If you've been wondering how much it costs to start a dropshipping store in 2020, then this episode of The eCommerce Lifestyle Podcast is for you!
In today's episode, I wanted to talk about what a realistic dropshipping budget looks like moving into 2020.
How much money does it actually take to get started if this is your first go at it. What if you're unfamiliar with what it actually costs to build a dropshipping business?
Listen in to this episode of the podcast to learn how much it costs to start dropshipping. I'll show you how dropshipping can be done on any budget!
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Hey, what's up everybody? Anton Kraly here from eCommercelifestyle.com and welcome back to the podcast. In today's episode, I wanted to talk about a realistic dropshipping budget moving in to 2020.
So how much money does it actually take to get started if this is your first go at it, or if you're unfamiliar with what it actually costs financially to build a dropshipping business? Now I wanted to do something a little bit different and interesting, so I'm going to talk about this two different ways. So one way is a realistic dropshipping budget.
If you're kind of starting slow, obviously looking to invest less, definitely possible, definitely works. Just know that it's only one option. The other option is if you want to start fast and that means you're going to invest a little bit more, but you're going to be able to kind of get traction faster, have some real data faster and start making sales faster.
Now, I guess hypothetically there could be a third tier here, which is fastest, and that would be buying an existing dropshipping store that's already extremely profitable, but that's going to cost you probably $300,000 to multiple millions of dollars.
So I don't think anybody watching this wants to do that. And even if you did want to do that, I would still advise you build the store yourself, follow Drop Ship Lifestyle, what I teach over there, and then sell your store for that money instead of investing it into one already there.
So let's go through a list of kind of necessary expenses, I guess that's the best way to put it. And the first would be Shopify. Now Shopify is our eCommerce platform of choice. I've been using them maybe since 2011 or 12. I think 2012, something like that. I'm not even sure. I just know that once we switched to them, we were hooked.
And that was after using, Magento, Volusion, BigCommerce, Yahoo Stores, WooCommerce, tried everything. And ever since we found Shopify, we've just been using them. So whether you're starting with almost no budget or a big budget, you still want to use them.
So I'll just put the price in the middle here for Shopify and that is $29 per month. So they do give you a 14 day free trial. So I'll just write 14 days free. And that's going to be one expense again, that everybody has and there's no way of getting around it.
Now there are different tiers to Shopify. They have more advanced plans, but for again, the majority of people that are listening to this podcast, you'll be on the $29 a month plan. It's fine. It's more than enough. Now the next expense that everybody is going to have, and there is no way from getting away from is a domain name.
Now you could buy domain names for as cheap as like a $1.99 on certain websites. But my advice is just buy your domain name direct through Shopify. Once you're in your Shopify admin panel, when you make your free trial, they'll give you the option to purchase a domain name.
You will own it, it'll be yours. But through them, it costs $13 a year for most of names. And the reason I recommend buying it through them is because you don't need to figure out any kind of configuration settings. You just buy it, you click a button and they link it to your store. So again, two expenses that nobody is going to get away from is the $29 a month for Shopify and the $13 per year for your domain name.
Now the next expense that I'm going to put here just because we get a lot of questions about it, is suppliers. Because when you go online, if you're looking to start dropshipping and you search for something like dropshipping suppliers or products to dropship, what you're going to find is a bunch of middlemen websites, these directories that charge you fees either monthly or yearly and they say, "You know, you pay us and you get access to these millions of products and sell them on your store and blah, blah, blah."
Listen, you don't want to do that. Those are companies that really are middlemen and it's almost impossible to make real profit with them. So the type of suppliers that we work with at my company, Drop Ship Lifestyle and the type of suppliers that you should work with to get approved with them costs you a whopping $0 because it's a business relationship.
You become an authorized retailer for them. You get them sales, that's how they make money, that's how you make money. Everybody wins. So if you don't know about this model yet, definitely check out dropshipwebinar.com, I'll put the link below, but it's D-R-O-P-S-H-I-P webinar.com.
And I'll show you these types of suppliers we work with. Again, they would never, ever, ever charge some type of fee to get access to their products. If anybody asks you for money to sell their products, that is a red flag.
Just say thanks, but no thanks and move on to finding legitimate suppliers. Now for somebody that is trying to start for the smallest amount of money as possible, you can literally get away with this $29 a month Shopify, $13 a year domain, $0 for your suppliers. And then as far as like how you're going to get traffic and whatnot, people to come and buy from you, there are plenty of free ways but free ways is take time.
So you could do things like posting on Craigslist, not in a spammy way. I talk about this in Drop Ship Lifestyle and even in another YouTube video. So I'll post a link to that so you could check it out if you want, but you can do that.
You can join different forums and discussion boards and you can share relevant products to your website. You can try to do things like guest blog posts where you're contributing to other relevant websites in your industry and you're allowed to post the link.
So you don't need to spend any more money than this. And I think that should be said. I don't recommend that. I recommend you put more money in so you can go fast. Right? Because why wouldn't you if you can afford it? But if you really want it to go on a shoestring budget, this is all you technically need to spend. But let's talk about some of the things that I recommend that are going to help you go faster. Right?
Start making money faster. Now, the first one would be Google Ads. You guys know I love Google Ads. If you don't join Drop Ship Lifestyle and you'll see how much I use them and talk about them and teach them. But it's my favorite thing when it comes to paid traffic. And with the Google Ads, to do it the right way, when you're first getting started and to go fast, my advice would be to have a budget between $500 and $1,000 per month in ads.
So you know anywhere from like, what's that, 15 bucks to 33 bucks a day going into this. Now, why would it be $500 versus $1,000? Really, it depends on how confident you are with your store and how much budget you have to work with. I should also know whether you're going slow or fast. Google will give you a $300 voucher to get started. So in either of these scenarios, take off $100 because that's free money to get you to start using Google to advertise.
But the reason I like to spend about $33 a day when first starting is because then we're getting a sizeable amount of impressions, meaning people seeing our ads. We're getting a decent amount of clicks, meaning people clicking our ads. And we're able to see what happens on our website.
So I don't want to go crazy and spend like $10,000 the first month in ads or anything because I need to see what's happening to be able to actually make conclusions off of the data, and then improve my website and improve my ads.
And what I've found is the sweet spot is right around there, around $1,000 a month, again, around $33 a day when first getting started out. If you aren't confident or comfortable spending that much money, you could spend a little less and still be moving relatively fast.
Now, regardless of which amount you're with, the goal is not to spend that and be like, "Okay, all as well." Right? I'm talking like first month here. The goal is as you're spending this, you're seeing what products are selling on your website. You're seeing which of your ads are performing the best, and then you're cutting the losers and putting money into the winners.
So ideally this amount is going up every single month, but not because you'll just think, "Let's just try something else." It's because you now know what's profitable, and you have profits from your existing sales and you can reinvest that into faster growth.
So as far as Google Ad budget, again, if you're looking to go fast your first month, my advice is between $500 and $1,000 bucks. Now let's talk about Facebook Ads. So we typically spend about 10% the amount that we spend on Google on Facebook, and let's just say on a monthly basis, right? Could say a daily basis, whatever, but we'll say monthly.
So that would be $50 to $100 your first month that you're running a new dropshipping store on Facebook Ads. So if you're spending $500 on Google, put $50 into remarketing on Facebook. If you're spending a thousand on Google, put $100 into remarketing on Facebook. Now let's talk about some other expenses that can help you go like really fast and you know, kind of just kind of, I don't know, skip the line and of all the people like fighting and seeing what works and testing over a year.
So the first thing would be a store, right? A store meaning like literally where you're going to sell your stuff, which you're going to use Shopify store for. So Shopify, they have free themes and a theme is what your store looks like. Think of it as just like a design, and they have a whole bunch of different free ones. I'm sure you could find a free one that you like, but if you find a paid one that you like, you can pay and you get it on your store.
So even the slow route, maybe you find the paid theme that's like a $100 or $200 and maybe you buy that. So that's a possible expense you can add in here. But when I say store, what I'm really referring to is having somebody build it for you. So at my company, Drop Ship Lifestyle, we actually will build stores for our members.
This is an add on service because we literally have our team do this. But that we typically sell for anywhere between $1,300 and $2,000. I'm going to put $1,300 down here just for the sake of what most people will see if they are enrolling in Drop Ship Lifestyle.
So with that, what you get is a store that is built to match your niche with all the content pages, with the demo product pages, with your logo, with custom images, with Google analytics and webmaster tools and everything set up ready to go for you. So of course, if you were going the slower route, you can build it yourself and you can figure it out and you can definitely make it work.
But just to show the difference between two different realistic budgets. If you want it to go faster and you had the money, I would tell you, just pay us to do it because we'll build you an amazing store in about three to four business days.
So that's another extra possible expense. And of course, I have to note it because I run Drop Ship Lifestyle, but that would be the expense of a coaching program, which of course nobody needs coaching or an online course or anything to be successful. I personally started by learning the hard way by doing all the work.
I didn't even know there were communities or programs online back in 2007 and 2008. In fact, there probably weren't. But I just learned by doing the work. But if you want to skip that way of learning, then you want to enroll in a program like Drop Ship Lifestyle. Again, people typically enroll between $1,500 and $5,000. If you go on my webinar, you will see a special offer. So surprise, you're welcome. And you can get in for about $1,500. So I'm going to put this here as well.
And then what we can do is just look at the differences and this is like... This is everything by the way, this is all in. Other expenses will come up in the future as you scale your marketing, as you need different tools like a bigger email marketing autoresponder. It's free in the beginning, it'll cost you money when you make money, but this is realistic like from day 1 to 30, what you can be looking at.
So again, the slow route, which not saying it doesn't work just takes a lot more time, you're really only looking at about $40 your first month, and then $29 every month thereafter. Again, that's if you want to get traffic yourself and go the route of doing like manual outreach. It's slower but if you don't have money, you can do that.
Faster route, you're looking at total, what are we, probably between, I would say between $3,000 and $4,000 all in. And that would be a onetime like upfront fee. That would get you a full training program like Drop Ship Lifestyle, which was voted best eCommerce course by Shopify by the way, that would get you a done for you website built by my team that's been building stores for over a decade.
So you'd have literally a store and all the training you need. That would get you $100 bucks into Google, Facebook Ads every month for remarketing. That would get you $1,000 to use on Google Ads for testing.
And if... Trust me, if you spend $1,000 on Google in a month and you're not profitable, there's a big, big problem. So if you're in my coaching program and you're doing that, you should be just fine. And then of course, you have that other $40. So those are the options, guys. Just wanted to give you real estimates both ways.
Of course, there is a middle ground, there are plenty of people that start with smaller ad budgets that do enroll into my coaching program and that build them their sites themselves. So I just wanted to give you the extremes of it though.
So hope you found that helpful and hope that helps you make a better decision maybe on whether you're going to even get into this business or not. And definitely hope it helps you to decide, do you want to be a part of Drop Ship Lifestyle?
And if you do, do you want us to just build your store for you? So if you're interested in that, be sure to go to dropshipwebinar.com. You'll get a free training from me and again, I will give you a special offer for hanging out and checking it out.
So appreciate you guys. Thanks for listening in and I'll talk to you all in the next episode of the eCommerce Lifestyle podcast.