Friday, July 26, 2019

What is the Cost of Launching a Dropshipping Store?

On to another hot topic about dropshipping.  Most of us would be interested in knowing how much we need to launch a dropshipping store.  Let me just set expectations that it would not be identical for every dropshipper. You might have different goals, budget, and capacity.  Let’s get started, okay?

So, what is the cost of launching a dropshipping store?  The estimated cost of starting up a dropshipping store is less than $500.  This rough estimate is just a bare minimum to get all you need to completely set up the store.  Remember that this is not fixed for everyone. As we go on the article, we will discuss what you need and how much to complete the setup. 

Setting Up Your Dropshipping Website
The first thing that you have to do if you have already decided to start with this business is your store.  And for drop shipping, we are not talking about a physical store where people walk in to buy products. Remember that an advantage of putting up a dropshipping store is doing most of the transactions online.  This makes it convenient for most since we are talking about flexibility.  

To successfully start your dropshipping store, the first thing where you will spend your money is creating your website.  Another advantage of dropshipping is that you can use platforms to help you set up your store. In this step, we will use Shopify as an example.  Shopify is the most common platform used for dropshipping. 

It allows you to take payments from the customers and post items on sale. Shopify offers a 14-day free trial to help you set up your store.  However, realistically, we will not earn in 14 days. 
So, basically, we need to subscribe to complete the setup.  The basic plan costs $29.99 per month.
Making Your Store Credible - Create an Online Domain
Customers will be using your website very often.  To make your store look credible, then you have to create a domain.  You want to customize your store and look professional to your customers.  Creating a domain name for your dropshipping store because you want to build a brand which is very important in dropshipping.  

There is a strong competition and many dropshipping companies will also find strategies to promote their store.  Aside from this, creating a domain name also helps your business to be easily remembered. Now talking about the cost.  The pricing for a domain at Shopify is $14/ year.  
Make a Logo For The Business
Apart from using a domain name for the dropshipping store, now we move on to the next.  You need a logo for it to look nice. Just like using a domain name for the business, it also makes a website credit to the customers.  Business owners use a logo to attract more customers based on their creativity in creating one.

Some business owners would use a logo to tell a story about their business.  How it was founded and what makes them significant among others. The logo will also boost the confidence of the customers to your store.   

Fortunately, there are free websites that can help you make a logo for your dropshipping store.  But remember that you can get better designs with those of the paid applications.

Use Dropshipping Platforms to Search for Suppliers
An advantage of being in a dropshipping, allows you to have options on which platforms to use to help you become successful.  An example of a platform that you can use is Multi-Drop. It helps you find great products to sell online and import them to your store and set your prices.  

Multi-Drop includes product research, analytics and offers customer support to its clients to ensure your business’ success.  They offer various plans to choose from whichever fits your dropshipping needs. However, to be realistic with better profit gain, you can sign up to $29/ month.

Cost for Marketing
We have mentioned in our previous post on How To Advertise Your Dropshipping Store why marketing is very important in dropshipping.  As a matter of fact, most of the costs will be spent on marketing campaigns and advertisements to promote a successful dropshipping store.  And so many dropshippers, having their creative minds also find ways How To Get Free Traffic To Your Dropshipping Store

This post lists of ways you can maximize the marketing strategies while keeping the cost to a minimum.   It is important to take advantage of ways to market the products for free. However, you have to keep in mind that it is not so efficient and effective compared to paid marketing. 

Just to give you an idea of the cost.  According to studies, if you want to get 5 sales, then you need to reach to 200 customers to pay attention to your dropshipping website.  And to reach 200 customers, you need to boost your marketing ads to reach 20,000 potential customers.  

Facebook Ads and Google Ads are just examples of paid marketing advertisements you can use for the business.  On the above example, you need to spend a rough estimate of $250/ month to make it work. 
Optional Expenses for a Start-Up Dropshipping Store

Purchase Sample Products
If you are looking to check product quality, the turnaround time of handling and shipping by a supplier, you can purchase sample products that way you can also check the legitimacy of the supplier.  

Let’s say on this, you need to spend $15 per item.  This covers the overall cost of the product including the shipping.  To be realistic, you want to buy 5 different products. The total estimate cost to purchase sample products would be $75.

Dropshipping Apps
Getting an app for your dropshipping store is an optional expense you want to consider when setting up.  Just like what we have discussed a while ago, setting up a dropshipping store depends on your goals and needs as a businessman.  This feature can be used and added at a later time if you wish to. 

There are applications developed to improve the quality of selling in dropshipping.  Some of them are designed to do cross-selling, upsell and even boost sales. These apps as available for $19/ month.

A helpful tip: Do I Need A Credit Card for Dropshipping? You can use a credit card to pay for the subscription fees.  Using a credit card to pay for the upfront fees does not make you save money but will give you more time to adjust from the expenses and start earning money from your dropshipping store. 

Let us do a breakdown of the expenses mentioned above.  Remember that this is a price estimate and is only covering the bare minimum to set up a complete and functioning dropshipping business.  

Dropshipping Website $29.99/ month
Online Domain $14.00/year
Multi-Drop $29.00/month
Budget for Marketing $250/ month
Total $322.99

Optional Expenses
Sample Products $75.00
Dropshipping Apps $19.00/month
Total + Optional Expenses $416.99

Keep in mind, how much you want to spend will always depend on your business goals. The illustration above is for launching a dropshipping business at a bare minimum.

No comments:

Post a Comment