Running an online business can be overwhelming, especially when you’re trying to decide whether to start with dropshipping or sell your own products. Each approach has its benefits, and the good news is that Shopify allows you to combine both methods into a single store. This means you can broaden your product range, reduce risks, and increase potential profits without the need for complex systems.

Whether you’re new to eCommerce or an established entrepreneur, Shopify offers tools that enable you to manage dropshipping suppliers and your own inventory in one place. This guide will walk you through how you can effectively integrate both dropshipping and in-house product selling, what the potential benefits are, and how Shopify helps make it all work smoothly.

What is Dropshipping?

Dropshipping is a business model where store owners don’t need to maintain stock. Instead, when a customer places an order, the store owner buys the product from a third-party supplier, who then ships it directly to the customer. This is a low-risk model for new entrepreneurs because you don’t need to invest in inventory upfront.

How It Works on Shopify?

On Shopify, dropshipping is as simple as installing an app like DSers, Oberlo, or Spocket. These tools connect your store to suppliers, allowing you to import products with a few clicks. When a customer makes a purchase, Shopify automates the entire order process, notifying the supplier to ship the item. This reduces your involvement in logistics and lets you focus on marketing and customer service.

Benefits for New Entrepreneurs

Dropshipping is particularly useful for entrepreneurs looking to test the market or diversify their product range without the financial risk of buying inventory. It allows you to offer a wide selection of products, experiment with different niches, and scale your store quickly without worrying about storage space or shipping logistics.

Selling Your Own Products

When you sell your own products, you manage everything from product sourcing to shipping. This hands-on approach gives you complete control over the quality, branding, and customer experience. Selling your own inventory comes with benefits like better profit margins and the opportunity to create a unique, differentiated product that stands out from competitors. With a Shopify store setup, you can easily manage your in-house inventory, track stock levels, and ensure a seamless shopping experience for your customers.

Also Read:- Dropshipping Benefits and Step-by-Step Guide

Shopify for In-House Inventory Management

Shopify’s platform is well-suited for managing your own inventory. It has built-in inventory tracking tools, automated shipping labels, and integration with fulfillment centers if you want to outsource packaging and delivery. Shopify’s tools make it easy to manage stock levels, set up custom shipping rates, and handle returns. By centralizing all your operations in one place, Shopify simplifies managing your product lifecycle.

Benefits of In-House Products

Having your own inventory allows you to maintain control over quality, speed of delivery, and customer satisfaction. You can also develop a strong brand identity by creating unique products. Furthermore, owning your product line gives you flexibility in pricing and customization, and increases customer loyalty because you’re offering something distinct.

Can You Combine Both?

Yes, Here’s How!

Combining dropshipping and selling your own products on Shopify is not only possible but can be highly advantageous. Shopify’s flexible platform lets you manage both business models simultaneously from a single dashboard.

Managing Dropshipping and In-House Products

You can organize your store to display both dropshipped products and your own inventory by setting up different product categories. Shopify apps allow you to automate much of the work, making it easy to track which orders are dropshipped and which are fulfilled from your inventory. You can even customize shipping rates for each type of product.

Advantages of Diversifying

By diversifying into both dropshipping and in-house products, you benefit from the best of both worlds. Dropshipping allows you to offer a wide range of products without committing to stock, while in-house products enable you to control quality and branding. If one business model faces challenges (e.g., supplier issues in dropshipping), the other can compensate, creating a more resilient store.

Benefits of Combining Dropshipping and Your Own Products

Broaden Your Product Offering

Combining dropshipping with your own products allows you to offer a larger variety of items, which can appeal to different customer segments. For example, if you’re selling your own line of premium clothing, you could dropship accessories like bags and shoes. This way, your customers have more options to choose from, and you increase your chances of cross-selling without having to handle more physical inventory.

With a broader product range, you can also test new niches or trends with minimal risk. If a new dropshipped product doesn’t sell well, you can simply remove it from your store without worrying about leftover stock. Conversely, successful dropshipped items can eventually be added to your in-house line if you find a stable customer demand.

Reduce Risk and Increase Profit Potential

One of the primary risks for any business is overstocking or understocking products. By combining dropshipping and in-house selling, you can mitigate this risk. Dropshipping allows you to test new products with no upfront investment. If they sell well, you can then consider adding them to your in-house inventory. If they don’t, you’re not stuck with unsold stock.

At the same time, selling your own products usually yields higher profit margins since you control the entire process. You can price your items competitively while keeping more of the revenue. Dropshipping gives you flexibility and the ability to keep your store fresh, while in-house products offer reliability and better profits.

Better Cash Flow Management

Balancing cash flow is critical for any eCommerce business. Selling your own products requires an upfront investment in manufacturing or purchasing inventory, which ties up capital until the products are sold. Dropshipping, on the other hand, doesn’t require this upfront capital, as you only pay for items once a customer places an order.

By combining both models, you can improve cash flow management. Dropshipping gives you an additional revenue stream that doesn’t require heavy financial commitment. This can offset the cash flow limitations of investing in your own inventory. Furthermore, the flexibility of dropshipping allows you to scale your business faster by offering more products, without the need for a large financial outlay.

Challenges of Managing Both

Inventory Management

One of the main challenges of managing both dropshipping and in-house products is keeping track of your stock levels while also coordinating with third-party suppliers. When selling in-house products, you need to consistently monitor your inventory to avoid overselling items that are out of stock. On the other hand, for dropshipping, you rely on suppliers to fulfill orders, and their stock levels can fluctuate without warning.

Shopify offers inventory management tools to track your own stock, but for dropshipping, you may need to regularly communicate with suppliers or use automated updates to ensure that your product listings are accurate. Failing to do so can lead to customer dissatisfaction when orders can’t be fulfilled due to unavailability.

Customer Expectations

When managing both dropshipping and in-house products, there can be a disparity in delivery times. Items shipped directly from your own stock can often be dispatched faster than products ordered through a dropshipping supplier, especially if the supplier is located overseas. This difference in delivery speed can lead to varied customer experiences, where some customers receive products quickly, and others have to wait longer.

To manage this, it’s essential to set clear expectations on shipping times for each product type in your store. Consider labeling products accordingly to inform customers when an item may take longer to arrive due to dropshipping.

Shipping and Fulfillment Complications

Handling two different fulfillment processes can be tricky. For in-house products, you control every aspect of packing and shipping, allowing you to maintain quality and consistency. With dropshipping, however, you rely on the supplier to handle the logistics, and their packaging may not meet the same standards as yours.

The key to overcoming this challenge is to maintain good relationships with your suppliers. Clear communication is critical, especially in setting expectations for shipping times and packaging quality. You can also offer tracking numbers for all orders, regardless of the fulfillment method, to keep customers updated on their order status.

How to Set Up Dropshipping and Selling Your Own Products on Shopify?

Step-by-Step Guide

Setting up Dropshipping

  • Install a dropshipping app like Oberlo, DSers, or Spocket from the Shopify App Store. These apps connect you with a wide variety of suppliers.
  • Browse the app for products that align with your brand and customer preferences.
  • Add products to your Shopify store with just a few clicks. The app will handle importing product descriptions, images, and pricing.
  • Configure automatic order fulfillment so that when a customer places an order, the supplier is notified and ships the product directly to the customer.

Setting up In-House Products

  • Navigate to Shopify’s product management dashboard and manually add your own products.
  • Input stock levels, shipping rates, and fulfillment methods.
  • Integrate Shopify’s inventory tracking tools to keep track of stock levels and receive alerts when items are low or out of stock.
  • Set up fulfillment either in-house or via a third-party service for your physical products.
  • Managing Both Seamlessly
  • Use Shopify’s Order Management system to track both dropshipping and in-house orders from the same dashboard.
  • Implement automated notifications to inform you and your customers when a product is shipped, no matter the fulfillment method.
  • Consider using third-party apps like Stock Sync to automate inventory updates for your dropshipped items, ensuring your store’s product availability is accurate.
  • Create workflows that streamline repetitive tasks, such as sending order confirmations and processing payments, to reduce the manual labor involved in managing two types of products.

Best Practices for Running a Shopify Store with Both Models

Product Catalog Management

To avoid confusion, it’s crucial to organize your store effectively. You can categorize dropshipped and in-house products separately so customers know what to expect. For example, if your own products ship faster or are of a higher quality, emphasize that distinction.

Label dropshipped items clearly if they come with longer delivery times or specific supplier conditions. Consider grouping products by availability, shipping times, or price to make browsing easier for customers.

Marketing Strategy

When promoting your Shopify store, differentiate between dropshipped and in-house products. Highlight the unique value of your own products, such as superior quality, faster shipping, or local craftsmanship, while also promoting the variety that dropshipping brings.

Consider creating distinct marketing campaigns for each product type, focusing on different customer segments. Dropshipped products may appeal to bargain hunters, while your own products may attract customers looking for premium or niche items.

Pricing Strategies

You may need different pricing strategies for dropshipped and in-house products. For dropshipping, you have less control over production costs, so pricing may depend on supplier rates. Keep your margins healthy by factoring in shipping costs and potential fees.

For your own products, you have more control over pricing, giving you the flexibility to set competitive prices while maintaining strong profit margins. You might also consider bundling your own products with dropshipped items to increase the average order value.

Popular Shopify Apps to Help You Manage Dropshipping and In-House Products

Oberlo/DSers for Dropshipping

These apps are essential for automating the dropshipping process on Shopify. Oberlo and DSers allow you to import products directly from suppliers, automatically update stock levels, and manage orders efficiently. They’re highly recommended for store owners who want to offer a wide range of products without holding physical inventory.

Shopify POS and Inventory Management Tools

Shopify’s built-in inventory management tools help you track stock levels, monitor sales, and manage orders for your in-house products. If you also run a physical store, Shopify POS (Point of Sale) integrates both online and offline inventory, making it easier to manage stock across multiple channels. The system automatically adjusts stock levels when sales are made, providing a streamlined experience.

Apps like Stock Sync can help you manage both in-house and dropshipped items by synchronizing inventory across suppliers and your store.

Conclusion

Combining dropshipping with selling your own products can bring several advantages to your Shopify store. By blending both models, you can enjoy the flexibility and wide product selection that dropshipping offers, while also benefiting from the higher profit margins and control that comes with selling your own products.

Shopify’s robust platform makes managing both models a streamlined experience, allowing store owners to automate many processes and maintain a healthy balance between in-house and supplier products. This hybrid approach enables you to cater to a broader customer base, improve cash flow, and reduce the risks of running an online business. By utilizing Shopify dropshipping app integration services from CartCoders, you can effortlessly connect your store to multiple suppliers, automate order processing, and streamline inventory management, making it easier to run a successful hybrid business model.

FAQs

Can I use multiple dropshipping suppliers with my own products?

Yes, you can use multiple dropshipping suppliers in addition to selling your own products. Shopify allows you to manage all orders from a single dashboard, making it easy to coordinate multiple suppliers and your in-house inventory.

How do I manage different shipping times for dropshipped and in-house products?

You can clearly indicate shipping times for each product on your Shopify store. It’s also helpful to use automated tools that send customers tracking information for both dropshipped and in-house products, helping them stay informed throughout the process.

What are the best Shopify apps for handling inventory management?

Some of the best Shopify apps for inventory management include Oberlo and DSers for dropshipping, while Shopify POS and Stock Sync can help manage your in-house products. These apps offer features like stock level synchronization, order management, and supplier integration.

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