In this video, I answer a question that I get asked a lot, which is: How much money do you REALLY need to start a dropshipping business?
The actual startup costs of a dropshipping store are very low – all you really need is $50 for a Shopify plan + a domain name. The biggest expense is the marketing you need to drive traffic to your site.
I talk about 2 different marketing strategies you can use based on your starting budget: one strategy for a low budget, one strategy for a higher budget.
Low Budget ($200+) strategy
- Minimum amount I recommend is $200 + a credit card
- $29 for Shopify plan, $14 for domain name, free apps or free trials. Leaves you with ~$150 for promos. Main expense is marketing.
- Credit card is necessary to have cash flow for fulfilling orders
- With less than $1000, you can’t afford Facebook ads (unless you know exactly what you are doing)
- Can start with cost-effective IG influencer posts instead
- With IG influencer pages, you can negotiate, and your posts can go viral if you are clever with your marketing
- High risk but high reward
- Not all posts do well but some get crazy ROI
- Good learning experience, and can start building up capital
Example ($200+) strategy
- This is how I started Beauty Charcoal in 2017 with less than $500 in the bank
- Found a cheap product that solves a problem and was starting to trend
- Ran simple page influencer promotions, multiple went viral with 5X+ ROAS, some failed
- Provided an amazing learning experience and helped build up capital
Pros & Cons – IG Influencers
Pros: Low barrier to entry, potential for high returns , good learning experience, can use data for FB ads later on
Cons: Competitive, inconsistent, less scaling potential
High Budget ($1000-$2000+)
- If you have $2000 saved up, you can go straight into Facebook Ads instead
- You must be willing to lose some of that money testing and learning, especially if you have no prior experience
Pros & Cons – Facebook Ads
Pros: More consistent than influencers, more scaling potential, better for long term growth
Cons: Expensive & difficult to master, steep learning curve, requires a lot more testing