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ben

@ben

7mo

Startup cost: $100 - $7.5k

Dropshipping

I've heard a lot of influencers say what it costs to start dropshipping, but it's never the full picture.

So I put together a full breakdown that should help beginners actually know what to expect.

The reason I'm doing this is because when I was President of Zendrop, it would be sad to see so many users quit before they started because they had unrealistic expectations and didn't realize what they were getting themselves into.

The reality is that there's many strategies for how you can get started and lots of tools that you can use. I've tried to capture a few (but not all) different philosophies and how they could impact cost.

First, what are the things beginner dropshippers often pay for?

This is slightly different from what you NEED. This is what are things you'll consider paying for at some point in your journey.

Here's a quick list:

  • E-commerce platform (really the only thing you HAVE TO pay for)

  • Domain

  • Theme

  • Supplier

  • Product & ad research

  • Reviews

  • Ads

  • Courses & coaching

Here's a bit more information on what people use

E-commerce platform

  • Almost always Shopify, but Wix is making a big push

  • Shopify has a free trial, then $1 trial, then is $25/mo

  • There's other players like Woo and BigCommerce, but they've become largely irrelevant with mainstream beginners

Domain

  • You can use a Shopify subdomain for free

  • You can buy domains on Shopify or elsewhere for like $10 - $20 / year

Theme

  • You can get free themes on Shopify

  • There’s also a whole library of other themes where can be cheap or run you hundreds of dollars

  • The most widely cited theme in dropshipping communities is Shrine which is $150 for the base and $350 for the pro

Supplier

  • You can use platforms AliExpress or CJ for free

  • If you want US supply (to e.g. sell on TT Shop), you will likely want to pay for a Zendrop or Spoket (not allowed to have their correct name in post for some reason) type

  • If you want to use dropshipping automations and e.g. have ebay as a supplier, you will need something like AutoDS

  • Note: Subscriptions like Zendrop & AutoDS can include other things like education and coaching

Product & ad research

  • Common ways to do this for free are:

    • Train your algorithm on TikTok or Instagram by creating a separate account where you just like a bunch of products then the algorithm feeds you more

    • Search TikTok made me buy it

    • Meta has an ads library where you can search ads other people are running

    • TikTok Creator Center & Seller Center shows you top products and their creatives

  • But for people who want to do deeper research, they often use paid tools like

    • Minea

    • Koladata

    • Fastmoss

    • PiPi Ads

    • Dropship.io

    • SellTheTrend

    • BigSpy

    • And others

These are all great tools in their own ways. To select one, I’d generally find a creator you want to learn from and use whatever tool and plan they use so that it’s easier to follow along.

Reviews

  • You can do this for free by manually creating reviews on Shopify

  • However, it is more common for people to import real reviews from other places like AliExpress and other places with tools like

    • Loox

    • AliReviews

    • Judge.me

    • Stamped.io

    • And others

Loox has the cheapest entry plan at $12 which should do what you need. 

Ads

  • You can grow an audience organically by posting on social media for free

  • The most commonly suggested ad budget for testing a product is $250 - $350

  • Some people suggest testing a new product every week until you find a winner

  • Other people suggest doing lots of research to find a winner then spend on different creatives until you find an angle that works

  • Either way, you should be prepared to spend $250 min and up to $1,500 / mo on ad testing if you want to go the paid media route

Courses & coaching

  • You can get great courses and content for free, but not coaching

    • There’s great free courses provided by many of the tool providers

    • There’s great free courses provided by many influencers who make money from the affiliate commissions they make by you signing up for the tools in the course

    • There’s great free courses on platforms like Udemy

  • Some tools that offer courses and coaching

    • Zendrop - $79 gets you unlimited access to the tool, courses, coaching and community

    • AutoDS - they have free courses and I think they offer mentorship in their $40 plan

    • Minea - they have a coaching program for $999/mo

  • Or you could go with one of the gurus, but they are often high-ticket programs

    • Ecom Mentoring by Ecom King

      • You fill out a form and then they call you to sell you

      • It’s probably going to run you ~$5k / mo for full mentorship

    • Supreme Ecom by AC Hampton

      • He has a course for $597 which is the entry price

      • Also has mentorship that can run you 2k - $4k as an upsell

    • AI Ecom Insiders by Nathan Nazareth

      • I’ve worked with him / dinner with him. Nice guy, but definitely follows the money.

      • He has a free course, but it’s a funnel to this

      • His mentorship can run like $2k - $6k, but includes course, tools, and discord access

There’s a bunch of these guys, the point is that if a guru promotes something, it’s an upsell to something else which is then a gateway to coaching which is in the thousands. Is it worth it? It could be. I’d recommend seeing how far you get with less expensive resources to start and if you still feel stuck and a creator has a method that speaks to you, then try to use them for that.

How much expenses can you rack up in your first 6 months?

In 6 months, you should be making sales to offset this cost, but I do think you should have the money ready and be financially prepared to have at least 6 months of runway before getting started.

On the low end

You can get a Shopify store for $1 for 3 months, then pay $25/mo and do everything organic with free resources which would run you less than $100.

Mid level

Let's say you get a $10 course on Udemy, sign up for Shopify, buy a $14 domain, sign up for Zendrop’s $79 offer for US supply and coaching, get Minea’s $49 plan for product research, Loox basic plan for like $13, Shrine basic theme for $150, and test 2 products a month with $250 budget for each. 

This would cost you about $4k over 6 months.

High cost

Okay baller, lets say you sign up for Nathan’s $6k maxed out coaching program or Minea’s $1k/mo coaching program. This includes a course, so no need to buy that separately. You get wix for $29/mo. You buy a nice domain for $25. You get Spoket for lots of US supply for $99/mo. You upgrade your product research tool to the $99 plan. You get a more expensive reviews tool for some reason for $25. You get the Shrine pro there for $350. And you test 4 products a month at $300 / test.

This would cost you about $15k over 6 months.

So how much money do you actually need if you should start making sales?

Let's run through a couple baseline assumptions for this. 

Obviously everyone’s results are different, but these are some industry standards. 

It typically takes people 1 - 3 months to start making real sales. 

Lets use the following ROAS assumptions:

  • Month 1: 0.00x

  • Month 2: 0.25x

  • Month 3: 0.50x

  • Month 4: 1.00x

  • Month 5: 2.00x

  • Month 6: 3.00x

It takes some time to ramp up, but 3x is considered a good ROAS for dropshipping.

How about margins?

The gold standard is to mark up a product about 3x. So our gross profit would be 2/3 of our sales.

So, how much money do you need in the bank with our medium and high spend scenarios based on these assumptions?

 

Here's a spreadsheet that breaks it down:

https://docs.google.com/spreadsheets/d/1N8qKoOAFhmBhZBxWTf9JwJj5Iwa5thd2u0gYwrlAEdk/edit?gid=0#gid=0

 

It comes out to a little over $2k for the mid expense and $8k of cash needed for the high expense.

TLDR

To start dropshipping, you CAN do it for under $100, but have very low results expectations. 

For the paid tools and paid ads route, it’s very plausible to start making a profit right away. But if you look at industry standards for what is normal, you should be prepared to spend $2k - $8k and not make a profit for up to 6+ months.

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