How much money you can expect to spend if you start a drop shipping store. We heard from multiple successful drop shippers who shared their budgets here to help give you an idea of what’s possible. Every startup won’t be the same, but that’s why we researched heavily for this video.
We explore a list of options on what new sellers can do with a lot or just a little bit of money. It’s more difficult to start out on your own without enough cash, but there are also some great considerations to know beforehand. In the end, you’ll have an itemised list of startup costs and insights into how much you should spend to
Ready? Let’s start budgeting.
Subscribe to our YouTube channel and watch several videos on how to create a strong ecommerce business. If you’re a beginner, this is a great place for you to start. We now return to the original question:
It’s true that there is no right answer, and everyone’s needs, and goals vary. That said, people with different aspirations might need to budget based on those aspirations. If you want to be able to quit your job or make more than £100 a month on average, you’ll need a larger budget.
Today we’ll chat about the moderate budget that is. We’ll discuss the bare minimum starting budget for drop shipping ( https://www.artisanfurniture.net/dropshipping/ ). We recommend this budget if you want to give it a shot without being in debt, but you also don’t want to start with an overwhelming debt of your shoulders. So what’s in a typical?
When you’re ready to start your own e-commerce store, Shopify is the most popular platform around. With it, you’ll have all the tools you need, including design templates that are optimized for all types of mobile devices. You can even take orders directly on your website!
That monthly cost of $29.99 will cover the costs of your store that comes with a two-week free trial. So, if you’re looking to build that drop shipping fortune, then you’ll have to do some other legwork once the trial ends.
How about the drop shipping part of the equation? Artisan Furniture is a company that provides a platform to find and import products for sale on your store. When someone buys the products, Artisan will ship them to you. You never have to worry about carrying inventory, making this a low-risk business model for new entrepreneurs.
So Artisan Furniture is free, It is possible to set up a drop shipping business with $29.99 per month for now, but you might want to consider earnings your customers’ trust in order to sell more items. Building trust is crucial, and one technique that could help is by appearing like other trustworthy online businesses.
Shopify provides free My Shopify domain names, but to save time and boost your business legitimacy it’s worth getting your own domain name. You can purchase a custom domain through Shopify for £12 per year. You’ll find detailed instructions on how to buy one in the link below. We have a slick online store.
Thanks to Shopify, we have the means to find and sell products for free with Artisan furniture, which gives us a professional domain name too. This means our cost is now close to £50 instead of thousands. Once we pay this off, what should we focus on next? It’s not worth spending more money on anything else right now.
Shopify provides great, free templates. If you don’t want to spend any money on custom photos, logos or website design, then you can simply use the free photo site pixabay and easily create a decent looking website.
The cost of products is one of the things you need to figure in when starting a store online. Drop shipping is affordable, but it means that you don’t control what you’re selling. Your supplier does instead. Ordering other sample products is important because it gives you the chance to investigate suppliers and go on the customer journey yourself.
One of the most common misconceptions among Drop shippers is that they are responsible for spending their money on apps. Apps are not the next line item on your budget – they’re to supplement your ads and website traffic.
Apps can help you increase your sales, provide efficiency to your workflow, and give you the edge in competition in the online retail industry. Shopify has an extensive app store that offers free apps or ones that charge.
For cross-selling and up-selling we recommend installing Cross sell Cart Convert and Boost Sales. For bulk pricing we recommend installing Discount Pricing, Quantity Breaks and Bulk Discounts and Sales Scheduled. For Exit Intent apps, we recommend Wheelie SpNone of these apps are must haves, but they are nice to have like product samples.
The amount of money you spend will depend on your store and your goals. For the sake of this budget, we’ll put aside £20 to spend on various apps. Now our budget looks like this: Shopify Online Store $29.99 a month, free artisan furniture £0, free inventory £0 Domain Name £12 a year and Apps £20 for a total of ~ £65. Our next expense is where you can splash the cash and make a more substantial investment in your drop shipping business.
Marketing is one of the most important aspects of a startup today. It’s been said that it should account for at least 60% of the budget. How you allocate your budget to marketing depends on strategy, but there are some assumptions we can make to help decide how much is needed. The average global conversion rate is somewhere between two and 3%.
For the sake of our calculation, let’s say that conversion rate is 2.5%. This means if you get 200 people in your store, five of them are expected to buy something. And how do you get 200 people in your store? Marketing is one of the most important aspects So let’s look at the cost of driving 200 visitors to your store from Facebook.
On average, the click through rate for Facebook ads is 1%. This means you’ll need to get to 200 impressions before 2 visit your store.
The average cost to have an advert seen by 1,000 people on Facebook is £12.
The result? We arrive at a total cost of £240 for Facebook advertising. If we want to reach 20,000 people, drive 200 people to our store and make five sales let’s add that figure to our ongoing tally Shopify budget of £65.
If you spent £240 to make 5 sales, you would not recoup the cost. But most six-figure drop shippers won’t expect to make five sales in the first place. The primary outcome they want from their marketing is to learn what their customers’ preferences are. They expect to analyse the data to decide which products to promote, which audiences to promote them to and which ads to use.
With so many accessible free resources, marketing costs have gone down, and conversions have increased. If you’re interested in the idea of drop shipping your business, ask yourself if you’re willing to constantly research. If you’re able to invest these startup costs and are willing to invest time, you could save a lot of money on your product inventory. Okay, I’ve introduced a lot of figures in this video and I’m happy to put them in context so leave a comment and let me know what you think of this budget. Is it realistic too low, too expensive?
I’ve been talking to you about startups, and I hope you found this video useful. If it is, give the like and hit the subscribe button. Keep learning and marketing better!