How much money do you need to start dropshipping in 2023? My Honest Opinion
How much money do you need to start dropshipping?
One of the reasons why dropshipping is so attractive is because of the low startup costs.
However, there is a common misconception that dropshipping is free. This is most definitely not the case. You may see click bait headlines online saying “start your dropshipping journey for free.”
You will have to learn how to block out all the noise and click bait headlines.
As of any business you need money to play around with. At the end of the day, you will always need money to make money. So what is the startup cost for dropshipping?
The costs of starting a dropshipping store or business.
The misconception that dropshipping is free also comes from the fact that you don’t have to purchase the products you are selling beforehand. You make a sale and you use the money from the sale to order the product which then gets sent to the consumer.
No one seems to mention the startup cost for dropshipping needed to get the website, domain, marketing costs etc.
COST BREAK DOWN:
| Shopify cost | $29 |
| Domain Cost | $20 |
| Marketing Costs | $520 |
| Additional cost | $15 |
| Total cost for 1 store | $584 |
| Additional cost (Failure) x3 | $1752 |
| Additional cost (future issues) | $1000 |
| Total cost | $2752 |
SHOPIFY COST:
If you are a new to all of this, your website is not free. You will most likely and are suggested to use Shopify to build your website.
There is a 14-day free trial where you can build your website and play around with website designs.
However, you will need to need to purchase their basic plan to make your website available to the public.
Shopify’s basic plan will cost you 29 dollars a month.
DOMAIN COST:
It is possible to keep your Shopify domain name for free however it doesn’t look very professional and most dropshippers choose to buy one.
In order to have a .com domain name you will need to spend some money too. The cost of your website domain will vary depending on the availability of the specific name.
The best website to purchase domain names by far is Namescheap. As I said the prices will vary but if you find a name that has not been taken you can purchase your domain for about 20 dollars for the year.
Marketing costs:
By far your biggest expense will be the initial stages of your marketing campaigns. Regardless of which platform you will be using to run campaigns you will need money to test certain ads with certain target groups.
In order to test whether your first dropshipping store will work or not you will need about 500 dollars. And this is on the conservative side of things.
If you are not an expert in creating captivating media for ads you will need to hire someone on fiver to make your creatives for you. Hiring someone on Fiverr. is a great idea as they make professional videos that are ready to use.
This will cost you about 10 dollars per video. You will need two videos to run test so this will cost you about 20 dollars in total.
Additional costs:
Something that really isn’t spoken about at all is the additional costs you will occur when starting your dropshipping journey.
For, example it’s hard to build a following on Facebook in such a short amount of time and with limited content. In order to gain trust with customers you will want to buy some followers to make your store seem liked and legit. This will cost you about 15 dollars.
Moreover, you will need to use payment gateways. It is possible that these payment gate ways can hold the money you have earned which can leave you in a nasty situation if you don’t have backup money. I suggest you have 1000 dollars lying around in case your sale money gets held and you need to continue placing orders for new customers.
Additionally, Failure on your first few stores is almost guaranteed. I learnt this the hard way. If you want to learn more about dropshipping and the risks you can read my blog here.
A smart business person is always prepared for the worst and for any mishaps that may occur. You should give yourself a minimum of 3 failure stores. This means you need to take your total cost of one store and multiply it by three.
Moreover, you will need to use payment gateways. It is possible that these payment gate ways can hold the money you have earned which can leave you in a nasty situation if you don’t have backup money. I suggest you have 1000 dollars lying around in case your sale money gets held and you need to continue placing orders for new customers.
Finishing words:
In closing I hope this has answered your question about the costs of starting a dropshipping store. Please note that these numbers come from my personal experience. It is possible to start getting sales earlier on in your journey and you might not need as much as I have mentioned. If you do not have more than 2000 dollars I suggest you save for a few months longer to be sure you are ready and set for this new section of your life.
