Dropshipping is a simple and easy way of getting an eCommerce business up and running relatively quickly, with minimal startup costs. Before you start your online business, it might be helpful to know the dropshipping costs to get it up and running. This post provides a detailed breakdown of the costs of starting and running a successful dropshipping business.
How Much Does It Cost To Start Dropshipping?
It costs you little to get your dropshipping business going when you are starting. You'll first need to determine if you will sell through a dropshipping store. Other channels don't require you to have your own store, Amazon, eBay, and Etsy, to name a few, but logically, most dropshippers want their own dropshipping store.
You'll need to research some eCommerce platforms if your business model requires an online store. Some platforms, like Shopify, offer a free basic plan on a trial basis which you can use to experiment with your dropshipping store.
A little-known fact about using Shopify for your eCommerce website is that you can request an extension of your free trial plan. However, you may only request an extension once.
You might have to pay for a domain name if you wish to have your eCommerce store branded with your unique store name and URL. You can register a domain name with sites like Bluehost or NameCheap, costing you about $10-$15 for the first year.
After your eCommerce trial ends, and you need to scale your dropshipping business, you will be required to pay a monthly fee or annual subscription to continue running your online store. This is unless you use WooCommerce as your eCommerce platform, which offers its core WordPress plugin free.
The table below shows a breakdown of costs for a few of the popular eCommerce platforms:
|Commission on Sales
|$39 to $299 per month (dependent on features)
|2.4% to 2.9%
|$16.16 to $39.91 per month (dependent on features)
|2.9% + $0.30
|2.9% + $0.30 for transactions made with US debit or credit cards
|$29.95 to $229.95
|3% to 27% (amount varies depending on the pricing plan)
If you use Shopify for your eCommerce website, your annual cost for running the online store will start at $468 for the cheapest plan. Your monthly subscription costs might increase as you add more functionality and features to your online store. Areas of expansion in year one typically include:
|Social media and proof addon
|Email marketing addon
|All-in-One Free Gift on Cart
|Outfy ‑ Automate Social Media
|Viralsweep Giveaways Contests
|Social Bar: Social Media Icons
|Spin the Wheel
In addition to the eCommerce monthly subscription needed to keep your store running, there are other costs like hosting and marketing.
You must set aside a budget to advertise and market your store. Running Google, Facebook, and Instagram ads can cost upwards of $100-$250 daily.
Hosting costs are the costs that are needed to host your online store. Platforms like Shopify include hosting as part of their product offerings, making it easier as you do not need to pay a separate cost for hosting.
If you decide to use a shopping cart system that requires your own hosting provider, you can look at hosting companies. You'll likely want to opt for hosting plans that cover WordPress, WooCommerce, or similar cart applications. This is typically managed WordPress hosting or virtual private server hosting. You will not want shared hosting as it will not let you scale easily.
Consider any of the following hosting options and plans. We've done the work to outline the plans that will work best. We strongly recommend you don't opt for a plan that is less than these, you'll likely have a slow website and performance issues.
- Hostinger – Business WordPress: $3.99/month | VPS 4: $10.99/month
- SiteGround – GrowBig: $4.99/month | Cloud Jump Start: $100/month
- DreamHost – WooCommercce Hosting: $16.95/month | VPS Business: $20/month
- Bluehost – Choice Plus: $5.45/month | VPS Ultimate: $59.99/month
- A2 Hosting – WooCommerce Sell: $49.99/month | VPS Lift 4: $59.99/month
Dropship Supplier Costs
After you have your store up and running, you will need products you can sell, which means you need a dropshipping supplier to provide you with products.
Most top-rated dropshipping supplier directories and platforms will charge an annual or a one-time fee. Below are a few dropshipping suppliers compared:
|Free Plan (Y/N)
|$299 One-time fee for lifetime access
|No automated integrations
|$67 annual fee, or $127 lifetime fee with access to 8,000 suppliers
|Shopify, WooCommerce, BigCommerce, Weebly
|Shopify, WooCommerce, CommerceHQ
|Shopify, WooCommerce, BigCommerce, Wix, Squarespace
SaleHoo is a dropshipping app that integrates with Shopify. This integration makes it easy for dropshippers to find and automatically add products to their store and ship them directly to customers. Spocket is a good choice for your dropshipping business if you have a Shopify store.
Zendrop is another app similar to SaleHoo that provides you access to dropshipping suppliers and their products which integrates into your eCommerce store. Zendrop is a bit more expensive for the starter paid plan, but it is more customer-centric than most.
Spocket seamlessly integrates into Shopify and WooCommerce and uses suppliers from the US and EU. The shipping times on Spocket are significantly shorter, between 2 to 5 days, compared to 20 to 30 days with some other options.
So, depending on which supplier directory and platform you choose, your average monthly cost can range from $29 to $399. Alternatively, you could opt for a lifetime option and pay a once-off fee of $127 or $299 for directory access without the automation.
Finding dropshipping suppliers is as easy as typing “dropshipping suppliers” into Google and sifting through your Google search results. There are well over 100 dropshipping business suppliers across all niches.
Some suppliers specialize in a certain niche, like clothing, beauty, makeup, or jewelry, and others are aggregators of multiple suppliers. The value is in the automation between the supplier and the eCommerce platform.
You might be overwhelmed by your search results, but finding and using reputable suppliers that deliver excellent service is essential. Look at dropshipping suppliers with a quick turnaround time and who deliver on their promise.
Dropshipping Product Costs
Once you have decided upon a dropshipping supplier, the next step is finding the right products to sell in your store.
Doing Niche Research
Before beginning your dropshipping journey, you might know your product niche and the kinds of products to sell. However, it is not too late to begin if you have not thought about this.
Deciding on the right products can either make or break your dropshipping business, so researching the trending products that sell fast with maximum profit is worthwhile.
One way of finding trending products is using Facebook Audience Insights to see what products people like, comment on and share the most. You can target those products or similar products within the same niche.
Another way to find trending products is by using Google Trends to find shopping trends, product trends, or even trending product niches.
Once you know the product niche you will be operating in, you can narrow your search until you find products that will fit your store.
Amazon also publishes the best sellers list for nearly every category, which is updated regularly. Sifting through this list will give you an idea of the products that are top sellers on Amazon.
If you have already decided on the products you plan to sell in your store, doing additional research into trending products and niches cannot hurt. In fact, it will help your store to stay up-to-date and relevant to the latest trends.
You can find more niche and product research information in the following posts.
- How To Start A Dropshipping Business In 2022 – 10 Steps To Guarantee Success
- Profitable Dropshipping Niches to Start Selling in Today
- Best Dropshipping Products in 2022 to Maximize Profit & Propel Growth
Sourcing and Sampling Products
Before you start selling any products in your store, you must ensure that the products you sell are high quality and delivered on time. If you fail to deliver in any of these areas, your dropshipping business will be doomed before you even start.
One sure way to ensure product quality and shipping times is to order a few products yourself. While you don’t necessarily have to order every single product, you should at least order one from each supplier.
This way, you will get an idea about shipping times, packaging, and product quality. Your experience of this entire process will reflect the service and quality your customers will receive.
You can also get first-hand experience with the customer support you can expect from your suppliers. Furthermore, receiving samples of products from your suppliers will allow you to create marketing videos for sharing on your various social media platforms.
The cost of ordering sample products from your suppliers could vary depending on the niche you are selling in. If you are not selling items like high-end jewelry or costly electronic goods, you can expect to pay about $100 for smaller items from your suppliers.
Dropshipping Store Costs
Your dropshipping budget will vary depending on your particular needs and preferences. However, we can provide you with a base figure of how much you can expect to budget for your dropshipping startup costs based on one year of operation.
For example, if you are based in California and you opt to use Shopify with Spocket, your first year of costs will look something like the following:
- Online store: Basic Shopify membership @ $39/month, over twelve months, roughly $350.
- Drop Shipping Supplier access: Spocket twelve-month membership at $29.99/month, over twelve months, amounts to roughly $360.
- California LLC filing fee: $70
- California LLC annual tax: $800
Total first-year startup costs: $1, 580
The figure provided above is not exact, as it only gives you an idea of how much you can expect to spend on your store for one year. If you choose a different supplier, that would change your cost and depending on the eCommerce platform you choose, you will pay more or less.
Your LLC costs might also vary depending on the country/state you reside in. It is essential to take all of these factors into account when starting your dropshipping business.
Hiring It Out
You can always outsource if you do not have the experience or time to do dropshipping.
Many capable people have perfected the art of dropshipping and would be willing to provide you with their services, for a fee, of course!
Platforms like Freelancer have experienced dropshippers that can guide, advise and even handle all aspects of your dropshipping business.
When using platforms like Freelancer to outsource your dropshipping needs, it is essential to use experienced individuals with positive feedback and reviews.
Outsourcing your dropshipping can be a good way to run your business. Still, you need to be careful with which aspects of your business you are outsourcing and how many hours per week you will use outsourced resources.
When you outsource your dropshipping needs, you can expect to pay between $20 to $35/hour for an experienced dropshipper. Some dropshippers can charge as much as $60/hour.
If you employ the services of a dropshipper from Freelancer for eight hours a week at $20/hour, you can expect to spend a total of $160.
Starting your own business can be rewarding and fulfilling, and knowing that you have complete control over your entire business is comforting.
Outsourcing your dropshipping business can be a great way to start if you have the budget. But, when you are running on a tight budget outsourcing your business can become costly.
If you have the confidence, patience, and will to learn and grow with your business, then managing your dropshipping business can be a rewarding experience. Besides, what better way to learn about a dropshipping business than to get hands-on experience?
YouTube, Udemy, and many other online education sites have countless training and online courses to learn about nearly every detail of running your dropshipping business.
You can learn from the experts and put into direct practice everything you learn from the experts.
For beginners, a dropshipping store on Shopify is one of the fastest and easiest ways to get started, as it provides you with all the tools you need to get your business going. A Shopify Basic plan starts at $39 ($29 if you pay annually). Shopify Basic provides you with the following features:
- Online store
- Unlimited products
- 2 Staff accounts (staff members with access to Shopify admin)
- 24/7 customer support
- Social media and other online marketplace integration
- Up to 4 inventory locations
- Manual order creation
- Basic reports
- 2% Transaction fees
You can scale up to the Shopify ($105/mo) or Shopify Advanced ($399/mo) plans as your business grows and expands.
The key differences between Shopify Basic and Shopify Advanced plans are that Shopify Advanced provides 15 staff accounts, as opposed to 2 staff accounts for the Shopify Basic plan.
Shopify Advanced includes a custom report builder, whereas Shopify Basic provides basic professional reports. All plans now offer up to 1,000 inventory locations.
Note: At the time of writing, Shopify offers three months of Shopify Basic at $1/month for three months.
Shopify vs WooCommerce
Shopify and WooCommerce are two of the best eCommerce platforms available today, and it is by no mistake that these two platforms are regularly featured as the top-rated eCommerce platforms.
Both Shopify and WooCommerce are easy to build, manage and launch an online store. The simple and intuitive user-friendly experience is unbeatable and makes these platforms the best.
In the table below are the pros and cons of Shopify and WooCommerce so that you can choose the best one.
|Free 14-day trial
|Basic plan has minimal features
|Free to use
|Must buy web hosting, domain, and SSL certificate
|Most dropshipping integrations
|Sellers must buy a custom domain name or import one
|Sell products and services, and accept bookings and recurring payments
|Steep learning curve to learn WordPress
|A limited selection of free themes
|Multiple plugins to add functionality
|Several payment integrations are available
|Need paid plugins for payment
|Multiple payment methods including: Stripe, PayPal, WorldPay, and Shopify Payment integrations
Dropshipping Marketing Costs
Your dropshipping business is incomplete without marketing. Marketing your dropshipping business is one of the most important steps to attracting customers and growing your online business. How else will you grow your business and get it out to the public if you ignore your marketing efforts?
Like everything else, marketing takes time, effort, and money. Unless you are a marketing expert, this step is something that you will have to learn as you go. There are several methods of marketing your business, which can involve both paid and organic traffic.
Paid Traffic Costs
Before we dive into the details of paid traffic, it is essential to mention that this is one of many forms of marketing your online store. You can market your store using organic traffic if you run your business on a tight budget.
Organic traffic is any traffic that comes to your store via a search engine that isn't paid for. Organic traffic takes time to grow and is not likely to start providing ample traffic to an online business for at least six months with content creation.
Organic traffic is the result of your inbound and search engine optimization. Here you can look at writing blogs and targeting specific keywords in your blog content. This strategy increases your chances of ranking higher in Google search for those keywords.
Paid traffic, on the other hand, comes from a paid search advertising campaign that you create with Google Ads or Microsoft Ads. Paid ads appear in the top section of the Google search results page.
Running paid ads on Google can become costly, and companies can spend between $1,000 to $10,000 for an ad campaign on Google Ads for a month.
The average cost for advertising on Google depends on various factors such as niche, ad network (search or display), and campaign targeting. For example, the average CPC (cost per click) for the Google Search Network is around $1 to $2, while the average CPC for Google Display Network is less than $1. However, it is easier to control ad spend on Google Search than on Google Display.
If you plan on using paid ads for Google, the table below provides a breakdown of the costs involved:
|Google Ads – Search Network
|Google Ads – Display Network
|$1,000 to $10,000/mo
|$1,000 to $5,000/mo
|Average Daily Cost
|$30 to $400/day
|$30 to $150/day
|Cost Per Click
|$1 to $2 per click (min)
|less than $1 per click
|Outsourced Mgmt Costs
|10% to 20% of ad spend per month
|10% to 20% of ad spend per month
The cost of Google Ads will vary depending on factors like campaign settings, such as budget and bid.
Content Marketing Costs
Content marketing includes content writing for blogs and newsletters. As mentioned, blogging is a form of driving organic traffic to your site and is one of the easiest and simplest ways to market a dropshipping business.
The costs here are negligible if you do this step yourself. The trick here is to find keywords that people are searching for the most and then create content to target those keywords.
Here, tools like Ubersuggest and Google Keyword Planner help find keywords people are searching for.
Content marketing is an “overarching” marketing strategy that includes all forms of content creation, such as social media, email marketing, and SEO.
If you do not have the time or skills to create your own content, you can outsource this part of your marketing to someone experienced in SEO and content marketing.
Places like Fiverr have experienced content marketers willing to assist you with creating and rolling out a content marketing strategy.
Hiring a content writer on Fiverr can cost anywhere from $0.04 to $0.25 per word. To preserve the budget, aim for content writers in the $0.04 to $0.10 per word range. Posts should be 500 words or more, with important posts around 1500-3000 words. Important posts have keywords with a large search volume that you want to target specifically with your content and products.
Social Media Marketing Costs
Social media marketing is another excellent strategy for marketing your dropshipping business. There are two methods of approaching social media marketing: organic and paid.
With organic social media marketing, you can write Facebook posts, create an Instagram reel, story, or post to promote your dropshipping business and products. You can create tutorial videos or promotional shorts on YouTube and TikTok if your audience is more video-centric. You can create pins of your products and promotions on Pinterest if your products are visual in nature.
This step forms part of your content marketing strategy and can go hand-in-hand with writing blog posts. When you publish a blog post, you also ensure it gets distributed across your most important social media channels.
There are also paid social media ads for Facebook, Instagram, YouTube, TikTok, and Twitter.
Here the costs of running paid social media ads can vary depending on factors such as budget spending and the number of advertisers that compete in an ad auction.
The season of the year you run your ad also determines the cost of running an ad on social channels. Events like Black Friday, Christmas, and Easter holidays will drive more advertisers, which increases the number of competitors in an ad auction.
However, if you have a small budget of $100 to run an ad campaign on Facebook or Instagram, it is possible too.
Email Marketing Costs
Email marketing remains one of the most popular and highest-converting marketing methods. So, dropshippers should maximize this traditional form of marketing to its fullest potential.
If your dropshipping business operates within a unique niche, then email marketing will significantly benefit you.
Here are a few email marketing statistics to prove the immense potential of email marketing:
There are over 4 billion daily email users, which is expected to rise to 4.6 billion by 2025. (HubSpot)
- 37% of brands are increasing their budget for email marketing.
- 77% of marketers have seen an increase in email engagement in the last twelve months.
- Smartphone users prefer to receive marketing communications via email.
- Email marketing revenue is expected to reach almost $11 billion by the end of 2023
From the statistics above, it is evident that you should incorporate email marketing as part of your marketing strategy. If you fail to utilize this incredible opportunity to market your dropshipping business, you will miss an opportunity to capitalize on a large portion of the market.
There are many ways of making your email content engaging and lucrative for you and your customers.
The most effective email subject lines will create curiosity and include promotional offers personalized to each email recipient's interests.
The topic of using email marketing for your dropshipping business is an entire blog post on its own. However, it goes without saying that email marketing is one of the oldest and most effective marketing strategies you must pay attention to.
When your eCommerce store is hosted and available to your customers, building an email list should be the next essential step for your marketing.
Once you have built a large email list, you can use that list for sending out email marketing campaigns and promotional newsletters. Mailchimp allows you to send 2,500 emails per month to a list of 500 or fewer contacts for free.
As you grow your business and have more customers on your email list, you can scale up your Mailchimp plan to target a greater audience.
Many of these email marketing platforms will provide you with detailed data analysis of your email campaigns that you can use to streamline your marketing strategy.
Mailchimp's pricing ranges from a Free plan that allows you to send 2,500 per month to a Premium plan which costs $5,500 per month that will allow you to send 150,000 emails per month.
Other platforms like, Moosend, Sendinblue, or AWeber provide similar services as Mailchimp but at more affordable rates.
The choice, in the end, comes down to the number of emails you need to send each month and the level of customer service and support that each of these platforms provides.
Dropshipping Costs Wrap-up
Is it worth it running a dropshipping business after seeing the costs? It is worth the time and money spent in the end. It will be worth it when you finally see your revenue steadily grow.
Do not be overwhelmed by the costs required to build and grow your dropshipping business. Not all items we've listed here are necessary for your dropshipping business. Start small and grow steadily.
As your business grows and your needs expand, you can add additional functionality and features. Reinvest your profits into building your business as it grows and expands.
Finally, marketing is essential to building and growing your business. Do not neglect marketing, it will be more costly to your business in the end.