How Much Does It Cost To Launch A Dropshipping Store?: Subscribe To Our Newsletter

Show All Articles
How Much Does it Cost to Launch a

Dropshipping Store?
David Vranicar • Apps
24 May, 2018 • 9 min read
Subscribe To
Our Newsletter
Join our community of over 1
million entrepreneurs who
have already subscribed to
our newsletters.
Enter your email
Subscribe
100+ Best Products to Sell in 2019

Unsubscribe anytime
Create PDF in your applications with the Pdfcrowd HTML to PDF API PDFCROWD
Recent Posts
Best Dropshipping Products to
Sell in Spring 2019
Feb 22, 2019
10-Step Guide to Building a

Dropshipping Store (With Video!)
Feb 21, 2019
I Signed Up for 99 Email Lists.

Here’s What I Learned.
Technically speaking, you can start dropshipping for $0.00. With the right Feb 20, 2019
combination of free trials and starter plans – and a willingness to look the other
way and hope for the best when it comes to the quality of your products – 45
10 Email Marketing Stats You
minutes of spare time is all that stands between you and a dropshipping store. Need to Know in 2019
[Infographic]
But to borrow from the Big Book of English Expressions: Just because you can Feb 19, 2019
doesn’t mean you should.

The Ultimate Guide to Setting Up
an Instagram Shop
No doubt, dropshipping has lowered the barrier to entry to starting a business. You Feb 18, 2019
can plug into suppliers from around the world and sell their products without ever
holding inventory. It’s an awesome setup.
So awesome, in fact, that people can get carried away, dreaming of a six-figure
business that doesn’t require any investment.
Thing is, starting a successful business has never been free, and that’s still the
case. Even with dropshipping. You don’t need to get a second mortgage, but you
will have to put some money into your dropshipping business before your
dropshipping business puts money into your pocket.
This post will break down unavoidable costs that any (legitimate) dropshipping
store will need to absorb to get off the ground. Read to the end, and you’ll have an
itemized list of your startup costs, plus insights from dropshipping entrepreneurs
who can tell you what to expect.
On that note, let’s hear from Paul Lee, the man behind Husky Beard:
Be comfortable with losing at least $500 before you start to become profitable.
Opening up an actual retail store involves spending near $10,000 before any
revenue comes in, so spending only $500 on an ecommerce business is an 100+ Best Products to Sell in 2019
Be comfortable with losing at least $500 before you start to
become profitable. Opening up an actual retail store involves
spending near $10,000 before any revenue comes in, so
spending only $500 on an ecommerce business is an extremely
small investment that can change your life.
Store Infrastructure Costs

Alright, the most stripped down version of a dropshipping store would include
• A Shopify account
• An Oberlo account
We’re going with Shopify because it’s the most popular ecommerce platform out
there. And we’re going with Oberlo because have you seen the URL of this blog?
Good news! Shopify has a free 14-day trial!
After that, it will cost $29 per month, but at least you can get rolling for free.
So Shopify covers the store part of the equation. Now for the dropshipping part.
Oberlo has a forever free option. You won’t be able to scale with it – there is a 50-
order cap per month – but it’s there. If you’re going to make money dropshipping,
then you’ll need to upgrade to the Basic package at $29.90. But you can at least
get set up before forking over your credit card.
If you’re serious about dropshipping, then there is one more must-buy: a domain.
You can easily buy a domain through Shopify – they’ll ask you about it during your
trial – and it’ll be a one-time payment of $14.
Alright, so if you do it cheap and dirty, the costs of launching your store will look
like this:
And then with a bit of sprucing up, we’re looking at:
Then we’d be looking at $58.90 each month after that – the recurring Shopify and
Oberlo costs, minus the $14 domain.
Let’s pause this math class to hear from Tim Vangness, Dropshipping Guru and
creator of this dropshipping YouTube channel:
For your first store you shouldn’t be paying hundreds for custom
photos, logos and website designs. Your start-up costs should
be very minimal. Your only upfront costs will be purchasing your
product and registering your domain. You can take advantage
of the free trails offered by Google and Shopify to create a
custom email address and get your store up and running. You will want to create
custom photos and videos of your products that you can use on product pages, in
ads, and in product reviews. This can be easily done with any modern smartphone.
Would you enjoy all this dropshipping budget guidance in high definition video
form? Yes? Then click play here (and like and subscribe for more great video
content!):
Realistic Dropshipping Startup Budget for 2019

Watch later Share
Product Validation Costs

This is the “eat your vegetables” portion of launching a dropshipping store: Just
like nobody is going to force-feed you your daily dose of veggies, nobody will force
you to order your dropshipping products for yourself.
But you should still do it.
The awesome thing about dropshipping is that you never handle the products that
you’re selling. While this might solve one of the biggest challenges of commerce –
having cool products to sell – it introduces a new set of considerations. Namely,
you don’t control the quality of the products, the timeliness of delivery, or the
appearance of the packaging.
That’s why we recommend setting aside some time (and money) to order the
products that you’re going to be selling in your store.
This gives you a chance to investigate the suppliers. After you place your order, for
example, you can follow up and ask, “When can I expect my order to arrive?” And
when it does arrive, does it meet your expectations? Is it defective in any way?
Would you want to buy it?
Once you have your products on hand, you can use them to generate interest in
your store. Show them off. Take pictures of people holding them. Ask your friends
what they think (and how much they’d pay).
Okay, so how much will eating your dropshipping vegetables cost you? Well, you
don’t need to buy every variation of every product. If you sell yellow, red, and blue
dresses from the same supplier, you’re probably fine just ordering one color. But
it’s definitely a good idea to order at least one item from every supplier whose
products you plan to offer at your store.
Let’s say that this will cost, oh, $75.
This is mostly an up front cost, so if we add it to the store infrastructure costs

discussed above, our dropshipping business balance sheet looks like this:
So far, we can expect to be paying about $150 by the end of the first month.
Store Enhancement Costs
Alright, that $72.90 that you spent on your website only gets you so far. You might
need to install apps to get all of the functionalities you want. For example, Shopify
and Oberlo don’t have a default way for you to offer discounts for bulk purchases.
There are workarounds, sure. You can offer a “product” that is actually five items
bundled into one, and then sell that quintet at a price lower than buying five
individual items.
But you don’t want to build your business on workarounds. You want your store to
be easy to navigate for your shoppers, and easy to operate for you.
And sometimes, the best solution is to pony up and install apps.
The Shopify App Store is stuffed with apps to address just about every tweak,
improvement, or upgrade that you can imagine. Let’s look at a few common
features that store owners want, as well as a small sample of the apps that can
make it happen.
Cross-selling and upselling
• Cross Sell ($19.99/month) 100+ Best Products to Sell in 2019
• Cart Convert ($19/month)
• Boost Sales ($30/month)
Bulk pricing
• Discount Pricing ($19.99 to $89.99/month, but probably $19.99)
• Quantity Breaks ($16.99/month)
• Bulk Discounts & Sales Scheduled ($18.95/month)
Exit Intent
• Wheelio ($14.92/month)
• Spin-a-Sale ($9.99/month)
• Exit Intent & Messenger Popups ($29.00/month)
You don’t need any of this stuff, but let’s say you really want the ability to give
customers a discount if they buy 10 products instead of just one. Looks like a bulk
pricing app will cost around $20 per month, so let’s tack that on to our starting
costs.
We’re now up to about $170 after the first four to six weeks.
Marketing Costs – the Biggie

Let’s kick the marketing section off with some wisdom from another dropshipper –
Artsy Wall founder Matīss Ozerskis.
The budget [for the first three to six months], from my

experience, should be around $1000. Most of it should definitely
go to marketing – for testing Instagram influencers and
Facebook ads, I’d say about 50% to 80%. The rest should go
into plug ins, domain and store costs and also preferably some
courses if you’re new to this business model, and to Shopify.
Everything we’ve looked at so far has had a specific price tag attached to it.
Marketing doesn’t.
It’s impossible to say how much money you need to spend on marketing. There
are, however, some assumptions that we can use to get an estimate.
The average global conversion rate in ecommerce is somewhere between 2 and 3

percent. That’ll vary by niche and country, but let’s just play this out and say that
conversion rate is 2.5 percent.
That means if you get 200 people to your store, you can expect five of them to
purchase something.
Alright, and how do we get 200 people to our store? Marketing.
At the moment, the biggest marketing channel for dropshippers is Facebook, so

let’s look at driving 200 visitors to your store from Facebook.
WordStream pegs the average click-through rate (CTR) for Facebook ads at 0.9%.
Let’s assume your ads are good, and you have a 1.0% CTR.
Alright, so to get 200 people to your store, you’ll need your ad to reach 20,000
people. The price for 20,000 impressions will vary depending on who you’re
targeting: Reaching American Facebook users will cost more than reaching
Singaporean Facebook users.
According to marketing software provider AdStage, the average cost per thousand
impressions (CPM) was $12.45 in Q4 2017. Let’s call that a clean $12.50.
Now we have an equation to work with:
(20,000 / 1,000) * 12.50 = $250
Looking at these averages, we land at $250 in Facebook advertising costs to

generate five Facebook sales.
There are of course levers that you can pull to manipulate these numbers and
increase your profit. First and foremost, make awesome ads. The better your ads,
the more often people will click on them, the lower your cost per click (CPC). If you
want to do some homework on creating high-impact ads, we got you covered.
You can also target countries with lower CPM rates. Oberlo users have had
success in lots of countries other than the obvious ones; don’t feel like you have to
target the US, UK, Canada, and Australia.
Finally, there are steps you can take to increase the conversion rate and increase
the average order value at your store. Designing easy-to-navigate products pages,
for example, is one way to get people to convert once you lure them to your store.
This would drive up that 2.5 percent conversion rate that we used earlier.
You can also use cross-selling and upselling apps to increase average order value.
Those will cost you a bit of money, but with a few good upsells per month – hardly
an overly ambitious goal – they will pay for themselves.
Conclusions on Startup Costs

oberloapp View Proﬁle
26.1k followers
View More on Instagram
457 likes
oberloapp
Real talk: You have to spend money to make money. 💸 We interviewed proﬁtable dropshippers and
Spending money to launch and ecommerce store only hurts if (a) we thought it
would be free, and (b) we forget that we are doing this to make money.
Remember: The money you spend starting your store is an investment. And
whether we’re buying stocks or launching stores, we invest in things because we
expect a return.
And you know, if you stick with ecommerce, you’ll never stop pumping money into
your store. After your price breaks app does the trick, then you’ll want to get a
cross-selling app. As your Facebook campaigns multiply, you’ll want to invest in
some marketing automation technology. And we haven’t even touched on email
marketing yet, or premium Shopify themes, or logo design tools like Hatchful, or –
well, let’s leave it there for now.
It’s hard to say how much your returns will be, or how long it will take you to recoup
them. But as expenses cross from double digits to triple digits and beyond, remind
yourself that there is no free way to launch a business. Not a good business,
anyway.
We’ll sign off with one more nugget from Tim Vangness:
Once you start to generate sales, you need to use your profits wisely. Set aside
a predetermined amount of all your revenue to cover the costs of returns (any
large business will have returns!) and to cover any unforeseen costs that may
arise. With the remaining profits that you have, I would recommend putting as
much back into growing your business as possible. This will be split into two
main areas.
The first is improving your businesses infrastructure, from website design

through to your email marketing software. Some of these services cost money,
but once you are making a profit, they can have significant improvements on
your conversion rates and customer retention which will make you more money
down the track and allow your paid advertising to be more aggressive than
your competition, as you can determine your life time value of a customer vs
the profits of a single sale.
Want to Learn More?
• How to Start a Dropshipping Business in 2018
• How to Start Your Own Clothing Business
• Help Getting Started With Your Dropshipping Store [Video]
• Dropshipping: Is It Too Competitive to Start Now?
David Vranicar
David Vranicar is a Content Marketer for Oberlo. He wants to give store owners the
tools they need to go from first sale to scale. Follow David on Twitter at
@davidvranicar.
25 Comments Oberlo Blog 

1 Login
 Recommend 5 t Tweet f Share Sort by Best
Join the discussion…
LOG IN WITH
OR SIGN UP WITH DISQUS ?
Name
SeoGuruji • 6 months ago

great helpful article.
27 △ ▽ • Reply • Share ›
disqus_YkMuUoqABM > SeoGuruji • 2 months ago

Seoguruji wrote
△ ▽ • Reply • Share ›
T Marq • 6 months ago

Not a very motivational startup process since most new comers are mostly broke and
desperate to find ways to add some income into their lives. Even Oberlo capping at 50 is
not that motivational either since any profit under 50 will be quckly eaten up by other
operational cost. And, the Shopify 14 day trial is basically useless since that amount of
time will barely get anything going once the products and layouts are made and checked.
There just has to be a more efficient way to give the little guys a chance instead of
squashing their amibitions at the start.
13 △ ▽ • Reply • Share ›
Edita Vitkute > T Marq • 3 months ago

I think they're simply being realistic
2△ ▽ • Reply • Share ›
Giovanni Jimenez > T Marq • 3 months ago
What more do you want? This is probably the lowest cost to start business model
at o e do you a t s s p obab y t e o est cost to sta t bus ess ode
in existence. If you have this mentality you might as well not start anything, you
should be ecstatic that you can start a business for this little.
Dhanur Sehgal • 5 months ago

So, after spending 420$ we get 50$ profit (10$ per sale). That's a loss of 380$. What's
next? How do scale? Or even over the bare minimum losses? The next investment of
500$ will end more or less the same way. You may add 10-20$ profits for upselling stuff
but that still won't matter.
suzy “suze” kiely • 5 months ago

THIS IS REDICULOUS- whats with all the smart ass equations trying to make it look like
a persons got to spend all this money. The truth is you dont have to buy anything= its by
choice. So rather than sounding OTT let me put it in simple terms guys..... well before you
feel like omg- well done to you for trying- you only need money for advertising I know a
few that didn't do any of this stuff!!!! a store on wix is only 15 a month which gives you
more money to put in advertising how you choose.... theres no better Guru than yourself-
learning by mistakes and give and takes- stuff these courses! Iearn yourself- yanno same
with Ecwid - dont fall for 'the shop' 45 a month when you can have a whole store with
everything blogs etc for 15.... you know it makes sense!
robkim55 > suzy “suze” kiely • a month ago

how did you do it?
James Rial • a month ago

My question is how do you profit if it costs $250 for 5 sales and your selling products for
$50 and under? and someone else already asked this but went unanswered, since you 100+ Best Products to Sell in 2019
have to wait to be paid from shopify, you also need to cover the product expense as well,
t? Thi dd t l t th th fi t t t t d
correct? This adds up to a lot more than these figures to get started.
John King • 5 months ago

Having run a few lead gen and ecommerce sites in my time, having the ability to offer
discounts, upsell, cross-sell and more is crucial, and any full featured site will include all of
these things. Where they don't, other sites like Sumo and AutoPilotHQ can provide added
functionality cheaply. The article makes it sound as though Shopify charges a monthly fee
for individual features that you can often find packaged together much more cheaply
outside of the Shopify ecosystem. Stick with Shopify though, and you're easily looking at
$200 all in, each month for what are otherwise, expected features.
It might be a simple and cheaper option when you're starting out, but when your store
takes off, you'll be tied into a limiting and unhelpful system that's prevented you from
learning the hard lessons needed to compete in the wilds.
Stevie Masen • 5 months ago

"The budget [for the first three to six months], from my experience, should be around
$1000." Is that monthly or total?
Chris Ferrero • 5 months ago

At least you're not misleading people unlike most of the fake Shopify "gurus" trying to sell
courses by telling them it costs little to nothing to start a dropshipping business
Joe R. • 9 months ago

Highly unlikely a beginner dropshipper, or any dropshipper, will convert at 2.5%. More
likely 1%, if even that. Should address the numbers in here accordingly.
1△ 100+ Best Products to Sell in 2019
▽ • Reply • Share ›
David Vranicar > Joe R. • 8 months ago
There is definitely variability with that, totally agree.
Donna Tommy Beck • 23 days ago

So a Newbie here ,what's better, Shopify or Oberlo .?
AB Reffat • 5 months ago

I just joined Shopify and oberlo it's been a great experience so far only until I came to the
payment by credit card where I didn't know I had to abide by the law of the land here in
Dubai to be able to have a merchant / payment gateway I need to be licensed legally
through a free zone or the like.
Any idea, because it needs AED15K?

yassine faress • 5 months ago

Hey I dont understand the equation. Why the guy divided by 1000?? Anyone can help me
please?
Brian Giddens > yassine faress • 5 months ago

You mean with the marketing right? 2 things.
1) To get the 200 sales they threw out as an example you would have to cultivate
20k impressions to convert 1% of those people (200) that clicked on the ad.
2) You read that the market source they cited stated that to market to those 20k it
would likely cost somewhere around $12.45. They rounded up to $12.50.
From there it was just math.
12.5 × 20 = 250
12.5 20 250
yassine faress > Brian Giddens • 5 months ago

Ok, Thank you very mucth!!
Horlargunju Hayordele Olarsunc • 5 months ago

please,how can i successfully open my shopify account am from nigeria
Omer Hina 💻📈 > Horlargunju Hayordele Olarsunc • 5 months ago

If you have MasterCard or Visa, you can do it
okan • 5 months ago

What about the creating company spendings and taxes?
Leonard Majachani • 9 months ago

Thank you. Insightful
David Vranicar > Leonard Majachani • 8 months ago

Thanks Leonard!
Julio Xhulio Vasiu • 3 months ago

When a client makes a purchase, does the money come to me first and than I make the
purchase with the money I received from them or do I need to also have the money in
order to make their purchases until I receive their payments?
Reply Share ›
✉ Subscribe d Add Disqus to your site 🔒 Disqus' Privacy Policy
Start using Oberlo today

All accounts have access to the forever free Starter Plan
Sign Up Free
Made for Company Resources Blog Posts
Careers eCommerce Blog Introducing Verified Suppliers
Sell on Oberlo eCommerce Community How to Use Oberlo to Find

Products
Oberlo allows you to easily import
Oberlo Reviews Oberlo Help Center
dropshipped products into your
Dropshipping 101: Ecommerce
ecommerce store and ship them
directly to your customers – in only Oberlo Dropshipping FAQ Buy Oberlo Store Without Inventory
a few clicks.
Press Free Ecommerce Ebooks How To Select Dropshipping
Suppliers
Contact Free Business Tools
What Is ePacket Delivery?
Ecommerce Wiki
What is Entrepreneurship?
What To Sell Entrepreneur Definition and
Meaning
Where To Sell
What Is Ecommerce? Everything
How To Sell You Need to Know
What Should You Sell Online?
© 2015-2019 Oberlo Legal information | Sitemap | English

How Much Does It Cost To Launch A Dropshipping Store?: Subscribe To Our Newsletter

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

How Much Does It Cost To Launch A Dropshipping Store?: Subscribe To Our Newsletter

Uploaded by

Copyright:

Available Formats

Show All Articles

How Much Does it Cost to Launch a

Enter your email

100+ Best Products to Sell in 2019

10-Step Guide to Building a

I Signed Up for 99 Email Lists.

doesn’t mean you should.

Store Infrastructure Costs

Good news! Shopify has a free 14-day trial!

100+ Best Products to Sell in 2019

100+ Best Products to Sell in 2019

100+ Best Products to Sell in 2019

100+ Best Products to Sell in 2019

And then with a bit of sprucing up, we’re looking at:

100+ Best Products to Sell in 2019

Realistic Dropshipping Startup Budget for 2019

Product Validation Costs

But you should still do it.

100+ Best Products to Sell in 2019

Let’s say that this will cost, oh, $75.

This is mostly an up front cost, so if we add it to the store infrastructure costs

100+ Best Products to Sell in 2019

And sometimes, the best solution is to pony up and install apps.

Cross-selling and upselling

• Cross Sell ($19.99/month) 100+ Best Products to Sell in 2019

• Boost Sales ($30/month)

• Discount Pricing ($19.99 to $89.99/month, but probably $19.99)

• Quantity Breaks ($16.99/month)

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

• Exit Intent & Messenger Popups ($29.00/month)

Marketing Costs – the Biggie

The budget [for the first three to six months], from my

The average global conversion rate in ecommerce is somewhere between 2 and 3

Alright, and how do we get 200 people to our store? Marketing.

At the moment, the biggest marketing channel for dropshippers is Facebook, so

100+ Best Products to Sell in 2019

Now we have an equation to work with:

(20,000 / 1,000) * 12.50 = $250

Looking at these averages, we land at $250 in Facebook advertising costs to

100+ Best Products to Sell in 2019

Conclusions on Startup Costs

100+ Best Products to Sell in 2019

100+ Best Products to Sell in 2019

100+ Best Products to Sell in 2019

The first is improving your businesses infrastructure, from website design

• How to Start a Dropshipping Business in 2018

• How to Start Your Own Clothing Business

• Help Getting Started With Your Dropshipping Store [Video]

• Dropshipping: Is It Too Competitive to Start Now?

25 Comments Oberlo Blog 

SeoGuruji • 6 months ago

disqus_YkMuUoqABM > SeoGuruji • 2 months ago

T Marq • 6 months ago

Edita Vitkute > T Marq • 3 months ago

Dhanur Sehgal • 5 months ago

suzy “suze” kiely • 5 months ago

robkim55 > suzy “suze” kiely • a month ago

James Rial • a month ago

John King • 5 months ago

Stevie Masen • 5 months ago

Chris Ferrero • 5 months ago

Joe R. • 9 months ago

Donna Tommy Beck • 23 days ago