What is the Minimum Investment Required For Dropshipping?

Reading Time: 7 minutes

We have been asked hundreds of times about the minimum investment needed to open a Shopify Dropshipping Store.

We have not yet addressed this issue in a formal manner because the answer is different.

It all depends on your financial ability, budget, and willingness to take risks, just to name a few.

It isn’t really possible to generalize a single size solution.

This article will help you to create a Shopify Dropshipping Store with a limited budget.

This is not the best way to start your business.

This post is not for you if you have more than a few thousand dollars to invest in your business.

Rito will walk you through the steps of a lean Shopify startup if money is tight.

You must be resourceful to succeed in a budget-controlled startup of any type.

You are aware of the process, its value, and the importance of your task and you act accordingly.

This will allow you to identify which products work and which don’t.

Get it Free

Dropshipping is not a magic money-making scheme. To make dropshipping a success, you will need to invest money.

You can however, at first, get away with free trials to try the product.

Access to both an eCommerce site or a supplier is essential.

Also Read  Fastfurnishings Dropshipping Wholesale Program Review

Shopify has been the most visited eCommerce site in the world. It is used worldwide by hundreds of thousands.

Shopify offers a 14 day free trial. You can use the platform for up to two weeks, and you don’t have to pay a cent.

Another option is WooCommerce, which you can install on your WordPress website. If you are looking to reduce costs, this might be an option.

There are many companies and services that you can use to find product suppliers. Many of these companies offer both free trials and always-free options.

Our article on selecting dropshipping suppliers will help you make a decision. We will help you understand all options and considerations.

Oberlo and Spocket are some of the most popular supplier tools. Dropified is another. All these tools, except Oberlo can be integrated with WooCommerce and Shopify.

If we are talking about prices, the most basic dropshipping website can be set up for free.. at least for a short time.

Stepping up

After the first two weeks, you will need to begin paying. Shopify costs around $29 per month.

Dropshipping is a service that requires you to shop around to find the best deal. Spocket is a great option at $19 per month.

Dropshipping services generally cost around $30 per month. There are both cheaper and more expensive options. Each service has its own benefits and costs.

Also Read  Salehoo Dropshipping Suppliers USA Verified List

Domain names are the last thing you will need. You can purchase this domain name through Shopify at $14 per year. You can also use any of the many domain name websites available.

For a basic service, it will cost $73 the first month and $59 each month thereafter. You don’t have to pay the domain monthly.

Extras

Let’s face it, basic services will only get you so far. To make dropshipping a success, you will need to spend more.

You should first consider buying the products that you are selling. Dropshipping allows you to sell the products without the need to store them. This is not what we are suggesting.

You want to ensure that your product is of high quality if you are selling it. Poor reviews can do more damage to your shop than any other.

There is no need to buy every product in your store. You can only sell one version of the product if you offer it in different sizes or colors. This is how you can feel the quality.

These products can be used to advertise once they have been purchased. You can take photos of the product being used or ask friends to do this. This type of application can help increase sales.

This will vary depending on how big your store is and what products you sell. This is not an essential step, and you may not have the initial costs to purchase all your products if you are just starting.

Also Read  6+ Free and Best US Dropshipping Suppliers for Shopify

We recommend taking it slow. Each month, purchase a few products and try them out. You can then focus your next month on other products.

Apps

Apps that enhance your store are another option. Shopify offers many app options. These apps cost a monthly fee.

Apps that assist with bulk buying, cross-selling and exit intent are available. These apps generally cost between $9.99 and $19.99 per month. Our advice is to keep it simple and move up. Do not try to use all the apps within your first month. You can add them as you use them.

There are many tools and services available that will help you increase your profile and sales outside of Shopify. Sell the Trend is one of the most useful tools. This tool helps you to identify current selling trends across many different platforms.

You’ll pay $39 per month, so you will need to decide if it is worth the expense. You can use Google Trends as an initial tool, which allows you to see examples of trends.

Let’s take a moment to look at where we stand cost-wise. Already, we have agreed to pay $59 per month for your eCommerce platform as well as the dropshipping service. Let’s now say that you want to add an additional app for $19.99. It is quite a small amount of money for an additional tool. Now, our monthly total is $78.99

Also Read  WooCommerce Dropshipping Tutorial and Ultimate Guide

Quality control costs for your products will vary greatly from one store to the next. Let’s suppose you only spend $100 to inspect your products. Your total initial cost will be around $200. This also includes the cost for your domain.

Minimum Investment Required

GST & Company Formation

For tax purposes, some countries require that you form a company or acquire a Goods and Services Number.

This is not a problem if you don’t live in one of these countries.

We have already covered Company Formation and GST.

Although you can hire consultants and lawyers, if you are resourceful, this step can be handled for $20.

Shopify Basic Plan

Shopify offers a 14-day free trial. However, in order for your checkout process to work and your store to launch properly, you will need to pay $29 per month.

Domain Name

As our primary domain name registrars, we use GoDaddy and NameCheap.

There are many other options, but these two are the best options. They are affordable and provide reliable service.

Domain names can be purchased for $10/year.

Facebook Advertising

Here is where things get complicated.

Marketers’ initial budgets can vary depending on their financial situation and willingness to try new things.

This isn’t a case where one size fits all.

You will find the best strategies in our Facebook ads Stage 1, and facebook ads Stage 2 posts.

Also Read  How Kingpin (Alidropship Forum) Succeed in Dropshipping?

You will need to spend about $25 using our strategies to evaluate the effectiveness of each product through Facebook ads.

You should be able identify winners quickly if you are able think critically and do your homework.

Some people find the first product they try is a winner.

Others may try several before finding the right one.

It all depends on the person.

Test is the best way to find out which products will work for your brand, your customers, and your ads on facebook.

All of this should allow you to test 20 products for $500.

After revealing your winning product(s), you can scale up your ads .

A single winning product can literally make a 6-figure business.

Instagram Shoutouts

We have provided several ways to identify the best products and generate sales.

Apart from Facebook Advertising, getting shoutouts by Instagram Influencers is one of the most powerful ways to get noticed.

A person who has a large and active Instagram following is known as an Instagram Influencer.

We’re not talking here about Justin Bieber and Selena Gomez. We’re talking about people who have a following of up to half a billion people.

This is a temporary method that only works for one product and is not recommended for long-term use.

Also Read  How to Start a Dropshipping Hair Business?

Instagram Influencer marketing can be found here.

This method can usually be started for around $200.

This is a short-term business model so we focus more on FB Ads than Instagram Shoutouts.

Order Fulfillment

This step is often overlooked when Shopify Dropshipping minimum investments are considered.

However, the truth is that most payment processors such as Shopify, Stripe and PayPal take between 2-10 days to deposit funds in your account once a customer has completed a transaction.

However, you don’t want customers to have to wait for 2-10 days before you ship their products. This is bad business. It will result in customers asking for refunds and even losing their business.

It’s a good idea to have a little capital for order fulfillment.

Your initial order should be completed with $200.

A Shopify Dropshipping Store requires a minimum investment of $779.

Additional Costs to Be Aware of

Payment Processor Fees (PayPal and Stripe, Shopify Payments).

Each payment processor will have a fee. However, these fees are not charged on the money you make. If you sell a product that costs $100, then the fees are deducted automatically from your income before they are sent to you.

The fees charged by payment processors vary depending on where your business is located. Here are some examples of common fees charged by payment processors in the USA:

  • Stripe: 2.9% + 30 cents per successful charge
  • PayPal:2.9% plus $0.30 per US transaction and 4.4% for Internation sales
Also Read  Is eBay Dropshipping Dead or Still Profitable? Smart Discussion

Refunds and Returns

Dropshippers are likely to have to issue a refund or accept a return from customers at some point. It is essential to communicate with customers in the event of a refund. This will allow you to return the item to AliExpress and recover some of your costs.

If the customer returns the product, offer to ship another product. International customers are more likely to return the product.

Good customer service can help you avoid refunds or returns that could cost you around 1-3% of your total income.

AliExpress Product Costs & Shipping Prices

Dropshipping will cost you more than marketing because of the AliExpress product costs. Dropshipping is based on the ability to purchase products from AliExpress and then ship them to customers quickly. However, you must ensure that you are getting the lowest price possible from your supplier.

The SalesSource Chrome Extension allows you to view price history for any AliExpress product and decide when it is a good time. If a product was cheaper in the past, it is likely that there are other suppliers still selling it at a lower price.

Most suppliers should offer free or low-cost ePacket shipping to the USA and other countries. You can use SaleSource’s Product Analyzer to locate suppliers offering better shipping prices and deals by comparing all of the AliExpress suppliers.

Also Read  Cheap Dropshipping Products and Niches to Make Money

Last words

AliExpress and Shopify are the best platforms to start a dropshipping company. How much does it cost to open a Shopify shop? Although dropshipping is a low-risk business model that can be profitable, it still requires investment. Dropshipping is a business model that allows entrepreneurs to increase their chances of success by learning the basics and spending more time on marketing to make their first sale.

If you found these tips helpful, please share it with others to help them on their dropshipping journey.