. Multiple suppliers can log into the warehouse with this extension, and various shipping methods are also available. Moreover, when the products are ordered, it will send automated notices to buyers.

    •  Amasty 

    The Magento 2 dropshipping extension allows the dropshipping businesses to deliver the products to the end customers from suppliers. It even allows the users to forward various orders from the suppliers (it will save effort and time). There are high-end MSI features available, and store owners will be able to estimate the shipping charges for different warehouse locations. Not to forget, installation of the extension will be pretty convenient.

    •  FireBear Studio

    FireBear Studio has launched another Magento 2 dropshipping extension which helps with time management and streamlines management for a wide range of products. In addition, it can be used to import stocks, irrespective of the formats and sources. This extension also delivers a mapping feature for imports and exports. All in all, you don’t need any programming skills to install this extension, and the interface is pretty user-friendly.

    •  Magespacex

    This extension is an excellent option for people who want to grow their online store and improve the business scale. This is because it allows the store owners to import and sell an extensive product range. The configuration is pretty convenient, and order listings can be categorized into six tabs. Even more, it provides in-depth order fulfillment reports. Lastly, it works with every Magento 2 version.

    What Is Magento 2 Dropshipping Automation?

    Dropshipping automation is the process of utilizing technology to handle different dropshipping tasks just like humans. Automation will remove the tedious and vague tasks so that store owners can focus on more critical business tasks, such as customer service and marketing. Some of the benefits include time efficiency and cost-effectiveness.

    Final Words

    Dropshipping is a fast and convenient way of acing the eCommerce industry, but it demands a fair share of efforts and time to yield favorable outcomes. Similarly, one must work on store development, finding suitable suppliers, and optimizing the store. We have focused on all these essential points with this article, so did you find answers to all your queries?


    How do I dropship with Magento?

    • Develop the base and assign specific products to the warehouses
    • Allocate the ordered items between different suppliers and manage the orders
    • Calculate the shipping costs according to the warehouse’s location
    • Export the orders to warehouse managers or suppliers

    How do I start dropshipping in Canada with Magento?

    Dropshipping in Canada works the same way as it does in other countries. However, you must ensure that you are selling and offering legal products in Canada because there are stringent laws and restrictions.

    How to build a Magento dropshipping website?

    Developing a Magento dropshipping website on your own can be challenging, which is you can hire the Magento web development services. For instance, you can opt for Folio3 because they can help design a structured website that’s functional and reliable.

    How to do dropshipping in the USA from Australia using the Magento website?

    If you want to dropship in the USA from Australia, you need to find a supplier in the USA, and they will send orders to the customers. Also, you don’t need American citizenship to conduct dropshipping business from Australia. However, make sure that you only sell legal products in the USA (some products are legal in Australia but are illegal in the USA, so do your research.


    Folio3, a Software Powerhouse established in 2005, is one of the leading eCommerce solution providers for SMBs and Fortune 500. The Company has expertise in diverse industries such as Animal Care, Retail, Automotive, Food and Agriculture, and Health care. From ecommerce store design and development to full-scale ERP deployment and integration, Folio3 has done it all.