Hundreds of new business partners per week generating thousands of orders and thus impressive growth in a short space of time – and all for a manageable investment? What sounds like a crazy pipe dream is in fact possible in reality. After all, anyone who has understood the dropshipping concept and offers their products via an interface to be integrated into various store systems can profit greatly from it. But does this also work with print products? Beyond Print has investigated…
…namely at the Spread Group. The company, headquartered in Leipzig and with a total of five production sites in Germany, the Czech Republic, Poland and the USA, specializes in individually printed clothing and textile products and is active in the world of digital commerce with a total of five brands: Spreadshirt Marketplaces, Spreadshirt Create Your Own, Spreadshop, TeamShirts and SPOD. SPOD in particular, the youngest business unit of the company group, stands out, as it is not based on the classic principle of an independently operated online store or marketplace, but rather encompasses the interface technologies with which other online stores can integrate the products of the Spread Group into their own portfolios. In other words, classic dropshipping.
Shopify boosts print-on-demand
Anyone who has already dealt with e-commerce systems will have noticed one thing recently: Shopify, in particular, has discovered the topic of print-on-demand (POD) for itself and is vigorously promoting it with special landing pages and blog posts, to name a few. The goal pursued by the Canadian software specialist with German roots is as simple as it is successful: Shopify enables the users of its store solution in this way to offer a wider range of products – without (and this applies to both Shopify and the store operators) having to invest in know-how, production or logistics themselves. Sounds like a win-win situation? Not quite, because strictly speaking, this is a win-win-win situation of three business partners.
Tripolar business relationship
In order for dropshipping with print-on-demand items to work, in addition to the developer and provider of the store software and the store operator, someone also needs to take care of the production of the print products and be able to digitally map all the necessary processes, from order entry to shipping. One such production partner, as already mentioned, is Spread Group, which with its plugin – or more technically correct – its API called “SPOD”, has been listed in Shopify’s U.S. Appstore since the beginning of 2020, and in the European Appstore since last year.
“We have been building print-on-demand for over 20 years, with production facilities in Europe and North America, with our own distribution channels in the form of marketplaces and our own stores. We always keep an eye on new distribution channels and find out which ones make sense,” explains Dennis Dörfl, who has been Commercial Director for the Spreadshop brand since November 2020 and Commercial Director for the company’s fulfilment division since January of this year. “That’s where you naturally look at the big e-commerce platforms of this world, and with a market share of around 30 percent in the U.S., Shopify is one of the big players.”
Using the multiplier effect
The Spread Group itself is also a “big player”, namely in the printing industry. The company, which employs more than 1,000 people worldwide and generated sales of 169 million euros in 2020, maintains a large IT development team in-house. “But let’s look at Shopify, there are hundreds of in-house developers sitting there building integrations to Shopify, plus marketing applications on top of that. If we wanted to develop all these functions ourselves, then we as Spread Group would have to invest millions of euros and years of time to even get there. However, if we ‘plug in’ to a system that already comes with all these functions, then we can save ourselves this basic investment and address millions of potential new business partners in one fell swoop,” explains Dennis Dörfl. “You can actually call this a multiplier for our business.”
Most important sales channel for the Spread Group
Admittedly, in the real world of commerce, the statement of being able to address so many potential business partners more or less simultaneously would sound simply crazy. But in the digital world, in digital commerce, orders of magnitude like this are quite realistic. After all, every user who operates a Shopify-based store is also a potential user of the POD dropshipping interface. The Commercial Director of Spreadshop and Fulfilment also backs this up with figures: “In the USA, we record five-figure registrations from new partners via the Shopify sales channel every month, which in turn generate seven-figure orders for us every year. Shopify integration has become one of our biggest businesses in the North American market in just two years.”
And because it’s doing so well in the North American market, the plugin has also been available in the European Shopify store since last year. And here, too, the signs are pointing towards growth: although no targeted marketing measures have been initiated yet – that is the task of Dörfl and his team this year – the company says it is already seeing high triple-digit partner registrations per month.
Only something for the big guys?
But what does the plugin, the API, actually do? It enables nothing more than end customers to access the Spread Group’s product range and print-on-demand tools from the Shopify environment of their familiar online store. What sounds so simple, however, is not quite so trivial in terms of implementation. And yet, Dennis Dörfl is certain that even smaller businesses and print companies can benefit from the dropshipping trend and generate additional business. “That’s the beauty of it,” he explains, “you can do the same thing as a ‘smaller’ business and be on the same ‘stage’ as the big ones, namely Shopify’s Appstore.”
Not rocket science
The fact is: yes, Spread Group’s size and years of experience in digital commerce give it a certain advantage in implementing such an integration. But it is also a fact that plugin programming is not rocket science and can also be implemented by companies that have themselves either no IT department or only a small one. “Shopify specifies the cornerstones of what such a plugin must look like quite precisely. Anyone can read through the specifications and program a plugin – or have it programmed. Via service websites such as fiverr.com, which now also exist in Germany, you can quickly find experts who can program this interface for you,” the expert encourages. In addition, it is up to the user to decide how complex the interface will be in the end.
Spread Group put a good six months into the API and also worked with Shopify’s developers. “But it doesn’t have to be that way. You can keep it much simpler.” A few hundred euros can go a long way when it comes to the API, Dörfl says. “Shopify then looks at the interface, releases it if everything fits, and puts it in the app store.”
It all depends on the right marketing
Speaking of the Appstore, Shopify integration itself is relatively simple, but that doesn’t mean it’s a foregone conclusion. As the industry expert explains to beyond-print.de, the topic of marketing plays a major role. “As a group, we naturally use the entire toolkit of digital marketing, Google Ads, content marketing and Co. But from our experience, Shopify’s Appstore plays by far the biggest role in the plugin’s success. It is the art of appearing there at the very top or relatively high in the search queries, having a large number of so-called reviews, i.e. user feedbacks – and reacting and interacting to them. The categories you put your API into and how many of them you use, how you write the introduction text, or which keywords you use have a big impact on conversion, i.e. on how many of those who see the API end up installing it. If you only have a few resources for digital advertising, you should concentrate first and foremost on optimizing your presence in the Appstore and act tactically,” is Dennis Dörfl’s advice.
In terms of marketing, however, as he explains, another effect of dropshipping takes effect: all the store operators who install the plugin to expand their assortment thereby become business and sales partners, who in turn are themselves interested in the success of their stores and invest a corresponding amount of marketing investment in their marketing. “In principle, this is the most beautiful situation you can have. The store operator takes care of making his offer known himself – and we as dropshipping partners participate in his success. We remain invisible in the background and produce and ship the orders. In principle and in the broadest sense, the store operator does the advertising for our products. That makes a lot of difference, considering that most of the costs today go to advertising.”
Building processes or building on existing processes?
To make sure everything runs smoothly, there are a few things to keep in mind when it comes to Shopify integration, as Dennis Dörfl explains. Processes, for example. “If I’m already working with partners and running a B2B2C (Business to Business to Consumer) business model, then I already have the processes I need for dropshipping as well. If I’m only doing D2C (direct to consumer), meaning I’m selling directly to the end customer, then I may still need to build up a few things and know-how, for example with regard to accounting, in bookkeeping or tax issues.” Here, online printers in particular could rely to a large extent on “tools” that they already use in their daily business.
“Blind date” between business partners
Another aspect is also brought about by the fact that – unlike in the traditional, real-life world of commerce – you don’t know your business partners in person and can’t check them out. “You have to be clear about one thing: We work with many unknown partners, everything takes place virtually, and in principle anyone can use our plugin. This inevitably raises the question of payment and creditworthiness,” Dennis Dörfl points out.
Although the store operators are already verified when they register with and by Shopify itself – that is already a first security barrier – but you should not rely on that and take appropriate precautions yourself.
“So that you don’t run into a financial fiasco there, you should think about it carefully beforehand. Anyone who does not yet have a way of checking the creditworthiness of partners in their company today should think about purchasing appropriate software solutions.” Those who cannot or do not want to do this (yet), however, have the possibility to counteract possible fraud initially also via the payment methods. “Offering only advance payment or limiting the order quantity, for example, can be tried and tested means,” says the expert. “And if you notice that things are going well, you’re bound to be happy to invest in a little more security and new tools.”
Further do’s and don’ts
But the print service provider should also pay attention to the range of products that the store operator can access via the API. And Dörfl is not just referring to the fact that it is better to offer a smaller, but highly sought-after range of products rather than the entire belly-load. Rather, as the Spread Group’s own experience shows: “Many companies underestimate – in a positive sense – how quickly you can grow with Shopify integration. If you’re not prepared for it and you can’t deliver, then the whole system collapses. We are noticing this ourselves: In the print-on-demand business, Christmas is the peak season, when twice as many orders come in as during the rest of the year. Even we come close to our capacity limits. So, we have to be able to counteract that to balance supply and demand.” That means the production partner has to keep an eye on the range on offer and be able to deactivate individual items if necessary.
Sales rep of the month: the Shopify app store
If you take all these points to heart, you can – of this the Commercial Director Spreadshop and Fulfilment is convinced – indeed build up a handsome additional business in a short time. “Programming the plugin and hooking into Shopify or similar store systems is probably the smartest sales strategy you can use these days. Everyone should consider this as a sales channel, and not just with platforms like Shopify, but with as many as possible,” says Dennis Dörfl. Acquiring customers today is such a big investment, he says, that the integration costs and the time and effort required to maintain the plugin should be quickly offset.
“I get into a pool of existing entrepreneurs here that I would otherwise have to buy at great cost and time. And thus, do not need an expensive sales department, nor high investment in digital advertising to attract distributors. I achieve a much better result in a much shorter time. This is simply a distribution channel that I think you need to tap into. And since Shopify is also evolving itself as a platform, I participate in that work every time. It opens up worlds that would be difficult to do through traditional channels, and that would take a lot of effort.”
Online print shops certainly have an advantage here thanks to their existing business model, but even they are not spared one thing: a minimum of market research; among other things, with regard to the right IT partners for programming the plugin, selecting the right products (specialization beats belly-loading), determining the most economically sensible framework conditions, and regarding the right marketing of the API in the Appstore. Nevertheless: It is worthwhile to deal with Shopify in detail in any case. After all, dropshipping opens up many new possibilities that print service providers should not leave unchecked. Incidentally, rissc and bebeyond have also recognized the potential of Shopify. The software developers from Ludwigsburg and Willich have long been offering their expertise in terms of integration with the well-known digital commerce platform.