How To Create Passive Income

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1. What Is Dropshipping

Dropshipping is, by far, one of the best business models to emulate for your first eCommerce business. It allows for a single clear benefit that should never be overlooked for the first time online entrepreneurs. 

This benefit is that you don’t need any upfront capital to purchase the products you plan on reselling. This saves a tremendous amount of time, money, and effort. Dropshipping essentially means you need close to zero capital to begin selling, but can still be profitable.

Let me further explain how dropshipping works in order to understand why this is the case. Let’s picture a traditional “brick and mortar” business on your local street corner.

This store might need a showroom, a window display, manikins, signs, and most importantly, possibly thousands of dollars worth of inventory to sell to customers. All of this has to be paid for, upfront before your first customer even walks in the door. You’re stuck with these costs.

However, dropshipping eliminates these expenses. Successful dropshipping works like this, first you set up an online store. If you sell a product, only then do you buy the product directly from your manufacturer.

The manufacturer will then ship it directly to your customer’s door. That’s the entire process.

You never have to buy the product beforehand, nor even see the product as it’s shipped to your customer. The manufacturer is the one who handles the shipping and inventory.

Not buying inventory upfront means never having to buy a product from a manufacturer for it to rest on a shelf and get dusty.

Only when you sell a product, will you purchase from the manufacturer who ships directly to your customer. If it sounds too easy to be true, I can assure you it’s not. Website’s today make this process absurdly easy–even for beginners. More about this later!

2. The Pros and Cons of Dropshipping

Dropshipping Pros:

  • You don’t need to be able to produce or create a unique product
  • You don’t need any upfront capital
  • You don’t need to be a professional marketer or have years of experience
  • You can do this in your spare time, with setup taking as little as a few days, with tools like Shopify and Importify

Dropshipping Cons:

  • Possibility of long shipping times from your manufacturer

Because you aren’t shipping in any traditional sense, it might take anywhere from 2 to 8 weeks for a manufacturer in China, for example, to process an order, and ship it to someone’s doorstep in the US

  • Unreliable Manufacturers

Quality control for your products rests on your manufacturer.

  • Returns and refunds can be tricky

Blurb: Never Fear the Cons: Although these problems may sound serious, don’t worry! As I said before, every business has it’s downsides, and certain problems will be unavoidable. However, I’ll be personally teaching you the ins and outs of this business model, which will effectively bypass, or even eliminate, the vast majority of these cons.

3. Choose the best niche for you and determine your products to sell

As a drop shipper, you do not only compete with other drop shipping companies.

You also compete with large, established retailers. Although an established retailer has much of an advantage over any drop shipper, they sell all types of products.

Even so, they do not have an expertise on all products that they sell. This is where your advantage lies. You will focus on specific products and over time, offer your expertise on them.

Referring to a group of focused products, being niche focused makes the aspects of finding suppliers, building your e-commerce store and generating traffic easy.

4. Identify your competition

It is best to know that you are not the only drop shipper in your niche. If you do not have any competition, it is because other businesses found out the hard way that there is no money, customers or suppliers in your niche. Whatever the reason, you cannot afford to waste your time on a niche that is not lucrative.

5. Building a Shopify dropshipping site

So, you already have a product or niche in mind and you’re ready to start building your Shopify store. To help you do this, here’s a detailed review of the steps you should take to get your dropshipping website up and running.

Step 1: Create a Shopify account

First things first, register an account with Shopify. Head to their website, and click “Get Started” to begin the process. When doing this, it’s best to have a store name in mind, because that’s one of the first things required to set up an account.

In my case, I decided to keep it simple and chose “The Leggings Central” for my store name.

From there, Shopify will ask a bit more information such as whether you’re already selling a product and what your physical address is. Once you’ve entered your details, you’ll be taken to your store’s backend.

The URL for your Shopify backend follows this format: Shopify will send you an email with your store URL, so be sure to bookmark that page for easy access.

Step 2: Add products

Once you’ve set up your account, you’ll be taken to your Shopify dashboard. There are a number of things you can do at this point — you can choose to design your store, set up your domain, or add products, among other things.

My advice? Begin by adding products to your store. I recommend you start with this task for a number of reasons:

  • It gets you into the process of store creation. When you’re dropshipping with Shopify, adding products can take minutes — literally. As you’ll find out below, setting up your items on Shopify can be done with a few mouse clicks, and the simplicity of the whole experience eases you into the process of creating your store and builds your momentum.
  • It will make the design stage simpler (and more fun). It’s far easier to build a site around existing products versus starting from scratch. When it’s time to pick themes and templates, you won’t have to imagine what your store would look like with products in it, because you already took the time to add items to your shop.  

Add products from Oberlo [or your dropshpping solution]

Thanks to Shopify’s acquisition of Oberlo*, adding products that you want to dropship is incredibly easy. Here’s how:

1. From your dashboard, click “Products” on the left-hand side.

2. Select “More actions” then click “Find more products to sell.”

3. You’ll then see Oberlo’s interface, where you can search for products and suppliers. Enter your products into the search bar. (In my case, I entered “leggings.”)

4. Go through the results, then select the items you want to add. You can do this by clicking the “Select product” button.

5. Then on the product page, you’ll see the supply and shipping cost, along with a pricing field in which you need to enter your retail price. Click “Add product” when you’re done, and Oberlo will add the item to your Shopify store.

6. Repeat steps 4 and 5 as needed.

*Oberlo is the default dropshipping app on Shopify, but you can always select a different solution through the Shopify marketplace.

Edit product details

When you’re done adding products from Oberlo, navigate back to the products backend of your Shopify store. You should now see all the items you’ve added from Oberlo.

One thing you can do at this stage is to go through each product and edit its item details. Some product titles (such as the example below) and descriptions are stuffed with keywords, and you need to modify these details for your shop. For best results, add some personality and copywriting flair to make the items more appealing.

You should also take this opportunity to add product tags. Tags can be used to label products so you can categorize them. For instance, if you’re selling apparel then your tags could include “summer,” “fall,” “tops,” “dresses,” etc. For my leggings store, I decided to use tags like “plain,” “printed,” “solid colors,” and “mesh.”

There are a couple of ways to add product tags. First is to do it individually for each product  (see above). You could also add tags in bulk on your product list. Just select the items you want to tag, click the “Actions” dropdown, then click “Add tags.”

Set up your collections

Think of collections as product groups that allow your customers to find items according to their type, category, and more. Here are few examples of the types of collections you can create:

  • Products on sale
  • Product type (dresses, shirts, outerwear, etc.)
  • Customer type (men, women, kids)
  • Product color

For my store, I decided to keep things simple and have three main Collections: “Plain and Solid Colors,” “Printed Leggins,” and “Mesh.”

To add a collection, click on “Products” on your left-hand navigation and then click “Collections.” From there, click the “Create Collection” button, and you’ll arrive on a page on which you can enter the Collection name and add a description.

Collections can either be manual or automatic. Manual collections include only “only the products that you choose individually. Because of this, the collection always contains the same products unless you specifically add or remove products.” This collection type takes more effort to maintain, and it works best if you have a small, curated catalog.

Automated collections, use “selection conditions to automatically include matching products.” You can, for example, set up a collection so that it automatically includes products that have the “sale” tag. Or you can set it up in such a way that all products from a particular supplier ends up in that collection.

There’s no right or wrong way to create a collection, as this depends on your product types and store. In the case of my leggings store, I set things up so that products with the tags “prints,” “mesh,” and “plain” automatically had their respective collections.

Step 3: Set up and design your store

Once you’ve set up all your products, you can move on to designing your store. To get started, click “Online Store” on the left-hand sidebar of your Shopify backend. Depending on your budget, you can choose to opt for one of  Shopify’s free themes or explore their marketplace.

Once you’ve selected a theme, go back to your Shopify backend and click “Customize.”

Customize the look and feel of your site

You’ll be taken to your theme designer, where you can edit the look and feel of your online store. To customize the elements of your site, click through the options on the left-hand toolbar of your theme builder and go from there.

The specifics of this stage will vary depending on your theme of choice. If your theme has a header (which it likely has) then you can upload a logo and customize its size and positioning on your site. If your theme has a slideshow, then you’ll need to add images for each slide.

Speaking of which, images play a big role in the design of your site. And like most things on the Shopify platform, adding images to your store is super easy. You can either upload them from your computer or select pictures from Burst, Shopify’s free stock photo tool. You can do everything — from searching for images to previewing how they appear on your site — right from your theme editor, so no need to navigate out of the page.

You can also customize more general theme settings, including the layout of your site, colors, typography, favicon, social media, and checkout page. Play around with different options and see what works best for you.

Once you’re happy with the look and feel of your website, click Save.

Add pages

The next thing you need to do is to create pages for your site. These could include your:

  • About page
  • Contact page
  • Shipping & Returns
  • FAQ

To create a page, click the “Pages” link on the left-hand menu of your Shopify backend, then click “Add Page.”

From there, enter the title of the page you want to create along, with the copy to go with it. If you’re well-versed in SEO, you have the option to change the meta title, description, URL and handle, so you can specify exactly what you want search engines to see.

Once you’re happy with the page, hit Save.

Repeat this process for every page that you want to create.

Set up your navigation

Once your pages and collections are set up, you can move on to your navigation settings. At this stage, you’re going to specify which pages or collections would appear on your main menus.

Have a think about how you want people to navigate your website. What categories and information do you want them to find? For example, for my leggings store, I wanted people to easily find the different collections I had (i.e., plain colored leggings, printed leggings, and mesh). I also wanted customers to easily find my about page.

With that in mind, I decided to place my “About” page and collections on the main menu of my website.

I also decided that links to my site’s return policy and FAQs should be in the footer.

Follow a similar process for your store. Take time to figure out which pages or links should appear on your menu, and which ones to place on your footer. Once you have this mapped out, follow these steps to set up your site navigation.

1. Click “Navigation” on the left-hand menu of your backend.

2. Select the menu to which you want to add an item (i.e., link, page, collection, etc.)

3. On the menu page, Click “Add menu item.”

4. Enter a name for your item, then in the “Link” field, select the relevant item from the list of pages, collections, or products that you’ve already set up. (Note: this is the reason why you should set up all your products, collections, and pages prior to editing your navigation.)

So, if you want to add your About page to your menu, select “Pages,” then click your About page. Or, if you want to add a particular category or collection, click “Collections” then select the collection that you want to add.

Repeat this process as needed.

Edit your site’s general preferences

Now let’s talk about preferences. This is the section of your Shopify backend in which you can edit your site’s title and meta description. This is also where you can add your Google Analytics code as well as Facebook pixel.

You can find it by clicking the “Preferences” link on your left-hand menu.

Step 4: Add a domain

Got your store all set up? Great. At this point, you should consider adding a domain name. Without a proper domain set up, your store’s default URL is

And while it’s technically possible to run your store without a custom URL, having your own domain name will help your store appear much more professional and appealing.

Fortunately, adding a domain is easy with Shopify. You can find your domain settings under “Online Store” on the left-hand menu of your Shopify backend. Once you’re on that page, you’re given three options on how to handle things:

1. Connect a third party domain to Shopify

If you already have an existing domain (i.e., through a provider like Bluehost, Hostgator, GoDaddy, etc.) you can connect it with Shopify so the system points your domain name to your Shopify store. This process will vary depending on your domain provider, so check with your vendor or visit Shopify’s help page on the topic.

2. Transfer a domain to Shopify

You can also transfer a domain to Shopify, in which case you will be able to manage, pay for, and renew your domain directly from the Shopify backend. Do note that Shopify and your domain provider may have guidelines on how to do this, so check with both platforms to ensure that you’re able to transfer your domain.

3. Purchase a new domain

Don’t have a domain yet? You can buy one through Shopify. Custom domain prices start at $11 USD per year.

Step 5: Set up payments

Next up is payments. You can find your site’s payment settings by clicking “Settings” on the left-hand menu, then clicking “Payment Providers.”

It looks like Shopify Payments and PayPal are enabled by default, but if you wanted to use other payment providers or accept other modes of payment (e.g., Amazon Pay, Bitcoin, Dwolla, Affirm etc.), you can set everything up on this page.

Also note that while Shopify Payments is enabled, Shopify will only be able to transfer funds to your bank account after you’ve completed your account set up and provided additional details. As for PayPal, the company will email you after you’ve made your first sale with instructions on how to set up a PayPal Merchant account.

Step 6: Explore Shopify dropshipping apps

If you made it this far, then congratulations! You now have a nearly working website for your Shopify dropshipping business!

Now, your site is a bit bare bones at the moment, so it’s highly recommended that you add some bells and whistles via the Shopify app store.

For the purposes of this guide, I’ll be focusing on the dropshipping apps that you can look into. Here are some recommendations.

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