Automated Dropshipping Explained for Beginners

I’ve dove into automated dropshipping in the past when operating some of my dropshipping stores. I want to share with you why it’s worth incorporating into your store.

I’ll explain what it is, how it works, how to integrate it into your store, tips on finding products, and hardware suggestions.

Let’s dive in.

Key Takeaways

• Automated dropshipping saves time and reduces errors in your business.
• Choose the right automation tools for your specific needs and budget.
• Connect your chosen tools directly to your supplier's system.
• Automation streamlines inventory management, pricing updates, and order tracking.
• Marketing, loyalty programs, and customer support can also be automated.

What Is Automated Dropshipping?

Automated dropshipping is the use of software and tools to streamline the various tasks involved in running a dropshipping business. This technology handles repetitive, time-consuming processes without direct input, freeing up your schedule and minimizing errors.

Here's how the process differs between the traditional and automated dropshipping:

Traditional Dropshipping

1. Customer orders: Someone buys something on your online store.
2. You process the order: You manually go to your supplier's website and place the order.
3. Supplier ships: The supplier packages and sends the product directly to your customer.

Automated Dropshipping

1. Customer orders: Same as before—someone buys something cool.
2. The software does the work: Special software automatically sends the order to your supplier.
3. Supplier ships: The supplier ships the product, just like before.

It relies on multiple tools working together. Software connects your online store to supplier websites, automatically sends order updates to customers, and manages inventory levels without manual updates.

That seems vague. Let’s dive further.

How Does Automated Dropshipping Work?

Automated dropshipping relies on the following concept: triggers, conditions, and actions. Think of them as "if this happens, then do that" rules for your business.

Here's how it breaks down:

• Trigger: An event that kicks off an automated process. This could be a customer order, a price change from your supplier, or even a specific time of day.
• Condition: A rule that determines whether the action should happen.some text
  • Is the customer's order above a certain amount?
  • Has the supplier's price increased?
• Action: The task that the automation will perform if the condition is met. This could be adjusting product prices on your store, applying a discount code, or sending the order to your supplier.

Here’s an example:

You sell sunglasses. Your supplier's prices fluctuate, and you want to maintain your profit margin without manually checking.

• Trigger: Supplier updates a product price.
• Condition: Price increase is more than 10%.
• Action: Your store's price for that product automatically increases to keep your margin consistent.

Let’s learn how to do it.

How to Automate Dropshipping Websites

Follow these steps to automate your dropshipping website:

• Search for the Right Automated Dropshipping Tools: Research and choose the software that best suits your store's needs.
• Work Seamlessly With Your Supplier: Connect your tools to your supplier's system for smooth order automation.
• Automate Inventory Management: Set up real-time inventory updates to avoid stockouts and overselling.
• Automate Pricing for Products: Create rules to dynamically adjust prices based on desired margins.
• Add Tracking Updates for Orders: Automatically send customers shipping updates.
• Implement Automatic Marketing Strategies: Schedule promotional emails to run on autopilot.
• Automate Loyalty Programs: Set up point accrual and reward redemption systems for repeat customers.
• Automate Customer Service: Use chatbots to answer common customer questions quickly.
• Automate Chargebacks: Integrate tools to streamline the chargeback dispute process.
• Automate Review Processes: Send automated emails to gather feedback and product reviews.
• Automate Content Creation: Use AI-powered tools to help generate product descriptions and blog posts.
• Ideas of Products to Sell Via Automated Dropshipping: Research trending, in-demand items with healthy profit margins.

I’ll explain what to do and provide examples of the tools you’ll need for accomplishing each of these steps.

Read on to learn more.

1. Search for the Right Automated Dropshipping Tools

What specific tasks do you want to automate? Order processing, inventory updates, pricing, marketing? Knowing your pain points makes tool selection easier.

From there, start exploring popular tools and platforms.

Here are some examples:

• All-in-one platforms: Shopify, BigCommerce, etc. (often have built-in automation or integrate with apps)
• Order & inventory automation: We recommend AutoDS, but there also are DSers and Spocket. 
• Pricing Automation: Prisync, Omnia Retail
• Marketing Automation: Klaviyo, Omnisend

I’ll provide more examples later.

All these tools will likely cost money. However, most will offer free trials (like Shopify). Opt into the free trial to test the software on your store. However, ensure the tools work with your existing online store and chosen supplier.

For instance, if you use Shopify as your platform and AliExpress as your supplier, the tool must work with both to be viable.

Summary: Read reviews, check support quality, and look for tools with features that support your growth goals as your business scales.

2. Integrate With Your Supplier

To enable automatic order processing, you'll need to connect your chosen dropshipping tool to your supplier(s).

Example of the DSers tool integration process.

This usually involves:

1. Finding API keys or credentials: Your supplier will often provide these in the settings of their website or platform.
2. Entering details in your tool: Your dropshipping tool will have a designated area to input these credentials, linking the systems.

Many of these tools will route orders to different suppliers based on factors like product availability, price, or shipping speed. Perfect for if you’re using multiple suppliers (e.g., AliExpress and DHgate).

That’s all the information I can provide in this section because the setup process will vary by tool.

Summary: The exact setup process varies between tools. Always refer to their documentation or support for specific instructions.

3. Automate Inventory Management

You should have linked your tool to your supplier by now. From there, you’ll need to do the following:

• Set stock thresholds: Establish minimum inventory levels. When stock drops below this, the tool can automatically mark the product as "out of stock" on your store.
• Utilize demand forecasting: If your tool offers it, use demand forecasting features to predict future sales and adjust stock levels accordingly, minimizing stockouts or overstocking.
• Sync with multiple suppliers: If you work with multiple suppliers for the same product, set up rules within your tool to prioritize orders based on stock availability or shipping speed.

Then there’s:

Monitor and adjust: Regularly manually review inventory data within your tool's dashboard to make adjustments to:

• Reorder quantities based on sales trends.
• Update pricing if your supplier's costs change.
• Remove or replace products with consistently low stock availability.

Let’s get into pricing.

Summary: Adjust inventory management tools to forecast product demands, monitor and adjust your inventory data, and set stock thresholds.

4. Automate Pricing for Products

It’s time to automate your pricing with these steps:

1. Choose your strategy: Decide how you want to price products:some text
   • Fixed markup: Add a set percentage to your supplier's cost (e.g., 30% markup).
   • Dynamic pricing: Adjust prices based on competitor data or market trends.
2. Set your rules: Within the tool, define your pricing rules based on your chosen strategy. For example: increase price by 5% if a competitor's price is lower or match a competitor's price if they offer free shipping.
3. Monitor and adjust: Regularly review your pricing performance and make any necessary tweaks to your rules to maintain your desired profit margins.

The availability of features and how you’ll set them up will vary by tool. This information is a general guideline of what to consider when setting up pricing.

Summary: Automate pricing by choosing a strategy, setting rules, and monitoring.

5. Add Tracking Updates for Orders

Here's how to automate order tracking updates with a dropshipping tool:

1. Enable auto-updates: Within the tool's settings, turn on the feature that sends order tracking information to your store.
2. Customer notifications: Configure your store to automatically email customers with their tracking numbers and links when their order status changes (shipped, in transit, etc.).
3. Dedicated tracking page (optional): Consider creating a page on your store where customers can input their order number and conveniently view their tracking status.

I highly recommend implementing a tracking page. A dedicated tracking page reduces the need for customers to contact support. This saves you time and improves the overall customer experience.

Real-time order tracking provides a significantly better customer experience. Studies show that more than 90% of shoppers expect to be able to track their orders [1].

This is an example from Goldbelly, which sells expensive food. Their order tracking page doesn’t require much coding and is easy to implement.

Summary: Enable automatic updates and customer notifications to provide customers with real-time tracking on their orders.

6. Implement Automatic Marketing Strategies

Here’s how you’ll want to automate your marketing:

• Choose a tool with marketing features: Select a tool with built-in marketing capabilities or that integrates with dedicated email/SMS marketing platforms (e.g., Klaviyo, Omnisend) and social media management tools (e.g., Hootsuite, Buffer).
• Schedule promotions: Use your tools to schedule sales announcements, product launches, or special offers on email/SMS and social media in advance.
• Utilize segmentation: Divide your customer base into groups (e.g., high-spenders, repeat buyers) for personalized messaging.

You’ll also want to:

Set up targeted campaigns: Create automated email or SMS flows based on customer behavior:

• Welcome series for new subscribers
• Abandoned cart reminders
• Post-purchase follow-ups for reviews or upsells

Mailchimp does a great job of explaining segmentation in email marketing:

You can’t automatically create social media posts (yet). But you can automate when to post them. For instance, if your demographic is most likely online at 8 PM EST, set the content to post on social media at that time for maximum exposure.

You will also need to set up email marketing copy and customer groups initially to ensure you craft messages that draw your customers. Automatic content creation tools—I’ll talk about these in a bit—can help in the process.

Summary: Automate marketing by setting up campaigns, scheduling promotions, segmenting customers, and automating posting times.

7. Automate Loyalty Programs

Most all-in-one platforms will have apps with automated loyalty programs. But in case you’re new to setting them up, here’s how you’d automate it:

1. Choose the right tool: Select a dropshipping tool with built-in loyalty features or one that integrates with a loyalty program app (popular options include Smile.io, LoyaltyLion).
2. Define your rewards: Decide how customers earn points (purchases, reviews, social shares, etc.) and the rewards they unlock (discounts, free products, etc.).
3. Set up automatic accrual: Configure the tool to automatically award points based on the earning rules you've defined.
4. Automate reward redemption: Allow customers to easily apply their points within your store or automatically send discount codes once they reach a certain threshold.

Customers will likely run into issues at some point with your loyalty program and need to contact customer service.

Summary: Automate loyalty programs with the right tool, points, accrual, and redemption.

8. Automate Customer Service

You can’t fully automate customer service, but you can reduce the number of complaints you’ll receive by using these tips:

Choose a tool with help desk features: Opt for a tool with a built-in helpdesk or one that integrates with specialized customer service platforms (e.g., Gorgias, Zendesk).

Create a knowledge base: Build a library of the following:

• FAQs (Frequently Asked Questions): A comprehensive section addressing the most common pre-and post-purchase questions (shipping times, return policies, product usage, etc.).
• How-To guides: Step-by-step tutorials with images or videos to help customers with setup, troubleshooting, or getting the most out of your products.
• Troubleshooting articles: Detailed articles addressing known issues, bugs, and their solutions.
• Company information: About Us, Contact Details, Terms of Service—anything that provides a better understanding of your business.
• Glossary (optional): Definitions of product-specific or industry terms, especially if you sell technical items.

Automate common responses: Use canned responses or templates to quickly address frequent support issues, saving time on repetitive tasks.

Utilize chatbots: Set up a chatbot to use during the following scenarios:

• Outside of support hours: Chatbots offer 24/7 assistance when your human team is offline.
• Simple, repetitive questions: Chatbots effectively answer basic FAQs like "What's your return policy?".
• Lead qualification: Chatbots can collect initial customer details or determine the nature of their issue before routing them to the appropriate department.
• Self-service guidance: Chatbots can direct customers to relevant knowledge base articles, potentially solving the problem without needing a live agent.

Create a knowledge base to address troubleshooting and common issues with your product. For instance, if you run a site that sells appliances (e.g., coffee makers) have articles or videos detailing how to clean or descale the machine.

Or you could be Framework, an awesome company that sells custom laptops:

Their knowledge base has a search bar, which makes finding answers easier. And they have the categories of different articles divided by product offerings:

Use chatbots to guide customers to those articles, but don’t turn their life into a living nightmare if they want to talk to an actual human. Because 80% of customers would prefer talking to humans about many issues [2].

That’s not realistic in many scenarios, for instance with troubleshooting. But it’s critical regarding data handling, returns, product issues, etcetera.

Summary: Reduce customer service inquiries by implementing a knowledge base and a chatbot.

9. Automate Chargebacks

Here's how to automate chargeback handling:

1. Choose a specialized tool: Select a tool dedicated to chargeback prevention and dispute management (e.g. Chargeflow, Chargeback Gurus). These tools integrate with your store and payment processor.
2. Automate evidence gathering: The tool will automatically collect necessary documentation for disputes (order details, shipping proof, customer communication).
3. Create compelling responses: Tools often use AI or templates to generate customized responses to the chargeback reason, increasing your chances of winning.
4. Submit disputes on your behalf (optional): Some advanced tools will handle the entire dispute submission process for you.

Not all chargebacks are preventable, but automation streamlines the process and provides data insights to help you minimize them proactively.

Summary: Automate chargebacks to automatically gather evidence and potentially reduce chargebacks.

10. Automate Review Processes

1. Choose a review app: Select a tool specializing in review collection and display (e.g., Loox, Judge.me, Ali Reviews).
2. Set up automated review requests: Configure the tool to send emails a few days after a customer receives their order, politely asking for a review.
3. Offer incentives (optional): Consider small discounts or loyalty points to encourage customers to leave reviews.
4. Import bulk reviews (with caution): If using an app like Ali Reviews, carefully curate imported reviews from your supplier, ensuring they're genuine and relevant for your store.
5. Showcase reviews prominently: Display customer reviews on product pages and throughout your store to build social proof and trust.

Bulk importing reviews, especially without careful curation, risks including fake or misleading reviews. This can severely damage your store's credibility and ultimately hurt sales as customers lose trust in your brand.

The next step could also hurt your credibility if you’re not careful.

Summary: Import reviews and set up automatic review requests to automate review gathering.

11. Automate Content Creation

You’ll need to get into content marketing to show your audience that you’re an expert in your niche. Or you’ll need to write copy for landing pages (e.g., sales page), product descriptions, and emails. But these take a lot of time.

At the moment, you have access to tools like:

• ChatGPT (Paid and free): Relies on Bing for search results. GPT4 in the paid version is a million times better at providing information than the free version.
• Google Gemini (Paid and free): Buggy free version, but the premium version is great.
• Bing Chat: Free, but had the worst results during testing.
• Jasper AI (Paid): Most expensive and decent for copywriting.

Though many use these tools to write copy, I wouldn’t rely on them to automatically write blog posts. As a lot of the information that these tools provide is incorrect.

For instance, I wouldn’t rely on ChatGPT to write a blog post about gothic fashion trends if you run a dropshipping store about gothic fashion. Because it’ll likely hallucinate most of the information, which will require fact-checking.

And fact-checking will take a long time. If you’re doing content marketing, pay a writer to ensure you provide trustworthy information to your customers.

These tools are great for copywriting (e.g., emails and landing pages). So long as you learn how to make optimal prompts for each tool.

Summary: You can’t truly automate content creation. Yet.

Ideas of Products to Sell Via Automated Dropshipping

Consider these products for your automated dropshipping store:

Phone accessories:

• Example: PopSockets, decorative cases, wireless chargers, screen protectors
• Upselling opportunities: Bundle cases with matching screen protectors, offer phone grips alongside cases, promote car chargers or portable power banks

Eco-friendly products:

• Example: Reusable straws, produce bags, bamboo toothbrushes, biodegradable cleaning supplies
• Upselling opportunities: Cross-sell lunch bags with reusable containers, pair compostable sponges with natural dish soap, promote gift bundles

Fitness gear (home use):

• Example: Resistance bands, yoga mats, jump ropes, adjustable dumbbells
• Upselling opportunities: Suggest foam rollers or massage balls for recovery, promote workout apparel, offer online fitness classes or subscriptions

Pet supplies:

• Example: Durable chew toys, interactive feeders, leashes and harnesses, pet beds
• Upselling opportunities: Pair toys with matching treats, offer grooming tools alongside beds, cross-sell food and water dishes with pet food

Smart home gadgets:

• Example: Smart bulbs, smart plugs, robot vacuums, video doorbells
• Upselling opportunities: Promote smart speakers as control hubs, bundle security cameras with smart locks, suggest mesh Wi-Fi systems for better connectivity.

Opting for less fragile items significantly reduces the risk of damage during transit, minimizing returns and the headaches they bring. Additionally, consider product weight and size. Smaller, lighter items translate to lower shipping costs, boosting your profit margins.

Now that you have some ideas, let’s learn the pros and cons of automated dropshipping.

Pros & Cons of Automated Dropshipping

Pros:

• Time savings: Frees up hours in your day for business growth and strategy instead of repetitive tasks.
• Reduced errors: Minimize human error in order processing, inventory management, and customer updates.
• Scalability: Allows you to handle increased sales volume without needing to hire additional staff immediately.
• Improved customer experience: Faster order processing, real-time tracking, and consistent communication enhance customer satisfaction.

Automated dropshipping saves you time and reduces errors within your business. This enhanced efficiency helps you scale your business more easily.

Cons:

• Upfront investment: Some automation tools have subscription costs, and setup can be time-consuming.
• Technical knowledge: While many tools are user-friendly, some require basic technical understanding or the help of a developer for complex setups.
• Reduced control: Reliance on automation means less direct control over certain processes, which can be an adjustment for hands-on business owners.
• Dependence on suppliers: Issues on the supplier side (stockouts, delays) can still impact your business, even with automation.

Automated dropshipping often comes with an initial investment and requires some technical skill. Additionally, you'll have less control over some areas and remain dependent on your suppliers.

What Automated Dropshipping Software Is Available?

Here’s a lot of automated dropshipping software to consider in different categories:

Product and competitor research:

• Dropship.io (7-day free trial): Specializes in inventory management, includes auto-synching and smart reordering)

Inventory management:

• Spocket (14-day free trial)
• DSers (14-day free trial)
• Inventory Source

Pricing:

• Prisync (14-day free trial): Competitor analysis, dynamic repricing
• Omnia Retail

Tracking updates:

• AfterShip (7-day free trial): Centralizes tracking data, branded tracking pages
• Most major dropshipping platforms (Shopify, BigCommerce) have built-in order tracking that integrates with suppliers

Social media:

• Buffer (14-day free trial): Schedule posts across platforms
• Hootsuite (30-day free trial)
• Later (14-day free trial): Focus on visual platforms like Instagram

SMS:

• Klaviyo
• Attentive (60-day free trial)
• SMSBump

Email:

• Klaviyo (highly customizable flows, segmentation)
• Omnisend
• Mailchimp (1-month free trial): They also offer a free tier with limited features

Loyalty programs:

• Smile.io (45-day free trial)
• LoyaltyLion (14-day free trial)

Customer service:

• Gorgias (helpdesk focused on eCommerce)
• Zendesk
• LiveChat (14-day free trial)

Chargebacks:

• Chargeflow
• Chargeback Gurus

Review imports:

• Ali Reviews (7-day free trial): Specializes in importing AliExpress reviews and offers a free version
• Loox (90-day free trial)
• Judge.me (45-day free trial)

Content creation:

• ChatGPT, Google Gemini, and Jasper (AI-powered text generation for product descriptions, etc.). Google Gemini and ChatGPT offer free versions that aren’t that good.
• Canva (graphic design for social media). Canva has a free version with fewer features.

The free trial lengths of these tools can change at a moment’s notice and we may not catch the change immediately. Do your own research before assuming that you’ll definitely get an “X”-day trial for “X” tool.

There are many tools that I didn’t include. Otherwise, this guide would take forever to write and read. However, these recommendations should give you a good starting point.

FAQs for Automated Dropshipping

Here are frequently asked questions about automated dropshipping.

Is AliDropship Automated Dropshipping?

AliDropship is automated dropshipping. As it automates tracking updates, order fulfillments, and product imports.

Conclusion

Automated dropshipping replaces tedious tasks with efficient software solutions. This saves you time, reduces errors, and lets your business grow.

You’ll need help sourcing products to dropship in your store. Let us help. Learn more about how Dropship can help with our product sourcing tool.