Drop shipping Startup Costs: How Much Money Does It Take to Get Started? Drop shipping is one of the business approaches in which the store is not keeping the product physically in its warehouse. Instead of that drop shipper just buys the items from the third-party supplier and shipped directly to the customers. So basically in this model, the seller does not have to physically handle the product directly.
Drop shipping Startup Costs, One of the major differences between the normal physical retail store and Drop shipping store is that the seller does have to keep or maintain its inventory. Instead of the seller purchases inventory from the supplier as per requirement, which are wholesalers and manufacturers to complete its orders. Let’s discuss the benefits of employing the dropshipping model for the e-commerce business.
Benefits of drop shipping
Here are a few other reasons why Ecommerce Drop shipping is such a popular model. It is a great business model for entrepreneurs for their start-up business as you can start your business with limited resources. Here are a few of the benefits of starting a business based on dropshipping model.
Less capital is required
The biggest advantage of using that business model is that it will be easy to launch an e-commerce store by investing an adequate amount of money in inventory upfront. Generally, you have to invest a large amount of capital in purchasing different products which will be stocked in the traditional store model.
In dropshipping model, you don’t have to buy the product unless you have already sale the product to customers and getting paid for the product. so basic without a not significant amount of upfront inventory, you can start selling third-party products and start a successful dropshipping business with very little money.
Easy to get started
It is easy to run an e-commerce business as you do not have to deal with physical products. In dropshipping model, there are few things you don’t have to worry about which are:
- Managing or paying for a warehouse
- Packing and shipping your orders
- Tracking inventory for accounting reasons
- Handling returns and inbound shipments
In an e-commerce business, you do not have to deal with managing a warehouse so the overhead expenses of an e-commerce business are reduced significantly as compared to the retail business.
In this business approach, you can manage your business from anywhere with an internet connection. As long as you can communicate with the suppliers and customers easily, you can easily run and manage your dropshipping business.
Wide selection of products to sell
In this model, you are not preselling the products so you can offer a range of trending products to your potential customers. If your supplier has a product, you can simply list it for sale on your only store with no additional cost.
Easier to test
Dropshipping is useful. In this model, it is easy to check the apatite of the customer for a product before committing to buy a large amount of inventory.
Now let’s discuss what will be the minimum investment required by an entrepreneur to start a dropshipping business
Drop shipping Startup Costs
Drop shipping Startup Costs, It is difficult to predict how much finance is required to start an e-commerce drop shipping model-based business but there are a few things every dropshipping business needs to spend money on to get started, these things are as follows so that we can estimate the Drop shipping Startup Cost
To develop an e-commerce dropshipping store you will need an e-commerce platform so that you can create and host your online store. There are too many e-commerce platforms like Shopify store available online where you can develop your dropshipping store. The rough estimation amount for the e-commerce platform can be within the range of 25 to 30$ per month.
To build trust with the customer is always better to have a domain name. There are number of top-level domain names available like the (example. Shop) but it is always recommended that you should always look for .com that fits your brand if one is available. The estimated cost for a domain will be around 5 to 20 $ per year depending upon the size of the domain.
As we already discussed in the drop shipping approach of business you have minimal involvement with handling your product catalog. It is always recommended to keep some money and time to test out the products you plan to sell. Because if you do not test it will risk your business in a way that you have a chance of listing a product with so many defects and shortcomings which will result in unsatisfied customers and you will be spending lots of time dealing with returns.
For any e-commerce business to start it is always recommended that one should look the ways to reduce the average cost to acquire the customer through a different channel like content marketing SEO and word of mouth. But please note to get starts a start-up business it is essential; to advertise in a product-based business. The most common channels are search engine marketing, display ads, social media ads, and mobile ads. It is always better to allocate at least the budget of $500 to start an e-commerce business.
Best Dropshipping Suppliers
All drop shipping companies have their advantages and disadvantages. Some Best Drop shipping website of supplier names are as follows.
- Worldwide Brands.
- Wholesale Central.