What is the necessary budget to start in Dropshipping?

Starting a dropshipping ecommerce activity has a clear advantage: no stock management, no deliveries. Expenses linked to the launching of your project are far smaller than for a traditional e-commerce website. Still it is advisable to set up a provisional budget as it depends on the strategy you will adopt. You cannot succeed without a minimum investment! πŸ˜‰

Mandatory charges 

Whatever the strategy you adopt for your store, some charges linked to your activity's smooth operation are inevitable. 

For your business 

  • Internet Connection: The first thing to need for a good start is of course your equipment. Besides a high-performance computer, a good Internet connection is essential to run an online business. The monthly subscription you pay to your Internet service supplier is therefore part of the budget you need to start your activity.
  • Professional bank account: depending on the bank you wish to work with, you should budget the charges linked to the opening and managing of your professional bank account. You can first contact the bank managing your personal accounts as you may be able to negotiate interesting fees.
  • Tax and income tax: depending on the status you choose, you should take into account the social charges and taxes applicable to your situation and your revenue.
  • VAT and customs fees: Import VAT and customs fees can be applicable on the products imported by dropshipping from a country outside the EU. These charges are your responsibility and you cannot reflect them on the product prices. πŸ‘‰ Learn more about import VAT

For your activity 

  • Website hosting: The monthly subscription for your hosting solution depends on the functionalities you need. πŸ‘‰ Consult our prices
  • Domain name: paying yearly for your domain name is a small expense that you can delay until your store opens to the public but you should not forget it. πŸ‘‰ Learn more about domain names
  • Payment Institutions transaction fees: depending on the modes of payment you decide to offer on your store, you will have to include in your provisional budget the transaction fees applied by the different agencies. πŸ‘‰ Learn more about payment Institutions
  • Buying products: with a dropshipping activity, you buy products from a supplier then offer them to your own clients. Even if the transaction is not done in that order as your client first buys the product from you, then you buy the product from your supplier who sends the product to your client, these charges will be a major part of your budget and will be used as a basis to define your products' retail prices. πŸ‘‰ Learn more about recommended retail prices for my products
  • Delivery prices: the retail price you apply on your products also depends on the delivery prices of the carrier proposed by your supplier. πŸ‘‰ Learn more about dropshipping delivery

Variable costs 

When your starting budget is set up and your store is launched, you should decide on the strategy that will help you develop and grow your ecommerce activity. Your aim is not to invest a lot but to invest wisely so as to maximize return on your investment. 

Making yourself known

  • Advertising: advertising is an essential tool to make yourself known. Traffic acquisition will be the first strategy to explore once your store is launched. It will allow you to test the situation and see what type of audience is interested in your products. You can control the budget allocated to it. The main job is to know your target and the type of content needed to maximize your campaign results. πŸ‘‰ Learn more about advertising
  • Other communication strategies: there are many other traffic acquisition strategies at your disposal besides advertising to publicize your products on the web: marketplaces, shopping guides, Facebook stores, Google Shopping, Instagram Shopping. The necessary budget to use this type of services varies from one platform to another. You will have to test what works best for your activity. πŸ‘‰ Learn more about traffic acquisition strategies
  • E-mailing: sending newsletters and dunning emails is also a good way to keep in contact with your existing client base and retain it. The budget depends on how often you will do your e-mailings and on the number of clients you will contact. πŸ‘‰ Learn more about emailing

Optimizing your store 

  • External tools: to optimize your store, some paying external tools might prove useful! πŸ‘‰ Learn more about external tools
  • Suppliers: to improve your activity, some dedicated services (such as affiliation, specialized web editing, customized technical development, etc.) may be budgeted. πŸ‘‰ Learn more about our partners

πŸ’¬ Do not hesitate to contact your Business Coaches if you have any questions!