The cost of launching a dropshipping store may attract people. It is said that you don’t own the products so you don’t have to manage them, to ship them to your warehouse, to buy them in the first place! While that is true, you will still require some dollars to launch your store. Let’s break down the things that will require money to start!
Hosting: You need to pay the hosting of your online store either being Shopify (14 days free trial) at $29/month or WooCommerce/Other at $20 – $50/year depending on the hosting you find.
Apps: After you bought your host for the website, the costs increases when you need apps. An app can be to import products to your store, to add reviews, to add countdowns and overall to add extra-functionality to make your store more professional. While there are free apps, they push really hard to use the paid version to kinda get what you really want and need. A single app may average $9/month in cost.
Theme: You are pretty much Ok with free themes but if you are looking to have a different and even more professional looking store, you may buy a theme! This may cost you from $24 to $150 for a decent one.
Now, you have your store opened! You imported your products and only used free apps/themes! You made yourself the logo and configuration of everything because you studied the subject! The cost up til here is $39 on average. That is because you might need a domain name for Shopify (paid once a year).
Let’s take a look at what will cost you the most. The real spender! That is.. advertising! Until you find a winning product (that gives you profit after all expenses)!
When you opened you store, you will not have consistent traffic until you advertise your products. You need to find a product that will make you profit! How do you know if a product makes you profit? Well you measure that per the amount of money you spend on an ad, the price of the product itself and if you include the shipping in the product cost or if the supplier offers free shipping!
Let’s break it down with an example of a profitable product (please note the widget spinner may not be a profitable niche anymore):
1 Fidget Spinner that you sell for $9.99 and free shipping. The product you buy it from AliExpress in China for $1.99 also free shipped. So you will think your profit is $8. Well not that fast. On that $9.99 you will need to pay 3.4% PayPal commission + $0.35 fixed commission meaning $0.69. So $9.99 (selling price) – $1.99 (product cost) – $0.69 (PayPal commission.. there might be other alike commissions from apps or the Hosting).. that means we get $7.31 left. That means we need to spend less that $7.31 on adds to make profit.
So if you bought an Instagram Shoutout for $30 on a Page with 450k followers and you get 10 sales, that means 10 x $7.31 = $73.1 – $30 = $43.1 profit.
But to find a product that sells is not easy. Unless you get lucky + do your due diligence and studied the subject and niche that you’re gonna promote, you will not get that many sales, even if you spend money on advertising. Prepare to have at least $300 advertising budget when starting out.