The cost of dropshipping at the beginning of setting up an online store does not require you to invest a lot of capital, making this highly scalable route ideal for many beginners. In this article, you’ll learn all the essential costs needed to set up your own online store in dropshipping – the main things are the e-commerce platform, marketing, finding suppliers, apps and samples.
E-commerce platform
The cost of dropshipping starts with the rock-solid foundation of a well-functioning online store: the e-commerce platform. In addition to price, it is worth considering ease of use, scalability, dropshipping integrations and automation features. Good options for your ecommerce platform include Shopify, WooCommerce and MyCashflow, and at the lowest end you can get your ecommerce platform for less than ten bucks a month!
Shopify. This ecommerce platform has become an increasingly popular option for setting up an online store in recent years for good reason; it’s relatively easy to set up and use, there are a huge number of useful integrations and the pricing is very reasonable. Even at the lowest price of €24 per month, the Basic package allows you to put an unlimited number of products in your online store, quickly create your own online store and use discount codes and vouchers to increase your sales.
WooCommerce. WooCommerce, a free add-on for WordPress, is also a very useful ecommerce platform for dropshipping. Of course, to use this add-on, you first need a WordPress site, which costs well under a hundred bucks a year to host and domain at Domainhotel, for example. WooCommerce’s strengths are its versatility in terms of the layout and functionality of the online shop, the massive choice of add-ons and the wide range of payment options. On the downside, WooCommerce is not as easy to use as Shopify, so you will need more time to set up your online store with this option.
MyCashflow. Of the three options, MyCashflow, a domestic e-commerce platform, is by far the most expensive – it costs a low of €59 per month with monthly billing. The cheapest version allows you to add 200 products, 500 MB of disk space and 2 different language/shopping versions to your online store. The most popular payment and delivery services are directly integrated into this service, including Klarna, Paytrail and PayPal for payments and Posti, Matkahuolto and DHL for logistics. In practice, MyCashflow can be a very suitable solution for dropshipping, especially for Finnish customers!
Marketing
In practice, the cost of dropshipping is most heavily weighted towards marketing – without effective messaging to your target audience, it’s not easy to find customers for your online store. In the early stages, you will do well with a reasonable marketing budget; around €100 is enough for advertising and the best marketing channels are Facebook Ads, Google Ads and Tiktok.
Facebook Ads. Facebook Ads is a particularly good way of targeting your ads to the groups you want to reach, allowing you to limit your marketing by location, gender, interests, etc. Currently, the CPC (cost per click) on Facebook is $1.05, meaning that each click costs on average around €1.0. On the other hand, if you want to increase the visibility of your online store, reaching around 1000 people currently costs just over €13. You can learn more about Facebook Ads advertising in this comprehensive Hootsuite article.
Google Ads. Google Ads, the world’s largest search engine giant Google’s own advertising program, also provides an excellent avenue for targeted advertising at a reasonable price. Google Ads allows you to advertise in Google searches or on YouTube, for example, so there’s plenty of choice when it comes to reaching your audience. Google Ads allows you to set your own maximum advertising budget, so you don’t spend more than you need to. With Google Ads, you only pay for results, i.e. when customers click on your ad to visit your online store. Google Ads are priced higher than Facebook Ads and for good reason; for example, on Google’s search engine, people often search for information about things specifically with a view to making a purchase. Currently, the price per click for advertising your online store is just over €1 for Google Ads and a much lower €0.40 on YouTube. You can read more about the cost of Google Ads in this WebFX article!
TikTok. As a newer service, TikTok advertising is not yet as used in Finland as the previous two, but especially if your online store’s customer profile is focused on young people, TikTok is not to be missed. It’s worth paying attention to the design and implementation of compelling ads to get the most out of your advertising budget. TikTok also offers a wide range of targeting options, allowing you to target your message by location, age, shopping behaviour, interests or automated targeting. According to an article by Forta Media in Finland, advertising on TikTok is very cheap due to low competition – 1000 impressions cost only €1!
Finding suppliers
The cost of dropshipping also includes finding and managing suppliers. Finding quality suppliers and products is also possible for free, but can take considerably more valuable time and effort. Networks suitable for dropshipping include AliExpress, Worldwide Brands and Syncee.
AliExpress. As a free alternative, you can use AliExpress, which offers millions of different products to choose from. Once you have found the right quality dropshipping products (sufficient demand, light weight, good reviews and high return potential), you should then research the quality of the supplier. Important things to consider when choosing a good supplier are high vendor and product ratings, delivery methods and return options (the best options offer the option to return the products to the supplier). AliExpress products are mostly made in China, so this option may suit your online store if you prefer low prices to fast delivery. A good article on communicating with suppliers can be found in this Best Fulfillment article, definitely worth checking out!
Worldwide Brands. One of the best known and longest running supplier directories is the US-based Worldwide Brands. The main strengths of this service are the quality of the suppliers; only real suppliers are selected (no middlemen) and many of the suppliers in the directory are also used by major US retail chains from BestBuy to JCPenney. Most of the suppliers included in Worldwide Brands are from the US, so using this directory is very useful if you plan to target your online shop at a US or European audience. The price of the directory is normally $299 for a one-time fee, but sometimes you can grab a product for up to $100 off! A free demo of the directory is also available, so it’s worth trying before you buy.
Syncee. If you want to use products from European suppliers to get shorter delivery times for your customers, then Syncee* is one of the strongest options. After all, this service features a wide range of European suppliers, from big names like BigBuy and VidaXL to numerous smaller companies. There are also plenty of suppliers from the USA, Canada and Australia, and you can choose from over 400 categories! You can quickly and easily add products of interest to your own online shop, and you can also customise pricing in a variety of ways. Syncee has a free Starter Plan to help you browse interesting products and suppliers. For an online store, a good option for beginners is the Basic version for $29 per month, which allows you to add 25 products to your online store, contact suppliers directly and use automated ordering, among other things.