Shopify Dropshipping: Developing a Custom Shopify Dropshipping App

Categories E-commerce | Shopify

Dropshipping is considered as a great way to kickstart a startup eCommerce store. It is the preferred choice for many successful eCommerce entrepreneurs who don’t want to indulge in the intricacies involved in inventory and shipping management.

When combined with Shopify, the ease of carrying out eCommerce operations get even easier.  With Shopify dropshipping, store owners only need to maintain the user experience of the store and carry out effective marketing efforts to generate orders – something the Shopify interface is really good at.

Whenever there is a new order, the fulfillment is handled by the dropshipping provider.

Shopify dropshipping services like Oberlo and Aliexpress have long been the front runners of the dropshipping business model and Shopify partnership with these services is also considered as one of its success factors.

So, how does a Dropshipping service works?

An ideal dropshipping service allows retailers to select the products listed in its database and generate customers for those products through their own stores. Whenever there is an order, the retailer simply notifies the dropshipping service about the customer details and the wholesaler/supplier registered with the drop shipping service fulfills the order.

This way, the wholesaler/supplier is responsible for maintaining the inventory and shipping while the retailer is generating orders.

dropshipping flow

Dropshipping services like Oberlo and Aliexpress have a database of thousands of suppliers who list their products on specific platforms. When a retailer utilizes these apps, they are able to select the products and add them to their store to generate orders.

The Problem?

While Dropshipping remains an ever effective concept to establish an eCommerce store, one can’t deny the fact that the suppliers remain one of the most underrated entities in the dropshipping business model. They face a host of issues while using a dropshipping service, some of which includes:

  • Complicated supplier sign up
  • Recurring subscription costs for utilizing the platform
  • Retailer biased dropshipping platform policies
  • Fewer profit margins as the dropshipping model ads multiple layers of costs to the actual product price such as shipping cost, retailer’s profit, and dropshipping platform cost. There is minimal room for the wholesaler’s profit.
  • Dropshipping platforms like Oberlo uses retailer’s manual authorization before the order is further assigned to a wholesaler. This increases manual work and can also cause unexpected delays depending upon the retailer’s availability to place the orders ahead to the supplier.
  • On platforms such as Oberlo or Aliexpress, there are already several wholesalers available and getting your product listed as well as selected by a Shopify store owner ends up being a complicated task.
  • Payouts are made by the dropshipping service based on their policies.
  • Commission rates for retailers are pre-decided by the dropshipping platform and in many instances, these rates are not editable.

These problems are exposed over the long haul as overtime things keep getting complicated for suppliers and the ROI rate keeps on declining.

The Solution

While there are certainly some drawbacks for suppliers in using a Dropshipping service, this doesn’t mean that the dropshipping business model itself is flawed. The imperfection within a dropshipping business model from a supplier’s perspective is the dependency on a subscription-based dropshipping service.

It is about time suppliers shrug off this dependency on 3rd party dropshipping services. The solution is to directly engage retailers with a custom developed a dropshipping app that uses minimal features to deliver the maximum benefits of a dropshipping business.

Our shopify development agency recently assisted one of our cherished clients (a professional wholesaler) in setting up a custom Shopify dropshipping app which resolves the key pain points of a supplier in a dropshipping business model.

Key features of the custom Shopify dropshipping app includes:

  1. 1. The ability of suppliers to set up their products using the Shopify admin functionalities. The default Shopify inventory updates are directly synced with the app and are made available to all the retailers who are using the app in their Shopify stores.
     shopify product panel
  2. 2. The ability of the supplier to use the default Shopify admin interface for receiving and managing orders. These orders are automatically synced and created depending upon the orders received by retailers using the app in their Shopify stores.
    shopify order panel
  3. 3. A minimal interface for retailers to browse the supplier inventory and select the products they want to add in their Shopify store.

shipping dropshipping app

  1. 4. The ability for a supplier to set up Shipping cost for products from right within the Shopify admin panel.

    shopify shipping setup

    shipping charges info

  2. 5.A straightforward ability for retailers to define their commission for a product.

dropshipping comission management

  1. 6. Finally, automatic and instant payouts for both retailers and wholesalers as soon as a customer purchases a product.

This ability for a supplier to convert their existing store into a dropshipping channel allows them to target retailers who are selling in the same product niche. This opens up a much more straightforward dropshipping channel which promises organized dropshipping operations as well as an improved ROI.

Shopify dropshipping app: The development approach?

Inspired from Oberlo and Aliexpress, the Shopify app was built to accomplish key goals of a dropshipping business model, i.e: the ability for suppliers to share their inventory with retailers so that they can generate orders from their own stores.

However, the purpose of the app was also to cater the key pain points of the suppliers in a traditional dropshipping model. To implement the concept for Shopify, the app is built based as a non-embedded application for Shopify where once a customer installs the app and clicks on it, the supplier inventory is made accessible by loading it in a new tab.

The dropshipping product selection interface is programmed using YII 2.0 on the client-server and the inventory and order data is synchronized between the supplier store and the retailer store through this custom YII app as an intermediate.

This synchronization is established using multiple Shopify hooks and Shopify API.

dropshipping supplier solution

Shopify as an Inventory management tool?

While the app was built specifically for Shopify retailers, the decision to choose Shopify as the admin interface was purely a personal one. This means that a supplier can choose any CMS of his choice to manage the inventory and fulfillment including Magento, WooCommerce, BigCommerce, Opencart or even a custom-built inventory management system as well.

The Inventory management tool had nothing to do with the app which is developed as we only need its API to synchronize the data with our YII based intermediate application.

Since in this specific use case the client preferred Shopify’s admin capabilities to manage the supplier inventory, we utilized Shopify API and hooks to synchronize the stored data with the store data of all the retailers who are using the plugin through our YII based web application.

If the client had preferred any other CMS such as Magento or WooCommerce, then the same process would have been put into place where the only change would be of utilizing the API and webhooks of that specific CMS.

A challenge we faced: Adaptive payments in Shopify

There are several alternatives when it comes to handling adaptive payments, but developing it with Shopify is another thing as there is no default support for adaptive payments from Shopify.

In our use case, to set up automatic adaptive payments we utilized Stripe and programmatically created customer accounts on Stripe for all retailers that use our Shopify app.

Hence the first time a retailer installs the app and access it, he is required to provide his card details which are used to set up a customer account on Stripe.

supplier account setup

Through this approach of creating a separate Stripe customer account for suppliers, we were able to create two simultaneous transactions as soon as a customer makes a purchase on the retailer’s store.

The first transaction takes the order amount and transfers it to the merchant account of the retailer.

The second transaction is then automatically triggered and transfers the amount from the retailer’s customer account to the merchant account of the supplier.

dropshipping app flow

The Shopify dropshipping app uses the same process for handling refunds for order cancellations. By programmatically detecting the product status, the supplier is able to provide refunds which are then automatically refunded to the customer.

To Conclude…

For a successful dropshipping business, it is essential to have a robust supply chain without any hindrances. Our Shopify dropshipping plugin is aimed to deliver just that with a supplier-centric approach.

Retailers interested in utilizing the Dropshipping model are always on the lookout for genuine suppliers. Reaching out to them with a custom Shopify dropshipping app and removing the need for any 3rd party dropshipping service is an ingenious idea.

Are you influenced by this approach and plan on adapting it for your wholesale business? Then hire Shopify developer from The Brihaspati Infotech today to book a free consultation session with the best offshore Shopify development team.