Are you considering starting your own dropshipping business but unsure how much all the costs will be?
You're not alone.
With so many factors to consider, it can be hard to calculate dropshipping startup costs.
In this article, we aim to give you an honest look into the cost of starting dropshipping in 2024.
Ready to dive in?
What are the different costs of starting a dropshipping business?
When starting your dropshipping business, you have to account for a range of costs, including:
- Startup costs like business registration
- Shopify-related costs like apps, monthly plans, and themes
- Setting up your dropshipping store
- Payment processor fees with platforms like PayPal
- Fees of the dropshipping supplier, like Spocket
- Domain and hosting costs
- Any advertising expenses
Let's go through each of the above and see how much the expenses are.
This can help you plan your own dropshipping startup budget!
Breakdown of the total cost for starting dropshipping in 2024
If you want to see a detailed overview of the total costs involved when starting a dropshipping business, take a look at the following sections:
- Business startup costs. Startup costs range from $132 to $320.
- Ecommerce platform costs. Shopify costs range from $39 to $439 a month.
- Domain name costs. Domain name costs range from $8 to $20 per year.
- Creating your dropshipping store costs. Creating a dropshipping store costs from $0 to $440 per store.
- Product research costs. Product research costs range from $0 to $39 a month.
- Advertisement costs. Advertisement costs range from $0 to $4,000 a month.
- Supplier costs. Supplier costs range from $0 to $40 per month.
So, how much does that end up being in total?
Let's break the costs down:
- One-time costs. Before you can start dropshipping, you can expect to pay between $150 and $700 to register your business, buy a domain, and build your store. If you do all of this yourself, you can make significant savings.
- Monthly payments. To run a successful dropshipping business, you can expect to pay between $150 and $4,300 monthly. This involves Shopify monthly costs, themes, apps, product research, advertising, and supplier costs.
Let's go more in-depth now:
1. Business startup costs
To do dropshipping legally, you need to consider some initial expenses, specifically related to setting up your business.
How much does that cost?
In the US, the average cost of forming an LLC is around $132. In Europe, the average cost of starting your business is around 300 euros.
You can already get started with other parts of dropshipping, but you need to have your business established once sales start rolling in.
Costs of forming an official business: $132 to $340, depending on where you live.
2. Ecommerce platform costs
One of the first things that come to mind when discussing dropshipping is that you need an ecommerce platform to sell your products.
That comes with a cost.
We recommend Shopify for most people, especially beginners, because of excellent customer service, extensive app store, and lengthy free trial.
Plus, Shopify offers free hosting, so you don't have to worry about that.
So, what costs are involved with having a Shopify store?
Shopify monthly payment
The first cost with Shopify is the monthly payment.
Shopify has five plans in total, three of which are the most suitable for dropshippers.
The three plans suitable for dropshippers are:
- Basic plan ($39/month + 2.9% and 30¢ USD per transaction). Shopify's Basic plan has everything you need to get your dropshipping store off the ground. It's the right option for most dropshippers starting out.
- Shopify plan ($105/month + 2.6% and 30¢ USD per transaction). The Shopify plan is a good option if you're already making sales and want to take your store to the next level with lower credit card rates and more staff accounts.
- Advanced plan ($399/month + 2.4% and 30¢ USD per transaction). If you run a dropshipping business doing over a million in sales per year, the Advanced plan is a good solution.
The great thing about these plans is the available free trial.
Shopify offers a 3-day free trial for all of their plans, and after that, you get three months of Shopify for only $1/month.
That's some great savings!
This means that you can get started with an investment of $3 for your first three months, and after that, the minimal paid plan suitable for dropshipping starts at $39/month.
When calculating the total cost, you should also keep in mind that Shopify charges 2.9% and 30¢ for every transaction. However, that comes only into play after you start making sales.
We recommend you read our article on Shopify pricing plans if you want to learn more about the topic:
Shopify apps
Shopify apps extend the functionality of your dropshipping store and, when used right, increase the sales of your Shopify store.
While most Shopify apps are paid, you can get started with minimal investment, and some are even free.
For more in-depth information, we've provided a detailed breakdown in our article on the best Shopify apps for dropshippers.
However, here's an overview of various Shopify apps, both free and paid, that we recommend:
| What you can use it for | Best free option | Cost | Best paid option | Cost |
| Processing dropshipping orders | DSers (for dropshipping with AliExpress) | $0/month | AutoDS (for dropshipping with multiple suppliers) | $12.90/month |
| Social proof (sales notifications) | Proof Bear | $0/month | Prove Source | $29/month |
| Social proof (reviews) | Product Reviews | $0/month | Loox | $9.99/month |
| Social proof (trust badges) | ShopClimb | $0/month | TrustedSite | $39/month |
| Selling internationally (currency converter) | Bold Multi-Currency | $0/month | BEST Currency Converter | $9.95/month |
| Building urgency (countdown timer) | TimexBar | $0/month | Hextom | $9.99/month |
| Building FAQ page | HelpCenter | $0/month | Zendesk | $49/month |
| SMS marketing | SMSBump | $0/month | SMSBump (paid plan) | $19/month |
| Email marketing | Klaviyo | $0/month | Klaviyo (paid plans) | $20/month |
| GDPR compliance | Consentmo GDPR Compliance | $0/month | Consentmo GDPR Compliance (paid plan) | $8/month |
As you can see, you can even get started for free if you select the free app options.
That's the beauty of Shopify apps.
You definitely get more features with the paid apps, but if you're starting out, you can get good savings by selecting the free plans.
Shopify themes
Shopify has both free and paid themes available.
A free theme will go a long way for people just starting out with dropshipping. If you're interested in checking the best free themes there are in Shopify, then check out our article on that topic:
Paid themes like Booster Theme or Turbo Theme can greatly boost your conversion rates. Both of these themes have one-time payments of around $400.
If you're looking for a paid theme that you can pay monthly and has a free plan available, we recommend Debutify. The cost after the free plan for Debutify is between $29 to $149 a month.
Instead of paid themes, you could also use a landing page builder like PageFly, which can be found in the Shopify App Store.
A free plan is available for PageFly, and for the paid plans, the cost is between $24 and $199 a month.
Related articles:
- How to Choose the Best Shopify Theme: 8 Great Tips (2024)
- 10 Best Shopify Dropshipping Themes in 2024 | Boost Sales!
Shopify monthly costs: $39 per month for Shopify's monthly payment, but you can get started with an investment of $3 for the first three months (Shopify's trial).
Shopify transaction fees: 2.9% and 30¢ USD per transaction with the Basic plan. This is only relevant to you after you start getting sales.
Shopify apps: $0 to $200 monthly, depending on whether you select the free or paid apps.
Shopify themes: $0 to $200 monthly, depending on whether you use a free or paid theme.
Total ecommerce platform cost: Between $39 and $439 per month. For the first three months, you can get started as low as $1 per month.
3. Domain name costs
A good domain name is crucial so potential customers can trust you.
Would you buy from a website with the domain name bestdealsguaranteedfreetrial.com?
Probably not.
Shopify offers a free default domain for your site (such as dogbeds.myshopify.com). However, we don't recommend using this default domain for selling, as it sounds untrustworthy.
It's well worth investing in a custom domain name, such as amazon.com, which adds credibility to your online presence.
Extra tip: After you have purchased your domain, you can update your domain to Zoho to get a free professional email address. We've made a tutorial here on how to get it!
Luckily, domains are not that expensive. You can expect to pay between $8 and $20 annually for a new domain name.
You can visit Namecheap to purchase your domain.
Domain cost: $8-$20 per year, depending on the platform you buy from, the extension (e.g., .com, .net, or .org), and if there is a discount or a special deal.
4. Setting up your dropshipping store
When it comes to setting up your dropshipping store, there are many parts involved.
Here are key tasks to consider:
- Designing your logo
- Designing your store
- Building product pages
- Optimizing your site for speed
If you have skills in these areas and want to make some good savings, we highly recommend doing these things yourself.
Building your online store is a skill that will pay itself back in the long run.
However, if you choose to outsource these tasks, there are some costs involved.
Here's how much you can expect to pay when hiring freelancers from platforms like Fiverr:
- Logo design. Hiring someone to create a logo for your dropshipping site costs anywhere between $5 to $20.
- Designing your dropshipping store. When looking at the cost of designing and building an entire dropshipping store, the cost varies anywhere between $70 and $200. This, in most cases, involves other things, too, like speed optimization.
- Speed optimization. If you only need help optimizing your site speed, the cost is around $20 to $60.
- Creating product pages. If you need help with tasks like product descriptions and product photos, Fiverr freelancers can assist, with costs ranging from $20 to $150.
There are obviously other tasks involved when building your online store, but most of them you can do for free.
For example, product photos can often be sourced from your dropshipping supplier.
And once sales start coming in, you can order the product to your home and take your own custom photos.
Creating your logo: $0 to $20, depending on whether you outsource the logo creation to someone or make it yourself.
Designing dropshipping store: $0 to 200, depending on if you build the store yourself or outsource the creation process to someone else.
Optimizing your store for speed: $0 to $70, depending on whether you do basic level optimization with free Shopify speed optimization apps or outsource it.
Creating product pages: $0 to $150, depending on if you outsource it or do it yourself.
Total cost: Between $0 and $440 to create your dropshipping store.
5. Product research costs
You can nail everything else, but if your product is not appealing to your target audience, things will not work.
Fortunately, there are both free and paid product research tools available, each with its own advantages.
We've curated articles on the best free and paid product research tools, which we recommend you explore:
- 9 Best Free Product Research Tools for Dropshipping (2024)
- The 17 Best Winning Dropshipping Product Research Tools
Let's review a couple of our favorite free and paid tools for product research.
AliExpress Dropshipping Center
AliExpress Dropshipping Center is a free-to-use product research tool and one of our favorite tools for finding winning products.
The products in AliExpress DS Center are divided into different categories. Under each category, you can find hundreds of best-selling dropshipping products.
You can also analyze specific products by providing a link to AliExpress products.
Best of all, this tool comes at no cost!
Shine
Another product research tool you can use is Shine (previously Commerce Inspector).
This Chrome extension is designed for store owners who want to examine other Shopify sites and their performance.
Yes, you can spy on the best-selling products of other Shopify stores!
Here is an example of how the data looks like:
Although the monthly pricing plans for Shine are quite expensive, their Chrome extension is free and even allows you to follow two stores.
Sell The Trend
Sell The Trend is a paid product research tool with a 7-day free trial, which you can cancel anytime.
Even though it's a paid tool, it's reasonably priced ($39 a month) for its features.
If you want to learn more about Sell The Trend, we have a more detailed review of the platform here:
Product research cost: $0 to $39 monthly, depending on whether you use free or paid product research tools.
While some product research tools are more expensive, you don't need to make huge investments in them when you're just starting.
Many of the best ways to find winning products are free.
Check out this article from us if you want to learn more about some of these ways: How to Find Winning Dropshipping Products (13 Research Methods)
6. Advertisement costs
While it's a bit hard to estimate, advertising cost is something you should consider when calculating the total expense for starting a dropshipping business.
There are three main options for advertising:
The cost for each is different, so let's break them down:
Based on our product testing experience with paid ads, you can expect to pay $150 to test a new product for your online store.
For example, this might involve a three-day testing period with a daily budget of $50 for Facebook Ads.
Realistically, you could test four products every month, which brings the total monthly cost to $600. However, this cost may vary depending on how quickly you identify a profitable product.
For organic traffic, the cost is technically $0.
If you do TikTok or Instagram videos, for example, you may still need to pay someone to make the videos for you.
In addition, if SEO is your chosen strategy, you may need to invest in a keyword research tool.
The cost of advertising your product with an influencer can vary significantly, with the biggest differentiator being the influencer's audience size.
As a general guideline, you can expect to pay anywhere between $1 to $5,000 for a sponsored post.
Paid ad costs: $600 per month for paid advertising if you test four products with an investment of $150 per product.
Organic traffic costs: $0 to create traffic from organic sources like TikTok or Instagram Reels. There may be other costs, like video production. If SEO is your strategy, you may have expenses like keyword research tools and different writing tools.
Influencer marketing: Depending on the influencer's size, you can expect to pay anywhere between $20 to $1,000 for a sponsored post on your product.
Total advertising cost: $0 to $4,000 per month.
7. Supplier costs
When a new customer orders in your online store, the next step is getting the product into their hands.
This is where suppliers come in, and there are some costs involved.
When it comes to suppliers, you have different options:
- AliExpress product fulfillment platforms, like DSers
- Product fulfillment platforms with direct Shopify integration, like Spocket
- Product and supplier directories, like SaleHoo
- Print on demand supplier platforms, like Printful
Each of these platforms has its own pros, cons, and associated costs.
Prices may vary, but if you're starting out, you can even begin for free with certain platforms or with an investment of less than $50 per month.
Supplier costs breakdown
AliExpress fulfillment platform (DSers): $0 per month for the free plan
Local dropshipping supplier app (Spocket): $39.99 per month for the cheapest paid plan.
Dropshipping directories (SaleHoo): $127 for lifetime access.
Print on demand supplier (Printful): $0 per month
You also have the option of going with a private dropshipping agent, and the prices for their services can vary.
8. Payment processor fees
To accept customer payments, you must add a payment processor to your online store.
The most popular options for dropshippers are:
Each payment processor has their own fee setup. Again, these only come into play once you start getting orders in, so it's not something you should be overly worried about.
Payment processor fee breakdown
PayPal: 3.49% + $0.49 fee per every transaction.
Stripe: 2.9% + $0.30 fee per every transaction.
Shopify Payments: 0.15% fee for every transaction
As you can see, Shopify Payments has the lowest fees among these platforms. However, it has some downsides, the biggest being its unavailability in certain countries.
If you want to learn more about Shopify Payments and the best alternatives for it, we recommend these articles from our blog:
- Shopify Payments: The Definitive Guide (2024)
- Shopify Payments Alternatives: Best Payment Gateways for You
FAQs about dropshipping
Here are a few FAQs related to the cost of starting a dropshipping business.
How much does it cost to start dropshipping in 2024?
Based on our calculations, you can start your dropshipping store with an investment of between $150 and $700. After that, you can expect to pay between $150 and $4300 monthly to keep your store running and test new products.
Can I start dropshipping for free in 2024?
Technically, it is possible to start dropshipping for free. However, we do not recommend this approach. If you want the highest chances of succeeding with dropshipping, you need to have an appealing store, do proper marketing and advertising, and fulfill orders, all of which involve costs.
Can you make money with dropshipping?
Absolutely, you can generate income through dropshipping. You should still remember that it's not any quick rich scheme that many gurus make it sound like. To make money with it, you have to be ready to invest money in it. (Here's more information about this)
Taking action
Reading and absorbing information and knowledge is great (definitely if it's free!), but do you know what's even better?
Taking action!
So, to help you with taking action with what you have learned in this article, take a look at the bullet points:
- Calculate your budget. How much are you able to spend each month for your dropshipping store? Everyone has different budgets; you should calculate your own before starting.
- Choose your strategy based on your budget. Based on your strategy, your starting cost will be less or more. For example, organic TikTok videos will cost less than paid ads. Figure out what's the best option for you.
- See where you can save money. If your budget is tight, you can save money on many things. For example, select the free options for the Shopify apps. Or use the free product research extensions like Shine. Or go with the free themes in Shopify.
- Opt for the free trials. Many options we listed in this article have generous trials. For example, Shopify has a 3-month trial, and Spocket has a 14-day trial. It's not a bad idea to take advantage of these.
- Launch your store. Once you have calculated your budget and have a plan in place, you should go ahead and launch your store. If you need help with the process, we recommend you check our guide on starting your own Shopify store.
Conclusion
It's a wrap for our article!
As you can see, you can get started on your dropshipping journey with a cost-effective approach by carefully planning your budget, opting for the right plans and free resources, and adopting smart marketing and advertising strategies.
If you're starting with a small capital, we recommend you have a stream of income coming in from other sources so you can keep your monthly dropshipping payments up.
That way, you can't lose all of your money while starting.
Did we miss any costs involved with dropshipping?
Let us know in the comments, and we will do our best to add them to the article!
Good luck!
Want to learn more about dropshipping?
Ready to move your dropshipping store to the next level? Check out the articles below:
