Americans love discounts. Over two-thirds of shoppers make impulse purchases just because the item is on sale. Nearly 95% of internet users actively search for discounts when they go online to shop. Before you can take advantage of the power of sales for your store, it’s essential to know the right way to make discounts on Shopify with dropshipping.
Can You Create Discounts on Shopify for Dropshipping Products?
Shopify stores work well with the dropshipping business model, letting you add products, manage orders, and create discounts. There are limits to functionality out of the box, but Shopify’s user-friendly interface always supports the following types of sales and discounts:
- Percentage-based discounts: 25% off
- Flat discounts: $10 off any order of $80 or more
- BOGOs: Buy three, get one free
- Conditional sales: Buy one, get the second 50% off
- Coupons: Get 15% off your next purchase
You can create Shopify sales for specific items (e.g., one-hour flash sales), entire collections, or your whole store. Some store owners oversee order fulfillment manually, but many use automated dropshipping instead. That way, your supplier can see, process, and ship items as soon as customers make a purchase.
How Do You Make Discounts on Shopify With Dropshipping Apps?
StayTuned Apps offers powerful solutions for Shopify store owners looking to create strategic discounts without damaging profit margins. With apps that support tiered pricing, BOGO deals, and customized promotions, StayTuned ensures your discounts work for your business, not against it. First, let’s cover the step-by-step process of creating a sale for dropshipped products on Shopify. After that, we’ll talk about ways to make sure you’re still making money with discounts.
1. Create a New Discount or Sale
Open your Shopify store admin, and select the “Discounts” tab. Then, click on the “Create discount” button at the top of the screen.
2. Choose Between Discount Codes and Automatic Discounts
Shopify divides discounts into two main categories: discount codes (basically coupons), and automatic discounts at checkout.
3. Customize the Discount or Sale
For this example, we’re going to walk you through an automatic sale, but the steps are practically identical for discount coupons. Here’s what to do:
- Choose the type of discount: Select “Percentage,” “Fixed amount,” or “Buy X get Y.”
- Add minimum requirements: For BOGOs, set the minimum purchase. One item is the minimum, but you can also require more items (buy three, etc.) or a minimum spend (e.g., a $100 purchase).
- Choose your products: Under the “Applies to” heading, choose the collections or individual items you want to create the sale for (such as “Women’s T-Shirts”).
- Set the start and end dates/times: You can create sales that run for minutes, hours, days, or weeks.
Once everything looks good, click “Save.” You can use saved sales again in the future, such as Black Friday sales.
Are Discounts Good or Bad for Dropshipping?
There are many benefits to discounts for Shopify dropshipping, but your profits can suffer if you’re not careful.
Store Promotions Make Your Marketing Better (Positive)
If you’re investing in Google Ads or Facebook Ads to attract new customers, time your campaigns so they line up with big sales or promotions. That way, visitors have an extra incentive to like you, remember you, and return.
Offers Build Brand Loyalty and Repeat Purchases
Almost 90% of online consumers are happy to give you their email address if it means getting a discount. In fact, the only reason 80% of shoppers sign up for promotional emails at all is to get discounts.
Discounts Convince People To Buy (Positive)
Four out of five Americans purchase from brands they don’t know as long as there is a good discount. If you have plenty of traffic but not many sales, tantalizing offers may be exactly what you need.
Hurts Your Profit Margins (Negative)
Dropshipping often has tight profit margins. You can get around this with premium print-on-demand goods or a niche audience, but you still need to be careful how deep your discounts are.
How Do You Make Money With Dropshipping Discounts on Shopify?
The key to avoiding the downsides of discounts with dropshipping is to plan carefully instead of cutting prices left and right.
Calculate All Product Costs
Your costs include the following:
- The item purchase price
- Shipping costs (usually a percentage of the total sale)
- Listing fees and transaction fees (Etsy charges $0.20 + 6.5%)
- Payment processing fees (usually between 1.5% and 3.5% of the total sale)
Don’t forget to calculate other costs from running your store, like your Shopify subscription, internet costs, and any paid app subscriptions. Divide these overhead costs by your total monthly sales to know how much you need to make per sale to stay profitable.
Establish a Minimum Sale Price
Shopify offers a free profit margin calculator. Just type in your total item costs, set your markup (10% to 20% should be your minimum margin), and the result is how much you need to charge. Marking up a $20 item by 20% gives you a minimum price of $24, or $4 in profit.
That means that if you normally sell the item for $35, your maximum discount would be 30% (for a sale price of $24.50). Anything more than that and you’re hurting your business.
Create Alternative Incentives
Huge store sales aren’t the only way to entice customers with dropshipping. A better way to attract attention and protect your profits is using StayTuned apps for creating bundles, tier-based discounts, and upsells.
Take the example of your $24 minimum sales price for tees. If you multiply that by 4, it means you need to make at least $100 for four tees. What if you offer a build-your-own-bundle offer for $99.99?
Customers see that the normal price is $35 x 4 = $140, so they’re saving $40 with this incredible bundle! That’s also the equivalent of “buy four, get one free.” Best of all, they get to choose which items they purchase, so they can pick out gifts for friends and family. Everyone wins.
How To Make Discounts on Shopify With Dropshipping Apps
You can make discounts on Shopify with dropshipping, but you need to be careful, clever, and creative. StayTuned Apps helps Shopify dropshippers create strategic discounts without sacrificing profits. The right apps help you protect your profits while giving new users a reason to visit your store. Find the perfect dropshipping apps to supercharge your sales today.