Module 2 - Setup Your Shopify Store

Nov 14

Written By Tesia Blackburn

From last module you should have downloaded and used the guide “Setup Your Shopify Trial Account.”

Let’s look at vendors and products now before we move into completing the store setup.

Define Your Product

First, decide what type of product you want to sell.

Here are some categories to think about:

Apparel - tee shirts, hat, scarves, etc.

Accessories - phone cases, tote bags, jewelry, etc.
Homegoods - pillows, mugs, bedding, etc.
Art Reproductions - prints, canvas, metal, etc.
Printed Products - greeting cards, calendars, journals
Books - How-to books, artist catalogue.
Services - Workshops, classes, coaching, etc.

Set Up Your Vendor Account

Next let’s look at setting up your account with a vendor. I’m going to use Gooten as my example. First you’ll want to set up your account. Visit the App Store in Shopify and search for Gooten. Add the App to your Shopify store. Refer to the workbook for these steps also.

First open your dashboard in Shopify and tap on Apps.
Next tap on “Visit the Shopify App Store.”
Then search for the vendor you want. You can put in a generic search like “print on demand” or a specific vendor, like Gooten. I’m using Gooten for this example. When you get the vendor you want, tape on Add App.
On the next screen tap “Install app.”
The next screen will show your vendor (Gooten in this case) dashboard.
There may be minor differences in your vendor dashboard but basically go into settings and set up your business with the vendor.
Put in your billing information so that you can order samples from your vendor. Remember, you pay your vendor for every order. Then they make the product and ship it to your customer.
Add your business information, website and so on.
Make sure “fulfillment” is turned on so that your vendor can automatically fulfill your orders as they come in.
Once all of that is done, you can head over to the Vendor Catalog and decide which of their products you want to sell.

Product Cost Analysis

Before you start selling you need to know what it costs to make the product, what your markup should be and what your profit margin is.

Ugh, right? But trust me, if you don’t do this, you will have no idea what it actually costs to make and sell your product. And you may inadvertently offer sales or discounts on products that don’t have enough margin to handle them.

Let’s look at a simple way to figure out the cost and profit of your product.

In the example above, our initial cost for the product is $12.99. Add shipping to that for a final wholesale cost of $18.98. Most vendors do not charge sales tax to stores. Next, let's add an even ten dollars to our product as our markup. Our customer pays $28.98 for our product. We don't charge shipping on anything in our store. More on that later. Now deduct the credit card fees from what your customer pays. Our Net Revenue is $27.95. Deduct the final wholesale cost of $18.98 for a Profit of $8.97. Now divide your Profit by your Revenue for the Profit Margin of 32%.

Why is this exercise so important? Because if you don't know these numbers, you could actually lose money, even though you are making sales.

Let’s see what happens if we have a product with only an 18% profit margin and we put it on sale for 20% off.

You will lose money on every sale.

This is why it is vitally important that you understand how to price your products.

Now you know who your customer is and how much it costs to make a product for them.

Your homework this week:

Setup your vendor account. Watch the video “Set Up Your Vendor Account.”
Read the article in Resources “When Your Craft Or Hobby Becomes A Business.”
Read the article in Resources “How To Register For A Sales Tax Permit In Every State.”
Choose one product from your vendor and do a cost analysis of it.

Module 2 - Setup Your Shopify Store

Module 1 - What is E-Commerce?

Module 3 - Shopify Vendor Settings; Working with Collections; Working with Outside Vendors