The Realistic Dropshipping Startup Budget For Shopify Store

In this write-up, we’ll share a realistic Dropshipping Startup Budget for starting a dropshipping store. 

These numbers come from successful dropshippers who shared their startup costs with me. 

Notably, the dropshippers didn’t have identical budgets; it’s precisely why I interviewed them.

I needed to understand what new dropshippers could do with a lot of money or just a little.

In this post, you’ll find an itemized list of startup costs and insights into how much you should spend to reach your eCommerce goals. Are you ready to crunch the budgeting numbers? 

Let’s roll and learn more about the Dropshipping Startup Budget one needs to start and run a successful dropshipping business.

The question is, “How much does it cost to start a dropshipping business?”  

Let’s make it clear that there’s no correct answer. Dropshippers have different goals, and as such, those goals require different budgets.

If you intend to quit your job and live off drop shipping, get this: prepare to budget big. 

But if you want to make just 100 additional bucks a month, your budget can be much more modest, and different entrepreneurs have many ways and plans to achieve this.

Today, we’ll focus on the more modest budget. Put another way, we’ll discuss the bare minimum budget for getting started with drop shipping. 

Here at Dropshippingit.com, we urge you to use this budget if you don’t want to break the bank while increasing sales.

So, what makes up a bare-minimum dropshipping budget? Well, hang in there. We’re about to lift the lid on cost items blow by blow, as follows.

Shopify Store

The Shopify store is the first cost item. Shopify is an online platform; it’s the most popular e-commerce platform around.

On this platform, you can create a website for your eCommerce store and accept payments from customers worldwide.

This eCommerce platform offers a 3-day free trial window to start using Shopify.

However, you’ll not make a fortune Dropshipping within the two weeks. I mean, that must sit pretty with you first, right?

That said, once your two-week trial ends, the actual cost will include the Shopify monthly charge of $29.99.

I know you’re saying, “But that’s cost cover for the store, what about the drop shipping part of the equation?” Well, in comes our second cost item, the Oberlo dropshipping app.

Oberlo

Oberlo, as a platform, helps you find great products to sell online, then import them to your Shopify store, and set your prices. 

When a customer purchases from you, the supplier ships the products directly to your customer without you handling inventory or shipping.

Oberlo makes dropshipping a low-risk business model for new entrepreneurs, since you’ll never have to carry inventory.

The good news, and this is ideal for first-time drop shippers, is that Oberlo is a free plan forever.

Oberlo provides you with access to all its features and excellent customer service. 

You’ll only pay for Oberlo once you go past the monthly 50 sales mark; up until then, you won’t pay a dime.

With Oberlo free, our bare-bones dropshipping business budget stays at $29.99 a month so far. 

I hope that you learn what you need to get your Dropshipping Startup Budget in order before you start your dropshipping business.

Domain Name

The domain name comes right on the heels of Oberlo as our third item cost.

Trustworthy eCommerce businesses all have one thing in common; they’ve their own domain names. 

You need to look the part; you must earn customers’ trust because it’s only in this way that you can make sales.

Although Shopify offers a free myshopify domain name when launching, to strengthen your brand & legitimize your business in the eyes of customers, you should get your own domain name. 

Through Shopify, you can buy a custom domain at only $14 annually, let’s add that to our budget, what do we’ve?

You can also connect an existing domain name to Shopify if you don’t want to incur the $14 fee on Shopify.

You can use cheaper domain name providers like Namecheap, which charges $9-$10 per year.

Courtesy of Shopify, we’ve got an online store in place. Oberlo makes it easy to find and sell products, and now we also have a professional domain name, so our budget is about 50 bucks, not bad for a slick store.

So, what do we spend our money on? 

Successful 7-figure dropshippers assert that it’s unnecessary to spend your money on custom photos, logos, and website design. And that assertion is correct.

It’s pointless to spend money on custom photos, logos, and website design when Shopify can handle all of that. Through Burst, you can find and use impressive stock pictures for free.

Whereas Hatchful allows you to create a custom logo in minutes, you can check out both Burst and Hatchful.

Still reading Dropshipping Startup Budget? Well, let’s debunk it further.

Sample products

Once you’ve got a domain name, the cost of sample products forms the following item of expense. In your budget, this item’s price is exceptionally high.

Dropshipping is phenomenal, and it’s precisely because you don’t have to carry any inventory of the merchandise.

You don’t control the quality of the items you sell, nor the packaging, nor the shipment times.

You must order sample products for two reasons: one, you’ll experience the customer journey first-hand; and two, you get to inspect suppliers.

If you can draw satisfaction from the packaging, shipment times, and the product quality, your customers will probably experience the same. 

If not, you can leverage Oberlo to contact the supplier to address your concerns. Better still, find other products or other suppliers to sell.

The cost of your products will determine how much you set aside for order sample products.

Suppose each of your products costs about $20, and you order samples for five products; we’re looking at precisely $100.

At this juncture, let’s get back to our tally to set up a dropshipping business that now looks like this:

•  Shopify online store $29.99 a month, 
• Oberlo forever free plan, 
• A premium domain name is $14 a year, and sample products are $100, and you’ve got a cumulative total of $143.99.

So, now our startup bill looks slightly shy of one hundred and fifty dollars. 

What would you expect drop shippers to spend their money on next?

The next point will answer this question. 

Shopify Apps

The following cost item on our budget is apps. Look at apps as you’d bells, whistles, and turbo boosters for your store.

The apps can help you run your store more efficiently and drive sales.

The good news is that the Shopify app store has lots of apps, and all it takes is a click to install any of the options.

With some apps offering free access and others charging a premium monthly fee, we’ve outlined a couple of the more popular apps for dropshippers to consider below.

The apps are as follows:

• Cross-selling and Upselling: we’d recommend:

Cross-sell ($19.99/month)

Cart convert ($19/month)

Boost Sales ($30/month).

Bulk pricing: consider installing 

Bulk Discounts & Sales Scheduled ($18.95/month),

 Quantity Breaks ($16.99/month) 

Discount Pricing ($19.99-$89.99/month).

Exit Intent: for Exit Intent apps, we’d recommend that you consider installing:

 Exit Intent & Messenger Popups $29/month, 

Spin-a-Sale ($9.99/month) 

 Wheelio ($14.92/month).

Much as neither of these apps is a must-have, it’s worthwhile having them. 

The amount you spend on apps compared to sample product expenditure depends on your store and objectives.

But for the sake of our budget here, let’s set aside $19 to spend on various apps. Now our budget looks like:

•  Shopify online store $29.99 a month, 
• Oberlo forever free plan, domain name 14 bucks a year,
• sample products 100 dollars and apps $19, and you’ve got a cumulative total of $162.99.  

Marketing

Marketing is such a biggie, as it accounts for the bulk of our budget; it’s here you’ll make a substantial investment in your dropshipping business.

And Matisse, founder of artsy wall marketing, echoes the same.

And so Matisse holds that you ought to commit the lion’s share of your startup budget into marketing. 

Though there isn’t a specific price tag for marketing, we’ll have to hypothesize to get a clearer picture of how much you’ll need to spend on eCommerce. 

We’ll use an average global conversion rate of 2%-4% for our computations; let’s use 2%.

This conversion rate means, for instance, that if you drive 400 people to your store, expect eight of them to make purchases (400*2%=8). 

But how do you draw 400 people to your store? Marketing. 

Facebook makes for one of the most compelling marketing channels for dropshippers. That being the case, it’s worth looking at the cost of driving 400 visitors to your store from Facebook. 

On average, Facebook ads have a click-through rate of 0.9 percent. 

For our math calculation, let’s round that to 1% (1%). In other words, to drive 400 people to your store, you’ll need your ad to reach 40,000 eyeballs. 

AdStage, a marketing software provider, reports the average cost per thousand impressions at 12.45 percent (12.45%). Again, to make the math easier, let’s round it off to 12.50 percent (12.50%).

With this equation, we can work to reach 40,000 people on Facebook in the US, alongside the price.

The equation involves first dividing the total impressions we target, 40,000 eyeballs, by 1000 (40000/1000), since the cost per thousand impressions is the industry norm.

Therefore, that leaves us with 40. 

We then multiply 12.50%, the average cost per impression, by 40, yielding a total price of $500 for Facebook advertising.

(40 x 12.50%)= $500 Ad Spend = 8 Sales.

A recap: to make 8 sales, we’ll need to reach 40,000 people and drive 400 to our store.

Now, let’s add this figure to our working tally: 

• Shopify online store $29.99 a month,
•  Oberlo forever free plan, 
• A premium domain name 14 bucks a year, 
• Sample products 100 bucks and apps $19, 
• Marketing 500 dollars, and a cumulative startup total cost for a dropshipping business of $662.99.  

And you’ll be right to ask why incur $500 to make eight sales? 

You can’t break even this way. 

However, in reality, most dropshippers who rake in six figures do not also expect to make eight sales the first time they invest in marketing.

Instead, they look to study their customers’ interests, analyze the data, and determine which products to market, which audiences to target, and which ads to employ.

These kinds of stats offer insights that help marketing costs go down while conversions go up over time. 

To start dropshipping, you must become a lifelong learner. You must also ask yourself whether you are ready, able & willing to invest these startup costs.

And also, are you enthusiastic about investing your time in learning the ropes of dropshipping?

If so, the mega opportunity that comes with dropshipping can virtually change your life’s fortunes.

We have introduced lots of figures in this article, but we’re glad we can put them in context and perspective.

Dropshipping Startup Budget Summary

• Shopify Online store: $22.99/month
• Oberlo free plan: $0
• Domain name: $14/year
• Sample products: $100
• Apps: $19
• Marketing: $500

Total $662.99

Please share your thoughts in the comments on this Dropshipping Startup Budget. Is it realistic?

Too expensive? Or too low? Feel free to also share your startup budget with us. 

We’ll get back to you. Just before you bounce, we have a small request: If you find the article valuable, kindly like it and hit the share button. From here until next time, learn often, market better, and sell more.

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