Learning how to make money on Shopify in 2021 is all the rage.
That’s why I decided to write this guide for everyone new to Shopify and interested in turning it into a real money making business. Please note I didn’t say money making “opportunity” as I don’t want to apply any quick schemes. I’m talking about building a real business on Shopify.
This way, you can quit your job. And if you don’t have a job, you can make one yourself.
So we’re going to go back to the basics for this one…
Is Shopify Profitable? How Long Does It Take To Make Money On Shopify?
The thing about Shopify is that it’s just software.
It allows you to quickly set up an online store with a Shopify theme so you can sell your wares. This means that neither Shopify nor Shopify Plus are inherently profitable or unprofitable. It’s just a tool that you can then use to become profitable or unprofitable. This also means there is no timeline in how long it takes to make money on Shopify or Shopify Plus.
If so, it’s going to come down to your economics.
It’s completely possible to start a profitable Shopify store from day one. This assumes you have no inventory costs and no marketing costs. If you’re a VC funded DTC brand, it can take years to actually make a profit since you’re always spending money on pure growth.
With that said, I would say it takes 6 months to start a real ecommerce brand.
Then I would probably give it another 6-12 months to really give it a go before deciding if it’s worth continuing or not based on your experiences and resources. In other words, if you’re really trying to build a real business on Shopify, it’s probably going to be 12-18 months.
This is why I recommend testing ideas before going full out.
But assuming you’ve validated your idea in the early stages, then you have to understand it’s not an overnight thing. It can be for some depending on your product and marketing. But for the average user, it’s going to take some time to become profitable, just like any other business.
The advantage of Shopify is that it’s cheap.
In the past, you would have needed to spend tens of thousands to get a fully functional ecommerce site down. And before that, you would have to slog selling your products in local farmer’s markets before having a chance to get into retail.
Instead, you can build a $1MM Shopify store from the comfort of your own home with no employees.
Why You Should Never Do Shopify Dropshipping
The majority of people who learn about Shopify end up learning about it because they’re interested in dropshipping. It definitely is one way to learn how to make money on Shopify. However, it’s not a route I recommend.
All business models have pro’s and con’s, but dropshipping is inherently flawed.
At the end of the day, you’re selling a product that everyone already sells. Plus, with new dropshippers coming in everyday, tons of more people will eventually sell what you do too. In addition, you also have to deal with the implications of selling “me too” products. This means higher CAC in a world where ad costs are already going up every year.
Plus, we haven’t even talked about product quality and shipping. The quality of dropshipping products tend to be pretty bad. Even the good ones aren’t extraordinary enough to build a real brand around. Plus, the shipping situation is terrible. In a world of 2 day shipping, absolutely no one wants to wait 3 weeks to get their order.
It’s an insane uphill battle with no solid foundation. It’s a bad business model through and through.
So if you’re looking to make a full time income with Shopify, don’t do dropshipping.
With all of that said, there is still one one situation where I would recommend to do it if you’re still inclined to do it. And that is when you’re starting your first ever store and you just want a playground to learn ecommerce marketing from scratch.
Because you can start with 0 inventory, it becomes a marketing game.
You don’t have to worry about anything other than improving your marketing skills. You can go as fast or as slow as you want. And no one can tell you what to do with your store. It’s really one of the best situations to be in if you can’t get an ecommerce job or client.
How To Make Money On Shopify With No Money
If you really want to learn how to make money on Shopify, then pay attention. What I’m about to teach you is the step by step process to make that happen. No, I’m not going to promise you that it will become a million dollar idea. But what I can promise you is that it’s going to be efficient and help you avoid the biggest mistakes most people make.
1/ Come up with your ecommerce store idea through a combination of your own interests, what your direct competitors are selling, and whatever insights you can get from buyers. For example, if you love chocolate, then I would also look into what other chocolate sellers are doing and I would look through any sort of chocolate reviews online about what people think about different brands. When in doubt, sell something people already buy.
2/ Validate your idea BEFORE you buy inventory. This comes down to demand and economics. Once you know what you want to sell, you want to reach out to a few manufacturers and figure out what their minimums, costs, and lead times are. Combined with your price and shipping, you’ll be able to come up with your margins. If they’re over 60%, you’re good. From there, you want to pre-sell your product idea by sending ads to a Shopify store with a fake brand. You want to sell your product idea to 10 customers before making it so you know at least some people want it.
3/ If your product is validated, then get into production and start building an audience. It can take anywhere from 3-6 months to go from idea to final product. So use this time to build an organic audience through Youtube, TikTok, Instagram, Twitter, Facebook, blogging, or whatever it is you want to do. The point is build an audience of your initial buyers for free so that you can get sales momentum from the get-go. These initial customers will become your brand evangelists. The same ones you need to grow later on.
4/ Launch. Once you’re ready to go live, make it an event. You want as many people to know about it as possible. This includes your organic audience, but social media profiles, email contacts, phone contacts, friends, family, acquaintances, everyone. You won’t make millions but it’ll help get the ball rolling, particularly with data. Any data is helpful at this stage of the game.
5/ Look for your 1 acquisition channel. You don’t have to be everywhere when you’re building a Shopify store. You just need to get good at ONE channel, regardless of what it is. Maybe you’re great with FB ads. Maybe you’re great with PR. Maybe you decide to continue building your free audience. Maybe you’re great with influencers. It doesn’t matter what route you go as long as you can find 1 that works and squeeze out all of the opportunity from it.
6/ Profit with additional products. If you’ve done a good job so far, you now have a steady stream of customers. There’s a good chance you’re not really profitable either. But no worries, there is one thing that can help do that. You want to launch a new product. This product can be bundled with your front end product. It can be sold directly to email newsletter subscribers. And it can be used as a marketing tool, such as getting more PR or as your first product on Amazon. The key here is to go slow with new products as they do cost money. So keep an eye out for your cash flow, as well as the size of your audience to recoup your inventory costs ASAP.