Ah, everyone’s favorite topic, money. In this one were not talking about making money so much as we’re talking about spending it. Let’s answer the question of “how much money do you need to start dropshipping?”.
Keep in my you have to spend money to make money. If you’re not willing to part with some money, it will be hard for you to have success with dropshipping. One of the many benefits of dropshipping is the fact the startup costs are so low. There is no need to obtain a 50k loan from the bank or go into debt to start. You do need some funds however and this is what we will be talking about today.
Here are some reasons why losing money isn’t always terrible:
View every time you spend money dropshipping as an investment. As long as you are learning from your mistakes, you are marching towards success. You can’t expect to strike it rich with dropshipping on your very first store with your very first product. It is possible but not likely.
Even if your customers are not buying, you are still collecting data. If they enter their emails or abandon cart, you can use this data to your advantage. Later on, you can create lookalike audiences from this data to help you make sales. Lookalike audiences can help you create extremely targeted audiences that perform very well.
How Much Money Do You Need to Start Dropshipping?
So how much money do you need to start dropshipping? It’s hard to give an exact figure. The thing is it’s all about when you turn profitable. If you start making money after spending $100 theoretically you wouldn’t need more than that. Of course, that’s not the whole story though.
You’ll need to pay to have your store built. Luckily MyDrop.Shop is very affordable. You also don’t get paid via credit card right away. Payments from Stripe usually take five to seven days to arrive in your bank account. PayPal payments will come into your account immediately but they’re only usually a third of total payments. So even if you’re turning profitable on the front end, you may not see some of that money for a week. This means you could run out of cash quickly unless you’ve got enough in reserve while you wait.
The ads may not run profitably from the get-go. It’s not uncommon for it to take four days for a product to turn profitable on Facebook. This is because it can take a while for the Facebook algorithm to optimize. You could also lose money on Instagram ads. This could be because you aren’t choosing the right influencer pages or maybe your product isn’t all that great.
The name of the game with dropshipping is product testing. You could find a winner on the first go. In that case, you’re lucky or simply a natural at it. It may take testing up to twenty products to find a true winner in some instances. Sure you’ll lose money beforehand but that one winner could make up for it, with plenty left over as well. Remember it only takes one winner to change everything.
Having $1000 dollars in capital is ideal if you’re starting dropshipping. It can be done with $500 but you’ll have less room for mistakes. This means you will have to be even more cautious and calculated when cutting ads and selecting products.
It’s also a good idea to have some incoming revenue. This will ensure you never run out of money. The worst thing to happen would be to be on the verge of success and then run out of money. This could completely upset your momentum and throw you back. I’d recommend getting a job to support your dropshipping endeavours if you have to. You can even look into freelancing online if you have any skills at all.
The money needed to start dropshipping is minuscule in comparison to most other businesses. You do need some kind of money to start though. There is no business that doesn’t require some sort of startup costs. Now we have answered the question of “how much money do you need to start dropshipping?” I hope you enjoyed this article. Now go out and have dropshipping success!