At the very least, you need $29 per month to start a dropshipping business. However, it does not give you leverage. All the things you will do for the rest of your journey are hard work.
With due respect to technicalities, you can dropship for $0. All it takes is a free website builder and a lot of grit.
This article will break down what it takes to start a legitimate and effective dropshipping business, not a monkey business, for people who believe they can earn a living without spending anything.
1. eCommerce Platform Store: $29
The first thing you need to start dropshipping is a store. In this regard, Shopify reigns supreme and nothing else. Although there are alternatives out there, Shopify is still the best choice.
If you want, you can read my comparison of Shopify against Volusion, and you will see why I say that Shopify is the best.
The cost of the basic plan for Shopify is $29 per month. At this rate, you should build a fully functional dropshipping store.
Here are the things you will get for your $29:
- Fully functional eCommerce store
- Payment methods so you can charge your customers
- Free and customizable themes for your online store
- Unlimited products to upload and sell
- 24/7 support
- Access to multiple sales channels
- Reports and analytics
- Free apps
- Shipping discount
With Shopify, it is your choice if you want to use their default credit card payment system or if you want to use another one. There are hundreds of options on how you want to charge your customers, and the most popular is PayPal.
The store is ready for use. It means you no longer need to do any coding or programming. The way it works is simple: you only have to upload your product’s images, texts, and pricing.
You can also create collections and then lump all products of the same type in these collections you made. If you do this on other platforms, you will have to re-write the website code yourself.
Shopify also gives you access to apps. No platform can provide you the exact thing you want. In this case, Shopify has an app store where you can buy apps to make your store look more professional.
Shopify is also the go-to platform for dropshippers and dropshipping software creators. What does this mean? With Shopify, you do not need to upload manually.
All you need to do is integrate a dropshipping app, and the products you choose from that app will automatically transfer to your store.
Shopify is free for 14 days only. But then, 14 days is not enough for you to build a dropshipping business. At this time, the only thing you can do, really, is testing the platform and see if you like it.
Shopify also has other plans that cost $79 and $299 per month. These are not the plans you want for now, as they are better used for dropshipping stores already earning money.
2. Dropshipping Platform: $0 or $49
A dropshipping platform is an app where you can find suppliers. You click a button to transfer the products to your store from this app.
It is also where you fulfill orders so the supplier can send the item to your customers. There are two platforms that I recommend: Oberlo and Spocket.
Oberlo is a free app where you can find suppliers. Most of these suppliers are from China, but they have others located in other parts of the world like North America and Europe. Many products are on the platform, and dropshippers using Oberlo have sold millions of products.
Here are some of Oberlo’s features:
- Product data – the system shows you the products that have high-potential, how many have been sold, and how they are rated. From this report, you can choose which products have a high potential for success.
- 24/7 support – you can contact them via email and chat any time of the day.
- Product count – there are millions of products to choose from, and this should allow you to nail down your niche.
- Languages – the platform is available in six languages.
- Customization – you can customize the product description and content before you even move them to your store.
Oberlo also offers several free tools that you can use. Examples are profit calculator, slogan generator, business name generator, and traffic calculator. At best, you can also buy a ready-made store from Oberlo.
Spocket is a similar app, and it also has a free version. However, the free version only allows you to browse products without uploading them to your store. A review of Spocket from many customers will tell you that it is a dependable platform.
The best plan for starters is the Pro, which costs $49 per month. You can pick and sell 250 unique products from their product list at this rate.
Spocket integrates with many platforms like Shopify, Wix, WooCommerce, etc. Oberlo, on the other hand, only works with Shopify.
Both of these platforms work in the same way. You integrate them with your online store; then you pick products from them. With a few clicks, the products move to your store.
If a person buys from your store, the dropshipping app inside your dashboard is where you place the order. Then, the supplier will ship the item to your customer.
The shipping cost is separate. Each supplier has its own shipping rate, so you need to watch out for this since you must pass this charge to your buyers.
3. Domain Name: $30
The default domain name for your store carries the provider’s domain. For example, if you call your store John’s Knick Knacks and your store is built on Shopify, your store’s URL will be https://johnsknickknacks.shopify.com.
As you can see, shoppers may not like this. It looks unprofessional, and you cannot build your brand this way. Sure, it can work. However, you will have big problems later on if you change it. The best practice is to change it before you even launch your store.
Domain names cost anywhere from $5 to millions of dollars. Those in the $5 range are not TLDs or top-level domains. Most of them are domains that end in .io, .accountant, .store, etc.
Top-level domains are still your best option. The sad fact is that single-word domains are expensive. If you do not have a big budget, you will have to settle for long names.
Where to buy domain names
Shopify and other platforms offer a domain registration service. It is free, but the domain is paid. There is one thing I do not like here. It will be a nightmare to transfer that domain name if you decide to shut down your store later from the platform and move it to a new one.
What I recommend is a domain name from a registrar. Do not buy from Shopify, Wix, BigCommerce, or any dropshipping platform.
You can buy domain names from GoDaddy, Name Cheap, Domain.com, Google Domains, Hover, DreamHost, Bluehost, and so much more.
I cannot tell you how much the domain will cost. You can visit each site and then compare the prices for the same domain.
Tips for buying a domain name
Here are some tips I have for you when buying domains:
- Buy more than one year – domains can jump up in price after your first year, so buy the domain for at least two years
- Privacy protection – when you buy domain names, your name and address as the owner is exposed to the public. To hide this information, you have to buy privacy domain protection. All domain registrars have this service.
- Go for the .com – as an eCommerce operator, the best domain ends with .COM. It is the most trustworthy domain name for all eCommerce websites.
Lastly, choose a brandable name. As a dropshipper, do not use your name—think of something creative that is easy to remember.
4. Sample Products: $100
The next expense in dropshipping is the sample. One mistake that many beginners make is they do not buy samples of what they sell.
If you want to succeed, you need to buy samples of the products to know the quality of the item you are selling. It is also necessary to know how long the seller responds to inquiries and how long it takes them to ship the item.
But how much does it cost? Unfortunately, there is no single answer to this. It all depends on the products you want to sell.
Let us say that you are in the cooking niche. Below is a list I made for five items:
- Tong – $1.58
- Chicken bone scissors – $3.21
- Plastic chopping board – $1.39
- Vegetable Cutter – $1.07
- Digital Ceramic Knife – $1.24
The total here is $8.49. But there is a problem. These are only five products. You want to buy at least ten. In our list, these products are cheap; what if your products cost about $10 each?
A reasonable budget for this is $100. You do not have to buy all the products you want to sell. If you plan to sell 100 products, you will run out of money buying and testing all of them.
My recommendation is this: buy two products from the same seller. If you are happy with the quality, you no longer have to buy and test this supplier’s other products. The quality of the product you got indicates the supplier’s standards.
Make a note of what you buy, including the supplier’s name and where you found them. I am saying this because you can install Oberlo and Spocket in the same store. Also, list down how long it took for your product to arrive.
Use these details to decide whether or not the supplier of your choice is trustworthy. Do not be fooled by the reviews of these suppliers on the dropshipping platform.
5. Apps for Integration: $50
Regardless of the dropshipping platform you choose, you will only get a standard and functional store. It does not have all the bells and whistles.
If you want to drive sales, email your customers, or make your store look more professional, you need to integrate apps. Like the product samples, there is no simple answer here, so I will peg the cost to $50.
You can get maybe four to five apps for your store at this budget. Take note that this expense is monthly. Almost all software creators now charge every month—it is easier to make money this way than selling their software at a fixed one-time price.
So, what apps do you need? Below are some of what I recommend:
- Cross Selling – it is an app that automatically upsells or cross-sells a product to your customer. You decide which products show according to the customer’s options.
- Bulk Pricing – with this app, you can program combined products and sell them at a lower price. It makes a site visitor buy since he thinks he is saving money. Without this app, you will create bulk pricing manually.
- Exit Intent – an exit-intent app can come in many forms, such as a pop-up offering a discount if your site visitor is about to leave.
- Also Bought Apps – these are apps that show what other people bought from your store. It is similar to what you see on Amazon at the bottom of the product screen, where it says “customers also bought.” It is an excellent way to introduce related products to what your customers have already added to their shopping cart.
Do not go on an app-buying spree, or you will lose money. All these apps are beneficial but do not buy them all.
For now, what I want you to do is focus on the essentials. First, think of your customer’s experience and decide which apps work best to drive sales or make your customers happy.
6. Marketing: $125
No one will go to your store if you do not sound the horn. If you think you can share it on social media, and then people will come flocking to your site, you are gravely mistaken.
You need to spend money on marketing. What this means is you have to spend money on ads. As a dropshipper, the best platform for this is Facebook or Instagram.
The average conversion rate is between 1% and 3%. Conversion means sales. If we use 2% as a conservative assumption, two people will buy for every 100 people to your store. One hundred people getting to your store means they clicked your ads.
The average click-through rate for Facebook ads is 1%. This means that 10,000 people must see your ad. 1% of that will click the ad and then go to your store. So, that is 100 people. Out of the 100 people, only two will buy.
How much do you pay to Facebook to get your ad to 10,000 people? The average cost of impression is $12.45. So, if you want 10,000 people to see your ad, you pay $124.45.
Now, out of this expense, you only sell two products. If your net profit per product is $5, you only make $10.
Do you know what this means? It means you lose money. You spent $124.45 for ads, and then you only earned $10.
As you can see, there is a lot to digest here. It is why many dropship experts do not suggest that you sell cheap products. Instead, you must sell products where your profit for each item is at least $50.
The overall cost of a decent dropshipping store
So, what is the overall cost of starting a dropshipping store? Below is a summary.
- eCommerce Platform Store – $29
- Dropshipping Platform – $49
- Domain Name – $30
- Sample Products – $100
- Apps for Integration – $50
- Marketing – $125
The total cost is $383. And you are only getting started. You have to keep spending money per month. Of course, you can forego some of these expenses and start with bare bones.
Here is a breakdown of a barebone dropshipping store where you do all the work:
- eCommerce Platform Store – $29
- Dropshipping Platform – $0
- Domain Name – $0
- Sample Products – $0
- Apps for Integration – $0
- Marketing – $0
In this case, the total is only $29. You will do a lot of work and write blog posts to get organic traffic. On the other hand, you can spend money on blogs to get organic traffic and forego advertising.
Of course, you need an affordable freelance writer who can write and manage your content plan. Just like the Shopify monthly fee, you should publish blog posts regularly and then share that on your free social media accounts.
How can I succeed in dropshipping?
Sending money is not a guarantee to success. You must do other things to convince people to buy what you are selling. Below are some tips for dropshipping success:
1. Search Engine Optimization
SEO goes beyond using keywords. You must learn both on-page and off-page SEO. As a dropshipper, you are alone in this, and you should do this yourself. Hiring an SEO expert can be costly. Besides, SEO is a never-ending process.
There are many SEO resources you can use for free. Here are some examples:
- Moz
- SEOBook
- Search Engine Land
You can also follow the YouTube channel of Brian Dean if you want. Many free search engine eBooks and tutorials, even in my blog.
2. Add Value to the Reader
Advertising is not enough to cut it. What I recommend is you add value to the target consumer’s life. The best way to do this is to blog.
For example, let us say that your niche is baking supplies or tools. In this case, the right thing to do is write recipes and tips about baking. You can hire a writer to do this or learn how to write yourself. It is better to take the second option, so you do not have to pay a writer for every article.
The blog posts you publish must have links to your products. It also makes sense to add images of these products somewhere in the blog post, not as a product but just an image.
3. Get Niche Deep
One problem I often see with dropshippers is they try to sell everything. Do not do this. You are not Amazon. Find a niche that you are passionate about, and then focus on that. This niche must not be generic or broad—it has to be specific.
Broad niches cover a lot of areas. For example, it is not good to dropship for pet products. A pet store is broad. The excellent idea is to build a store for cats only, dogs only, or snake pets only. A snake pet niche is narrow, and it is good.
Niching down is what makes you a specialist. People will immediately know that you are the go-to person for that niche.
For the pet snake example, pet owners are more likely to show you loyalty than if you sell all sorts of pet products. Some customers may even ask you if you have this or that product.
In that case, you can take this opportunity to expand your product list, and there are already customers waiting for you.
Summary: How Much Money Do You Need to Start Dropshipping?
In dropshipping, the real deal costs money. For $383, you get a basic dropshipping store. If you want something better where you can test many products and reach tens of thousands of people, prepare at least $1,000.
Sure, you can start dropshipping with $0. But then, that is just monkey business. Anybody who starts a company with $0 will not take it seriously. It is likely to result in failure. Spend money, so you are motivated to make it work!
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