Dropshipping Startup Cost: How Much Do You Need To Succeed?

dropshipping startup cost
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If you’re just getting started with dropshipping, and you’re not certain how much would be a perfect dropshipping startup cost, you might want to read this article until the end.

There are a lot of strategies that you can get started with today, and be successful. Some would take from you more money, and others that will require a little less.

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In the next few lines, I will share with you the basic costs of starting a dropshipping business, alongside some tips to help you succeed while spending less, so at the end of this article you’ll have a clear idea of how much you need to start dropshipping and actually succeed.

Store Setup Cost:

The first thing you will need to get started is to set up your store. The basic Shopify plan costs $29 USD. However, it’s not the only thing you will need to set up your store. You’ll need to buy a domain name ($8 USD from Namecheap). You’ll also need to use some apps to increase your conversion rate, and make your operations smoother.

The apps I recommend to optimize your sales funnel, improve conversions, and increase your average order value are Shogun (10 days free trial + $39 USD a month) and Checkout X (30 day trial with the link included + €39 a month). You may as well add a review app like Judge.Me, (Has a Free Plan) a currency converter if you’re targeting multiple countries.

Read: 3 Proven Tips To Optimize Your Shopify Sales Funnel.

To make your operations as smooth as possible, and save time, you will need Arigato Automation (14 days free trial + $15 USD a month) and PayPal Tracking Info on Autopilot (Has a Free Plan)

That will leave us with $122 USD a month after the end of the free trial, plus the $8 USD for the domain name. Now, let’s move to other costs…

Marketing Cost:

Just to make something clear: Unlike what SaleSource and Oberlo suggest in one of their articles, there are no guarantees you’ll make a return of investment after you test your first product.

They both suggest that $500 USD would be a perfect dropshipping startup cost, while $500 won’t even be enough to test 2 products. So, don’t buy into the fake dream they try to sell you. Otherwise, that’ll bring you nothing but disappointment.

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How Much Do You Need To Dropship With Facebook Ads?

Using Facebook Ads to drive traffic to your products is the most expensive option. Yet, it’s the most popular one among dropshippers, as gurus are screaming its name quite loud.

Facebook Ads can give you instant results. You can test a product in a couple of days and see if it’s a profitable product to sell, or a waste of time. However, if you don’t do it right, you’re burning cash.

To get started with dropshipping using Facebook Ads, I believe $1,500 USD will be more than enough as a marketing budget if you obsess about the small details. I recommend that you spend more time and money on each promising product, rather than being too excited to just run a campaign on Facebook as soon as possible… That won’t get you results.

For a low ticket item, I would spend $100 USD to see if the product has potential. If I get sales, I would keep the adsets that bring sales. If not, I’d pass as soon as possible.

However, for a high ticket item, I would spend no less than $200 USD to feel the pulse of the product. And it’s just the same as a low ticket item, if I get sales, I’d keep the adsets that get sales and kill those that don’t.

We wrote a step-by-step guide to help you set up ads on Facebook properly. Make sure you check it out.

Read: Facebook Ads for Dropshipping.

How Much Do You Need To Dropship With Google Ads?

Google Ads is a marketing platform that gives your dropshipping startup business a lot of options to try out. For example, if you’re not a big fan of Facebook Ads but focus on video ads, you can never go wrong with Youtube Ads.

You can create a campaign on Youtube in a matter of a few moments. It actually works quite the same as Facebook Ads. You make a video ad for your product, define your budget, objective, ad group, and a few more options, and you submit your ad.

We also have a step-by-step guide that’ll be very useful if you’d like to start with Youtube ads. Check it out.

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Read: Youtube Ads for Dropshipping.

To get started with dropshipping through Youtube Ads, you should start with as low as $1,000 USD as a marketing budget.

There’s also Google Shopping Ads, and it’s by far one of the most cost-effective ways to drive buyer intent targeted traffic to your store, and then it’s up to your sales funnel to do the rest.

What you should do is create a test bucket for all the products you have in your store. The products’ names should include the keyword you want to appear in search results for (it doesn’t matter if these keywords are too broad) and you let the algorithm test.

After a few days, you should check to see which product gets the most sales, and then create a campaign for that particular product targeting more keywords.

Google Shopping is now free to use. However, you may want to put some money into it so you can get the most of it. $750 would be good as a marketing budget if you decide to go with Google Shopping Ads.

How Much Do You Need To Dropship With Instagram Influencers?

Working with influencers is an awesome way to get some traction around your brand. However, choosing the right influencer to work with can sometimes be a hard thing to do.

If you’d like to start dropshipping with the help of influencer marketing as your main marketing channel, I believe you will need $1,000 USD as a marketing budget.

I highly recommend that you work with micro-influencers. Their audiences have more trust in them than the big influencers with hundreds of thousands of followers.

There are also Instagram theme pages which I don’t really recommend. You need someone with a familiar face to tell people about your product. That’s how you can build some trust.

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Most micro-influencers will settle for a free product. Influencers with a bigger audience will ask for the free product and some money upfront. Make sure the product is white-labeled and is packaged in a clean and well-designed package.

You may as well set up an ambassador program that rewards influencers when they refer a customer to your store.

Other Important Dropshipping Costs:

Supply Cost:
When you get sales, you will have to order the product and ship it to your customer. That’s why you should always keep at least $200 aside, so if you run out of money, you can still ship the products.

Video Ads:
For video montage, you will either need to have the product shipped to you and then make a video of it using your phone. Otherwise, you will need to hire someone to either do that for you or compile videos from Youtube that are not copyrighted and make something cool out of them.

The average cost of a video ad is between $25 and $50. But if you want some white-labeled fancy video made by professionals, the lowest you can find is $200. Some even charge $750 for one video…

Copywriting:
When it comes to copywriting, you will need to write a copy that converts. If English is not your native language and you can’t write something impressive that will hook your prospect, you will need to hire a copywriter to write something awesome to help sell your product.

Design:
For web design, you can either use the templates Shogun provides. Just replace the content in there with your own content, and that’s pretty much it. But if you need a special landing page, you’ll need to hire a web designer to do that for you.

Spy Tool:
If you’re not into product research, you may want to use a spy tool. And the best one out there is AdPlexity Ecommerce which costs $199 USD. But you can get it for $149 USD if you sign up through this link and use the coupon “EcommerceProphet25”

Product Pictures:
You need clean HQ pictures of your product. If your supplier can’t provide them, you need to find a way to make them. There are freelancers out there that can help you with that. You’ll need to ship the product and pay up to $50. You may as well do it yourself if you have the required hardware.

White-Labelling:
You may have noticed that I mentioned white-labeling before in this article and the reason I did that that white-labeling is a game-changer if you have a product with huge potential.

It’s the process that’ll make you stand out and crush your competitors. White-labeling will help you increase credibility and trust. And it’s actually the one piece of the puzzle that you can’t scale if you don’t do it properly.

Dropshipping Startup Cost Conclusion:

So, how much money do you need to start a dropshipping business?

If we do the maths we’ll find out that:

  • For Facebook Ads, the dropshipping startup cost will be nothing less than $3,000.
  • For Google Ads, the startup cost will be between $1,500 and $2,500. It depends on whether you go for Google Shopping Ads or Youtube Ads.
  • For Instagram Influencers, $2,500 would be a perfect dropshipping startup cost.

Our blog has everything you need to succeed. From tips to help you get started, to driving traffic, optimizing for conversions, and making your operations as smooth as possible.

You may as well reach out to us if you need help with any of the things mentioned in this article. We work with dropshippers on a regular basis, and we helped a lot of them start and scale their businesses to 6 and 7 figures, and we believe you also can get there with the help of the right team.

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About The Author:
Yassine Ouasbir

Yassine Ouasbir

Hello folks 🙋‍♂️ My name is Yassine. A very ambitious 23 years old entrepreneur from Morocco, and I'm the CEO of Ecommerce Prophet. A company dedicated to making your e-commerce business rock 🤘 I started my own journey in the e-commerce industry in late 2016. I had my own share of failures trying to figure everything out. I only started seeing results after taking the Red Pill 🔴 in 2018. And my life changed FOREVER... What wakes me up in the morning is my willingness to go the extra mile, ensuring my clients' businesses are booming, so my business booms as well. I'm always up to sharing extremely powerful strategies with you, so we can all grow together ☮
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