How to Build an Automated Dropshipping Business in 2024

Artificial intelligence is revolutionizing the dropshipping landscape, bringing unprecedented efficiency.

As businesses worldwide harness AI to streamline operations and automate repetitive tasks, dropshipping entrepreneurs stand to gain significantly from this technological leap.

Imagine running an automated dropshipping business where inventory management, customer service, and communication are all seamlessly handled—allowing you to accomplish more in less time.

Automation in your dropshipping venture doesn’t just slash costs on big investments; it also frees you to focus on what truly matters—growing your business and enhancing customer satisfaction. With the extra time, you can ensure top-notch quality checks and cultivate deeper customer connections.

In this blog post, we’ll discuss what an automated dropshipping business entails, the various steps, and the software needed to help you achieve the best results.

Let’s get started!

Understanding Automation in Dropshipping

An automated dropshipping business leverages artificial intelligence and machine learning to streamline and automate repetitive manual tasks.

With dropshipping automation software, businesses can significantly cut down on operational costs and maximize their return on investment. Additionally, automation minimizes human errors and accelerates processing times, making operations more efficient and reliable.

Automation in dropshipping

Any eCommerce business that bypasses the need to set up its manufacturing, inventory management, and shipping infrastructure is often classified as a dropshipping business.

But there’s more to it than simply avoiding these setups. You must carefully select and partner with suppliers, shipping partners, and other key players in a dropshipping model.

The real magic happens when you streamline communication between these actors through automation. By harnessing technology to automate processes—like order handling, inventory management, customer responses, sales, marketing, and research—you save significant human hours and reduce the risk of manual errors.

This allows dropshippers to focus on the strategic aspects that drive business growth.

Areas in dropshipping that can be automated

Order processing: Automate processes such as transferring online orders directly to the supplier from your website, and you’re free from the involvement of that very mundane task.

In addition, you can automate tracking orders, update orders for customers, and communicate delivery details.

Inventory management: There are several automated inventory management systems out there that can help you monitor stock levels in real time.

You can also order more products whenever you are running low and get real-time data on inventories so that you do not oversell products or run out of stock.

Customer service: Chatbots, automated emails, and responses can address some of the simple questions customers ask, such as orders’ statuses and basic problems.

This fastens the response rate and adds value to the client relationship.

Marketing and advertising: Marketing dropshipping automation tools are necessary for dropshippers to set up and send out emails, post on social media, and advertise throughout the day.

Marketing automation is used to reach target audiences at appropriate times and direct customers back to a website.

Advantages of automating these areas

Improved efficiency: You’ll be more efficient with automation. Your workflow will improve, manual errors will drop, and your tasks will be carried out at double/triple the speed.

Time savings: Time is the most significant currency in the business world, and the automation of the dropshipping process saves a lot. It frees up your crucial time that you can better spend focusing on your bottom line.

Enhanced accuracy: Order processing, inventory management, and client communication are prone to errors, affecting business performance. However, with automation, human error is eliminated, and accuracy is enhanced.

Scalability: As you scale your business with the volume of orders and ever-expanding product lines, automation helps you streamline these processes and equip you for entering new markets without hesitation.

Better customer experience: Automation is nothing if not for better customer experience. Customers usually have similar questions about your products, which you can leverage chatbots, etc., to answer and deliver quality customer service.

Tools for Automating Your Dropshipping Business

You now understand what preparing an automated dropshipping business plan is all about. Now, let’s look at the unique characteristics and capabilities of the best tools to automate your dropshipping eCommerce business.

WooCommerce

WooCommerce powers over 27.86% of the world’s dropshipping websites and integrates seamlessly with WordPress, offering extensive customization options and robust features tailored to dropshipping.

As a top choice for hosting dropshipping businesses, WooCommerce supports over one million eCommerce stores that have made at least one sale. Its standout features, such as inventory tracking, timely connections with dropshipping suppliers, and integrated order management, save WooCommerce-based dropshippers significant time and effort in managing their stores efficiently.

Key features

• WordPress Integration with customizable template
• The proposal to automate the reconciliation of inventories with suppliers
• Use of technology in order entry and processing
• Synching with dropshipping tools such as Oberlo of the dropshipping industry must be encouraged.
• Secure payment gateways and PCI ‘compliance’

Pricing

Hosting your automated dropshipping business on WooCommerce can cost as low as $3. For company teams, the cost ranges from $99 per month to $5,000 per month.

Visit WooCommerce.

Shopify

As a leading platform for dropshipping, Shopify offers a comprehensive suite of features to help manage stores and boost sales.

Impressively, 7.1% of all products, services, and downloadable applications on Shopify are sourced through dropshipping. Shopify’s powerful marketing tools, efficient product management, and seamless integration with popular dropshipping apps like Oberlo make it one of the most versatile and customizable platforms for dropshippers.

Key features

• Easy to use with drag-and-drop editor
• SKU Tracking and Variant Options in advanced product management
• Automated order processing and shipping label creation
• Integrating your store with AliExpress and many other dropshipping Suppliers
• Safe checkout and anti-fraud protection tools

Pricing

Shopify’s plans range from $29 to $299/month (billed annually), with social selling and enterprise options. The first month is $1. Moreover, for every sale made online, Shopify charges 2.9% and $0.30 for the Basic plan.

Visit Shopify.

Wix

Wix provides dropshippers with the ideal solution for creating visually stunning online stores. Its user-friendly website editor, featuring drag-and-drop functionality and extensive customization options, makes store building a breeze.

Additionally, Wix caters to entrepreneurs by integrating apps that enhance the functionality of their online stores, creating a seamless and efficient dropshipping experience.

Key features

• Wix ADI for easy website creation with drag-and-drop editor for non-technical users
• Larger integration into applications like Modalyst and Printful
• Marketing to optimize the go-shopping experience on any handheld device
• VISA and MasterCard secure payment processing and over 30 payment gateways to choose from
• Customizable product pages with integrated SEO to boost sales

Pricing

Wix premium plan ranges from $17 to $159 per month.

Visit Wix.

Squarespace

Squarespace stands out as one of the top automated dropshipping business tools, offering a powerful platform to showcase products and services.

Its beautifully designed templates, integrated marketing tools, and streamlined order management enable entrepreneurs to create visually appealing stores and deliver an exceptional shopping experience to customers.

Key features

• Attractive templates with a professionally accessible appearance
• Integration with other applications like Printful, Shipstation
• Highly secure order process with SSL encryption
• Automated confirmation of the order and the shipment
• Mobile optimization for an effortless shopping process regardless of the device

Pricing

Squarespace membership starts at $16/month.

Visit Squarespace.

Read also: 6 Dropshipping Email Marketing Best Practices (2024)

Inventory Management Tools

Here are the top inventory management tools for your dropshipping business.

Spocket

Spocket is a highly reliable inventory management software tailored specifically for dropshipping.

It offers an extensive range of standard and premium products from global manufacturers. With features like real-time syncing, automated order processing, and professional template invoicing, Spocket equips merchants with the tools to streamline their operations and deliver an exceptional customer experience.

Key features

• An overarching supplier network on the global market
• Real-time inventory synchronization and auto-updates
• Efficient order management and execution
• Customizable branded invoicing for business credibility
• Expressed as being available to help customers and provide support

Pricing

$99.99/month

Visit Spocket.

Oberlo

Oberlo has emerged as a go-to application for automated dropshipping, especially for those using Shopify.

It simplifies product importation and order management with features like one-click product import, order tracking, and inventory synchronization. These capabilities allow entrepreneurs to reduce time spent on routine tasks, enabling them to focus more on growing their business.

Key features

• It can easily integrate with Shopify, which makes it easy to set up and manage
• A wide product variety in the AliExpress store and other similar suppliers
• Order processing as well as tracking
• Real-time inventory updates to avoid running out of stock levels
• Data analysis and intelligence solutions for better decision-making

Pricing

The plan is free for the first 500 products per billing cycle; after that, it costs $29.90 monthly.

Visit Oberlo.

Read also: How to Create a Successful Dropshipping Business Plan

Inventory Source

Inventory Source allows dropshippers to fully automate product sourcing, inventory management, and order fulfillment.

With features like supplier integration, bulk product uploads, and customizable automation rules, Inventory Source is ideal for merchants of all sizes, whether they run a small boutique or a large eCommerce store.

Key features

• End-to-end supplier enablement for prospective to different products
• Manage multiple constant revisions and feeds of the same products for maximum productivity
• Flexible automation rules to better adapt to its client’s needs.
• Keeping inventory in synch between the various online sales channels
• Quality support and training facilities for success

Pricing

Starts at $99/month.

Visit Inventory Source.

DSers

DSers is an order management tool and dropshipping automation software designed specifically for dropshippers working with AliExpress.

With DSers, you can streamline your workflow through features like automatic order processing, batch order processing, and order tracking. This tool enhances efficiency and convenience and provides valuable insights and analytics to help you make more informed business decisions.

Key features

• Automatic order fulfillment and tracking for streamlined workflow
• Batch order processing that lets you handle large volumes of customer orders at the same time
• Insights and analytics to enable you to make data-driven and informed decisions
• Seamless integration with AliExpress to equip you with myriad products
• Dedicated customer support to help you deliver quality customer service

Pricing

Installation is free, with a maximum of three dropshipping stores and 3,000 products. After that, the advanced plan costs $19.90/month.

Visit DSers.

Printful

Printful is an on-demand printing and dropshipping service provider specializing in personalized products like T-shirts, hats, and mugs.

It offers impressive features that allow merchants to customize products while benefiting from automatic order processing and white-label branding. Printful seamlessly integrates with popular eCommerce platforms like Shopify and WooCommerce, making it a go-to solution for those looking to offer personalized products without the hassle of inventory management.

Key features

• A vast catalog of customizable products to help you establish a brand
• Automated order fulfillment and shipping to save you the time you need
• White-label branding options that can enhance your brand story
• Integration with popular eCommerce platforms
• Dedicated support and resources for merchants to succeed

Pricing

Varies depending on the print demand.

Visit Printful.

Customer Service Tools

Check out these top customer service tools to help your dropshipping business.

Zendesk

Zendesk is an online customer service platform that delivers top-tier solutions for managing customer interactions and support tickets.

It offers a suite of tools, including ticketing systems, real-time chat, and knowledge base creation. It enables businesses to provide professional and efficient customer service, enhancing overall client satisfaction and engagement.

Key features

• Engaging the right channel and delivering a consistent experience to support customers effectively
• An efficient model for ticket management to solve queries
• Real-time communication add-on of live chat
• Knowledge base creation and self-service tools for the customers
• Performance management and monitoring using analytical and reporting tools

Visit Zendesk.

Freshdesk

Freshdesk is a versatile and cost-effective customer support platform that manages tickets and resolves issues.

Its standout features, including drag-and-drop ticket organization, process automation, and customizable support profiles, make Freshdesk a powerful tool for enhancing customer experiences and streamlining business operations.

Key features

• Ticket categorization and auto-assignment for optimal problem-solving
• Multichannel support with email, phone, chatting, and social media
• Self-service with a knowledge base and community forums
• Flexible automation rules for efficient working processes
• Tools for monitoring and measuring performance

Visit Freshdesk.

Help Scout

Help Scout is one of the top helpdesk software solutions. It is known for its user-friendly interface and effectiveness in managing customer relations and ticket services.

As a collaboration tool, it offers valuable business features like shared inboxes, automated workflows, and customer satisfaction surveys, empowering businesses to deliver exceptional support experiences.

Key features

• Shared inboxes for collaborative ticket management
• Automation workflows for streamlined processes
• Customer satisfaction surveys for feedback collection
• Knowledge base creation for self-service support
• Robust reporting and analytics tools for performance tracking

Visit Help Scout.

LiveAgent

LiveAgent is an all-in-one, feature-rich help desk software that enhances customer service, communication, and issue resolution.

With advanced capabilities like ticket routing, live chat, and social media integration, LiveAgent empowers dropshipping businesses to deliver exceptional support experiences across preferred client channels, ensuring seamless and efficient customer interactions.

Key features

• Ticket routing and assignment for efficient resolution
• Live chat functionality for real-time communication
• Social media integration for seamless customer interactions
• Knowledge base creation for self-service support
• Multilingual support for a global customer base

Visit LiveAgent.

How to Set Up Automated Order Processing and Fulfillment

Here’s how you integrate your company with dropshipping suppliers for automated fulfillment.

Establish communication

If you’ve decided to automate your order fulfillment process, it’s essential to communicate this with your supplier in advance. Clearly outline your needs and discuss how they can collaborate to ensure seamless automated order fulfillment.

Establishing proper automation in dropshipping order fulfillment requires all involved parties’ effort and diligent participation.

Explore integration options

Ensure that your supplier’s systems or platforms are compatible with integration capabilities.

If their systems don’t support integration with your automation APIs or automated dropshipping tools, you may need to consider significant adjustments on either side to achieve seamless operations.

Implement order routing

Focus on establishing a seamless order routing system from your website to your supplier. This will free you from the manual handling of bulk customer orders.

Ensure that orders are routed to dropshipping suppliers based on factors like proximity, availability, and other key considerations for optimal efficiency.

Sync inventory

The key to successfully automating inventory management is syncing your supplier’s inventory systems with your eCommerce platform.

Real-time synchronization ensures you avoid accepting orders for out-of-stock items, keeping your operations smooth and customer satisfaction high.

Define fulfillment criteria

Clearly define and communicate the criteria for order fulfillment, including shipping methods, handling instructions, and packaging preferences.

Ensure that both your supplier and customers know these standards, as they should be effectively communicated through your website.

Test integration

Conduct a thorough test before launching your automation setup to ensure everything runs smoothly.

Test the integration of your platform with your suppliers’ systems, including order placement, order tracking, inventory tracking, and other essential features to identify and address any potential issues.

Read also: Dropshipping Basics — A 101 Guide for Small Business Success

How to Automate Inventory Management

Now that you know how important it is to automate your inventory management, here are some techniques and tools to achieve efficient inventory tracking and management:

Centralized inventory systems

Utilize centralized inventory management systems that showcase only available products on your online store portals.

This approach ensures accurate inventory data across all channels, helping you avoid issues like overstocking or stock shortages.

Barcode scanning and RFID technology

Implement automation of inventory level updates by incorporating barcode scanning and RFID (Radio Frequency Identification) technology.

These tools allow for precise inventory tracking and faster updates, significantly reducing time and minimizing errors in dropshipping operations.

Inventory management automation software

Choose an inventory management dropshipping automation software that offers a range of automated features, such as low stock alerts, automatic reorder points, and batch management.

These functions help streamline routine inventory tasks and provide valuable insights into inventory trends and overall productivity, making your operations more efficient.

Automated dropshipping platform integration

Integrate your automated dropshipping software with your inventory tracking system to ensure seamless order processing and automatic updates of inventory records.

This integration enhances communication between suppliers and the eCommerce platform, significantly boosting operational efficiency.

AI-powered forecasting

Leverage dedicated software to forecast future inventory needs by analyzing past consumption, trends, and market conditions.

This proactive approach allows you to manage inventory effectively, minimizing stock-outs risk and avoiding unnecessary inventory buildup.

Customer Service Automation

Let’s explore how you can leverage automation tools to improve customer satisfaction in dropshipping companies.

Importance of timely and efficient customer service

Effective customer service is the key to thriving in the dropshipping industry. It strengthens your market position and builds a foundation for future growth by ensuring customers are satisfied and loyal.

Addressing customer inquiries and resolving issues promptly boosts satisfaction and brand reputation, leading to higher customer retention and positive word-of-mouth recommendations.

Utilizing chatbots and automated response systems

Elements like chatbots and automated response systems significantly reduce the time and effort required to handle common inquiries.

These solutions provide instant support, allowing customers to receive prompt answers to questions about order status, product details, and other related services without needing direct human intervention. The ‘Chatbot’ feature ensures customers can get the information they need anytime, enhancing their overall experience.

Integrating CRM systems for automated interactions and follow-ups

Incorporating customer relationship management (CRM) into dropshipping operations automates customer interactions and follow-ups, significantly enhancing customer satisfaction and engagement.

You can maintain consistent contact with your customers by utilizing automated response emails, confirmation emails, feedback requests, and similar communication methods.

This approach keeps customers informed and tailors communication based on their purchase patterns and preferences, ultimately leading to higher customer satisfaction and loyalty.

Marketing Automation

Automating your marketing efforts in the competitive dropshipping market is crucial to maximizing reach and efficiency, enabling consistent engagement across channels while optimizing resources.

Strategies to automate marketing efforts

Since dropshipping operates in a highly competitive market, automating your marketing efforts is essential to maximize consumer reach and efficiency.

You can maintain an active presence across multiple channels by leveraging tools like email newsletters, social media scheduling, and automated ad campaigns without wasting valuable time.

Email drip campaigns allow for personalized, consistent communication with leads, guiding them toward making a purchase.

Meanwhile, social media automation ensures continuous audience engagement and automated ad campaigns help you target the right audience efficiently while optimizing your budget for better performance.

Tools for scheduling and managing marketing activities

Dropshippers can rely on specialized tools designed to streamline and manage time-efficient schedules to implement marketing automation strategies effectively.

These tools offer features such as email automation, social media calendars, and campaign tracking, making planning and executing marketing activities easier.

With tools like EngageBay, Mailchimp, Hootsuite, and HubSpot, dropshippers can automate every aspect of their marketing campaigns—from content creation to performance analysis—ensuring a seamless and efficient process that maximizes results while saving time.

Exploring innovative marketing automation tools

In addition to well-known marketing automation platforms, niche tools with innovative features offer dropshippers unique opportunities to stand out in a crowded market.

These platforms incorporate advanced technologies such as artificial intelligence, predictive analytics, and deep personalization, enabling businesses to plan for the future and execute differentiated marketing strategies effectively.

By embracing these cutting-edge tools, dropshippers can enhance their marketing automation processes and drive company growth. Notable examples include Klaviyo, a powerful email marketing automation tool; Buffer, a comprehensive social media management platform; and AdRoll, a specialized tool for retargeting and personalized advertising.

These platforms provide the necessary capabilities to innovate and thrive in a competitive landscape.

Read also: How to Scale a Dropshipping Business: 7 Proven Strategies

Monitoring and Analytics

Utilizing analytics tools to monitor and adjust your automated dropshipping systems ensures your business stays efficient and responsive in a rapidly changing market.

Utilizing analytics tools to monitor automated systems

Maintaining the health of automated systems is crucial in the dynamic dropshipping industry. As the landscape continually evolves, monitoring key performance indicators is essential to ensure your business runs smoothly.

Leveraging tools like Google Analytics or native analytics features in platforms like Shopify can provide valuable insights into website traffic, conversion rates, and order fulfillment.

By closely tracking these metrics, you can optimize your dropshipping operations, respond to customer demand with agility, and sustain a competitive edge in the market.

Adjusting automation strategies based on analytics

Using analytics tools, dropshippers gain valuable insights into various aspects of their operations, allowing them to fine-tune their automation processes in line with business goals and customer preferences.

For instance, analytics can reveal where conversion rates dip within the sales funnel, highlighting areas that need improvement.

This data-driven approach enables dropshippers to anticipate potential issues and refine their automated workflows accordingly.

By regularly reviewing key performance indicators and adjusting their automation strategies, dropshippers can enhance productivity, drive business growth, and stay agile in the constantly evolving dropshipping landscape.

Also Read: The Hidden Dangers of Overstocking And How to Avoid Them

Example of an analytics dashboard for a dropshipping business

An analytics dashboard tailored to the needs of a dropshipping business may include key performance indicators (KPIs) such as:

• Website traffic: Over time, the amount of unique and returning visitors, traffic sources, and actions taken by the users.
• Conversion rates: Conversion rate by direct, referral, social media, pay-per-click, keyword, product type, and marketing/promotion.
• Order fulfillment: Basic measures of order or purchase control, such as the volume of orders, the time required to fulfill the orders, and the inventory turnover rate.
• Customer lifetime value: AOV or Average Order Value, RPB or Repeat Purchase rate, and Customer Retention ratio.
• Marketing ROI: Measuring the returns on investment from different marketing channels, advertising campaigns, and promotions.

When displayed in a single online dashboard interface, these metrics allow dropshippers to interpret the results of their automated processes and, thus, make the right decisions to improve their businesses.

Conclusion

Automated tools are the cornerstone of success in today’s dynamic dropshipping landscape, offering unparalleled efficiency, flexibility, and enhanced customer satisfaction.

Integrating automation into your dropshipping business can significantly reduce costs, boost profits, and drive substantial business growth.

Adopt the automation strategies discussed, leveraging technology to gain a competitive edge and deliver exceptional customer value.

As the eCommerce industry continues to evolve, the key to staying relevant is to embrace change and remain open to innovations that may reshape the future of online business.

EngageBay is an all-in-one marketing, sales, and customer support software for small businesses, startups, and solopreneurs. You get email marketing, marketing automation, landing page and email templates, segmentation and personalization, sales pipelines, live chat, and more. 

Sign up for free with EngageBay or book a demo with our experts.

Frequently Asked Questions (FAQ)

1. What are the initial costs associated with automating a dropshipping business?

Start-up costs for automating a dropshipping business range from a few bucks to a few hundred, depending on the server and software subscriptions and installation fees.

However, the advantages arising from its utilization are usually more profound and long-lasting and exceed the costs of the investment.

2. How can automation impact the customer experience when dropshipping?

The benefits of automating the processes in the dropshipping business model, including order processing, inventory management, and customer communication, are always enormous and would go a long way toward improving the customers’ experience.

3. Are there any risks involved in automating dropshipping operations?

Although automation may bring several advantages, some challenges could be technical malfunctions, data loss and vulnerability, and wrong predictions in automatic systems.

Special attention must be paid to these threats while developing and implementing a disaster prevention strategy.

4. How does one choose the right automation tools for their business size and type?

Selecting appropriate automation tools depends on factors such as organization size, business processes’ complexity, and requirements.

Use a combination of research, keep the organization’s needs and future expansion in mind, and select these tools to integrate with the organization’s current tools easily.

5. Can a small dropshipping business benefit from automation?

Absolutely! Automation can be a game changer for small dropshipping businesses.

It can help them cut costs, share less workload between employees and robotic tools and equipment, and thus challenge their giant counterparts. One should begin with function automation; the advancement of the automation process depends on the business’s progression.