EB is your guide to eCommerce


How much money do you need to start dropshipping? Here is an honest answer!


How much money do you need to start dropshipping? Some may say it is zero bucks! But, in reality, you need to spend more money to start dropshipping. Let’s find an honest answer to the most frequently asked questions about starting a dropshipping business.


Advertisement


First, let me tell you a little bit about myself. I have been running a couple of successful dropshipping stores for years now (and, had around 10 failed attempts). And I make a decent amount of money from these two stores. Therefore, I believe that I am qualified to answer this question of how much money do you need to start dropshipping.

Related: How to start dropshipping – the beginner’s guide

Can you start dropshipping without any money?

Well, theoretically yes, but in practice NO! For example, you can flip AliExpress products on eBay to start dropshipping for free. But, even you do so, there are some inevitable costs such as advertising costs. Therefore, I am going to leave my answer here; NO, you cannot start dropshipping without any money.

Even though dropshipping is not free to start; in fact, dropshipping is one of the cheapest ways to start a business right now. Let’s see how much money you need to start dropshipping.

There are three main costs associated with starting a dropshipping store

  1. Cost of having an online store ($$)
  2. Cost of testing and finding winning products ($)
  3. Cost of advertising and marketing ($$$$$)

1. The cost of having an online store

In this post, we will talk about the costs associated with two methods of having a dropshipping store. We will talk about how much money you need to start dropshipping on a WordPress and a Shopify store.

In my case, I have my dropshipping stores built on WordPress. However, Shopify is also a popular and beginner-friendly eCommerce shop building platform. Therefore, to make everyone happy, let’s talk about both platforms. If you are thinking of starting dropshipping on eBay, check this guide on how to sell on eBay. There we talk about how much money do you need to start dropshipping on eBay.

How much money do you need to start dropshipping on WordPress

Here is a basic cost breakdown:

  • WordPress.Org – FREE
  • Buying a domain – $14 per year
  • Cost for hosting – $3 – $70 per month
    ($3 for cheap shared hosting, $30 for managed WordPress hosting for better speed)
  • WooCommerce plugin – FREE
  • Theme – Free
    (or you can buy a paid theme for around $30)
  • Other plugins for SEO and site speed – FREE
  • Other dropshipping plugins – FREE

Altogether, the minimum cost would be around $20 to start, and $3 per month to run.

Read more about the AliExpress dropshipping plugins.

Hey, do you know that you can simply hire a freelancing eCommerce site developer to create a stunning WordPress or Shopify online store for less than $50? Just hire a freelancer and save your time to focus more on your business.

How much money do you need to start dropshipping on Shopify

Here is a basic cost breakdown:

  • Shopify basic plan – $29 per month
  • Buying a domain – $14 per year
  • Oberlo dropshipping App – FREE
  • Theme – FREE (Or, you can buy a paid theme for around $180)
  • Other Apps for payment gateways, SEO etc. – FREE

Hey, do you know that you can simply hire a freelancing eCommerce site developer to create a stunning WordPress online store for less than $50?

Obviously, Shopify costs more than WordPress. However, Shopify is a beginner-friendly shop building platform. Starting an eCommerce store on WordPress will require a little knowledge of basic HTML and CSS practices. However, there are plenty of open forums and excellent guides to learn everything you need to know about both of these platforms.

Also, if needed, you can hire a freelancer to build your eCommerce store for around $50-$100. So, you don’t have to worry about all the technical stuff that you have to go through. Also, it can save your valuable time. However, if it is possible, I would recommend you to research and build your store all by yourself. It will help you to maintain your site without having to spend money on every tiny change.

2. The cost of testing and finding a winning  product

When it comes to dropshipping, you won’t see or touch the product that you sell. Therefore, you need to be extra cautious about what you sell and about your suppliers.

After spending hundreds of bucks on ads, you don’t want to get an email from your suppliers saying there a delay or something. Also, I know that you don’t want to get any bad customer reviews saying the product doesn’t match with the description as well. That’s why you need to spend a little bit of money for product testing and finding winning products.

How much money do you need to spend on finding winning products to start dropshipping?

I would recommend spending around $50-$100 to buy the samples of the products that you are planning to sell. So, you can evaluate the shipping process, costs, and product quality before selecting a winner.

I would usually test around 5 products (variants, or different products) before deciding on which product to sell. And, one other important point is that you don’t need a lot of products on your store to start dropshipping. You can test around five products to list on your store.

However, before you go ahead and purchase sample products, make sure to read the reviews and comments to see whether that product actually fits into your requirements. So, you can save money by not having to test unfit products.

3. The cost of advertising

When we talk or create a budget about how much money we need to start dropshipping, we often forget the importance of spending enough money on advertising. In my experience, the highest amount of money that you need to spend to start a dropshipping business comes from the advertising budget.

There is no point of having a fantastic website and the best products in the world on your store unless you get enough traffic to your store. That why your top priority should be on advertising and marketing.

Learn 30 essential marketing skills for eCommerce beginners

How much money do you need to spend on Facebook Ads for your dropshipping business

It is really hard to give a specific value to this question. There are hundreds of variants that can affect your ad budget. For example, you need to test different ad copies, audience demographics, and many other factors. Check this post on advertising on Facebook for details.

Even with years of experience, sometimes I still have to spend more than $150 on FB ads to find the optimum ad setup that works for my new products. However, in some cases, it can even work on the first try. If so, you won’t have to spend at least $20 get the best setup. Once you find the best setup for your FB ads, it is all downhill.

Therefore, I would recommend keeping at least a $150 budget to test your ad campaign when starting a dropshipping business. Do not think of it as a cost! After all, you are starting a business. So, it is more of an investment for you.

So, how much money do you need to start dropshipping? The final calculation

  • Building an online store – $20 or WordPress, $50 for Shopify
  • Hiring a freelancer – $70 (optional)
  • Product testing – $50
  • Advertising – $150

Altogether it will cost you around $300 to start dropshipping, inclusive of everything. Now, come on, $300 is nothing compared to starting a regular type of business. Usually, starting a business would cost you more than $5000. So, $300 is peanuts compared to that cost. That’s why dropshipping has become a popular business method over the past decade.

So, I hope you got a comprehensive answer to the question “how much money do you need to start dropshipping?” And, I know you guys have more questions about starting a dropshipping business. Keep in touch with us. I will keep sharing my first-hand experience in starting a dropshipping business. Also, I will keep answering all your burning questions about starting a dropshipping business.

We'd love to hear from you