How Much Does It Cost to Start Dropshipping
See real dropshipping startup costs, monthly expenses, and lean-to-growth budgets so you can launch smarter, avoid hidden fees, and break even faster.
Dropshipping can be one of the lowest-cost ways to start an ecommerce business, but “low-cost” doesn’t mean “free.” What you’ll actually spend depends on how fast you want to launch, what tools you need, how competitive your niche is, and how much you’re willing to do yourself.
This guide breaks down true startup costs, monthly running costs, and three realistic budgets you can copy. It also includes the hidden expenses most beginners miss and a simple break-even formula so you can plan with confidence.
If your goal is to make money online with a store that can grow into a serious side hustle (and eventually a real passive income stream), budgeting is the difference between “testing a business idea” and “burning money.”
How Much Money Do You Need to Start Dropshipping? - Quick Answer
Most beginners spend $300–$1,000 to start dropshipping. Here’s the quick breakdown:
- Low-budget ($100–$300): Domain + basic store setup + minimal tools (little/no ad testing).
- Standard beginner ($300–$1,000): Store + domain + essential apps + enough budget to test ads/products.
- Growth-focused ($1,000+): Stronger branding + more tools + bigger ad testing budget to find winners faster.
Rule of thumb: The more you can spend on testing marketing and products, the faster you’ll know what sells—and the sooner you can grow.
Dropshipping is a popular business model for new entrepreneurs looking to start an online store without dealing with inventory or fulfillment. The model works by allowing store owners to sell products directly from a supplier or manufacturer, who then ships the items directly to the customer. This eliminates the need for you to keep stock and makes dropshipping a low-risk business model with a relatively low startup cost compared to traditional retail businesses.
However, while the initial investment can be low, there are still essential costs involved. From setting up your e-commerce store to marketing your products, understanding the necessary expenses will ensure you're prepared to successfully launch and scale your dropshipping business. In this article, we will break down the costs involved in starting a dropshipping business, give you an overview of the tools and platforms you’ll need, and offer budgeting tips to help you stay on track.
Total Cost of Starting a Dropshipping Business: Complete Breakdown
Here is detailed complete breakdown of cost of starting a dropshipping business
1. E-Commerce Platform Fees
One of the first costs you’ll incur when starting a dropshipping business is setting up your online store. You’ll need an e-commerce platform to sell your products. Some of the most popular platforms for dropshipping include:
- Shopify: One of the leading e-commerce platforms for dropshipping, Shopify provides an easy-to-use interface, integrated payment gateways, and powerful tools to help you scale. Shopify plans start at $29/month for the Basic plan, which includes features such as inventory management, store design, and payment processing.
- WooCommerce: This is a free plugin for WordPress users. While the plugin itself is free, you’ll still need to pay for web hosting, domain registration, and any premium plugins or themes. Hosting costs typically range from $5 to $10 per month, while premium themes or plugins may cost between $50 to $200 per year for WooCommerce.
- BigCommerce: Similar to Shopify, BigCommerce offers integrations with a variety of dropshipping apps. The pricing starts at $29.95/month for the Standard plan.
Estimated Cost:
- Shopify: $29/month (Basic Plan)
- WooCommerce: $5-$10/month for hosting
- BigCommerce: $29.95/month
2. Domain Name
A custom domain name is crucial for branding and building credibility. A domain is the web address customers will use to find your store (e.g., www.yourstorename.com). You can purchase a domain name from popular registrars such as GoDaddy, Namecheap, or Google Domains.
Domain name cost: Typically around $10 to $15 per year.
3. Business Registration and Licensing
In the US, business registration usually costs $50–$500 upfront, depending on your state and structure. Some states also require annual fees of $0–$800 (often for reports or franchise fees). If you form an LLC, that filing cost typically falls within the same $50–$500 range, and it can help protect personal assets and make your store look more credible to banks, payment processors, and partners.
4. Dropshipping Supplier Fees
One of the most significant advantages of dropshipping is that you don’t need to handle products directly. Instead, you work with a supplier who handles inventory and fulfillment. However, some dropshipping platforms do charge fees for access to their product catalogs or supplier networks.
Popular dropshipping suppliers include:
- Spocket: A platform that allows you to easily find suppliers in the U.S. and Europe. Spocket offers fast shipping times and quality products. Their basic plan starts at $24/month and gives you access to a curated catalog of products, while higher-tier plans offer more features.
- Oberlo: This is Shopify’s dropshipping app, and it’s widely used by new entrepreneurs. Oberlo offers a free basic plan, while the premium plan costs $29.90/month and provides additional features such as bulk ordering and advanced analytics.
- AliExpress Dropshipping: Many dropshippers source products from AliExpress because of its low prices and vast selection. It’s free to use, but you’ll need to pay for products upfront when a sale is made.
Estimated Cost: $0 to $24/month, depending on the platform you use.
5. Shipping Costs and Fulfillment
Shipping can make or break your margins, and costs vary by item and destination. As a baseline:
- Light items (e.g., phone cases): $1–$3 per order
- Heavier items (e.g., small appliances): $15+ per order
If customers pay shipping, your costs are predictable—but high checkout shipping can reduce conversions. If you offer “free shipping,” you absorb the $1–$3 or $15+ cost, so your product pricing must cover it. Delivery speed matters too: slow shipping can take 2–4 weeks, while faster options can deliver in under 10 days but usually cost more.
4. Marketing and Advertising
The next crucial expense is marketing. With so many online stores competing for attention, you'll need a solid marketing strategy to drive traffic and sales. Popular marketing strategies include:
- Facebook Ads: Facebook ads allow you to run highly targeted campaigns based on user interests, demographics, and behaviors. The cost per click (CPC) can range from $0.50 to $2.00, depending on the competition and your targeting. You can set a budget that works for you, but $5 to $50 per day is a reasonable starting point for a small campaign.
- Instagram Ads: Instagram, as part of the Facebook advertising network, allows you to run visual ads that appeal to users’ interests. Similarly to Facebook, Instagram ads can range from $5 to $50 per day.
- Google Ads: Google Ads allows you to target people actively searching for products similar to yours. CPC prices can range from $1 to $5 per click, depending on your niche.
- Influencer Marketing: Partnering with influencers on platforms like Instagram or TikTok is an excellent way to drive sales. Micro-influencers charge anywhere from $50 to $500 per post, while more established influencers can cost thousands of dollars.
- Email Marketing: Platforms like Mailchimp and Klaviyo can help you send promotional emails, automated abandoned cart reminders, and newsletters to customers. While Mailchimp offers a free plan for up to 500 subscribers, premium plans start at $10/month.
Estimated Cost: $50 to $500 per month for ads and influencer marketing.
5. Apps and Tools
As you scale your dropshipping business, you may need additional apps and tools to streamline your operations. These can include apps for order management, customer support, SEO optimization, and analytics.
- Zendesk: For customer support, Zendesk allows you to manage customer inquiries, track issues, and provide timely solutions. Plans start at $19 per month.
- Shopify Apps: You can find various apps on Shopify’s app store to help with things like product upselling, inventory management, and sales tracking. These apps can range in price from $5 to $50 per month depending on the features.
- SEMrush: For SEO optimization and tracking organic traffic, SEMrush is a robust tool. Their Pro plan starts at $119.95/month.
Estimated Cost: $10 to $100 per month for apps and tools.
6. Taxes and Compliance
Taxes are a real part of dropshipping startup costs. You may need to collect and remit sales tax depending on where you operate and sell. Many stores use tax automation tools with recurring monthly fees. Also plan for:
- Income/self-employment tax on profits
- Sales tax where required
- Local/source-based taxes (location-dependent)
- Customs/import duties for cross-border sales
A simple habit: set aside a percentage of each sale for taxes so growth doesn’t turn into a cash-flow surprise.
7. Product Sourcing and Testing Costs
Your dropshipping startup cost also depends on how you source products and how seriously you test before scaling.
- Product samples: Many beginners order 1–3 samples to check quality, packaging, and delivery speed. Expect $10–$100+ per product, depending on the item and shipping method.
- Test orders: Placing a few “real-world” test orders (to yourself or friends in target countries) can add another $20–$150 total, especially if you’re comparing shipping options.
- Content/creative for testing: If you’re running ads, budget for product photos or short videos. DIY can be $0, but outsourcing UGC-style videos often ranges $50–$200 per video.
- Early ad testing (optional but common): A basic test budget is usually $5–$20/day for a few days, meaning $50–$300 to validate whether a product has demand.
This section matters because the faster you can test products, the faster you’ll know what’s worth selling—without wasting months.
8. Payment Processor Costs
Payment fees are ongoing dropshipping costs that hit every order, so they should be included in your pricing from day one.
- Most processors (like Stripe/PayPal-type providers) charge a percentage + fixed fee per transaction.
- A common baseline in the US is around 2.9% + $0.30 per sale (rates vary by country, card type, and provider).
Example: On a $50 order, a 2.9% + $0.30 fee is $1.45 + $0.30 = $1.75 taken before you pay for product costs, shipping, and ads.
Also plan for occasional extra costs:
- Chargebacks/disputes: often include additional fees and can cost you the order revenue.
- Refunds: you may not always get the full processing fee back, depending on the provider.
To protect margins, factor payment fees into your pricing and avoid low-margin products where a $0.30 fixed fee eats too much profit.
Realistic budgets you can copy
Now the part you can paste into a sheet and plan around.
1. Lean test budget for validating a product
This budget is for proving demand quickly without building a “perfect” brand.
One-time and first-month costs
- Platform plan: entry tier (monthly)
- Domain: low yearly cost
- Spocket: minimum plan that supports your workflow (if using Spocket)
- Samples: one or two key products
- Ads test: small, capped budget
Target spend: $100–$400
When this works best
- You already have content skills
- You can shoot simple UGC-style videos on a phone
- You’re willing to iterate fast and cut losers quickly
2. Realistic starter budget for a store that can convert
This budget is for building something that looks trustworthy and can win sales without heavy discounting.
One-time and first-month costs
- Platform plan + domain
- A polished theme or minor design work
- Spocket plan that fits product volume and workflow
- Samples for top products
- Reviews/social proof tooling
- Email marketing setup
- Ads: meaningful test budget
Target spend: $400–$1,500
When this works best
- You want a real brand feel from day one
- You plan to reinvest profits
- You want fewer refund headaches
3. Growth budget for scaling with ads and content
This budget is for when you’ve proven a product and you’re ready to push.
Typical monthly scale costs
- Higher platform tier (optional, only if needed
- More apps (post-purchase upsells, better analytics)
- Creative production (either in-house or outsourced)
- Larger ad spend with strict performance tracking
Target spend: $1,500–$5,000+ (Scaling is mostly a marketing budget decision.)
4. Monthly expenses after launch
Even if you “start cheap,” you’ll have recurring costs. Here’s a simple monthly checklist you should always track:
- Platform subscription
- Domain/email (small but recurring)
- Apps and tools
- Ads/content production
- Refund reserve
A good habit: keep a “tool audit” every month and cancel anything not tied to revenue or time savings.
How to calculate break-even before spending on ads
This is the simplest math that saves the most money.
Break-even formula
Break-even CPA (cost per acquisition) = Gross profit per order − variable costs
Where gross profit per order is: Selling price − product cost − shipping (if applicable) − payment fees
If your product nets $15 after product + shipping + payment fees, you can’t sustainably pay $20 to acquire a customer. You either:
- Raise price
- Lower costs
- Increase average order value (bundles/upsells)
- Improve conversion rate
- Reduce CPA through better creatives and targeting
This quick check prevents “scale into bankruptcy.”
How to reduce your startup cost without killing quality
Saving money is good—until it creates refunds, disputes, and zero repeat customers.
Cut costs in the right places
- Start with fewer apps
- Use a clean free theme first
- Create your own product photos/videos early
Don’t cut costs here
- Supplier quality (bad products destroy everything)
- Shipping reliability (late delivery kills trust)
- Product page clarity (confusion creates refunds)
Using a curated supplier network like Spocket can reduce quality risk while you’re still learning, which is often cheaper than dealing with constant customer issues later.
Total Estimated Startup Cost for Dropshipping
When starting a dropshipping business, it’s important to have a clear understanding of the costs involved. While the dropshipping model is known for its relatively low startup costs, the amount you’ll need can vary based on your choices of platforms, suppliers, marketing strategies, and tools. Here is a total estimation of dropshipping start up cost presented in a tabular format for your better understanding.
| Cost Category | Low-Budget ($100–$300) | Standard Beginner ($300–$1,000) | Growth-Focused ($1,000+) |
|---|---|---|---|
| Store platform (monthly) | $1–$39 | $39–$79 | $79+ |
| Domain (yearly) | $10–$20 | $10–$20 | $10–$20 |
| Theme/design (one-time) | $0–$50 | $0–$250 | $250+ |
| Dropshipping apps/tools (monthly) | $0–$30 | $30–$150 | $150+ |
| Product samples/test orders (one-time) | $0–$50 | $50–$200 | $200+ |
| Content/creatives (one-time) | $0–$50 | $50–$300 | $300+ |
| Marketing/ad testing (one-time) | $0–$100 | $100–$500 | $500+ |
| Shipping cost buffer (per order) | $1–$5 | $3–$10 | $5–$20+ |
| Payment processing fees (per order) | ~2.9% + $0.30 | ~2.9% + $0.30 | ~2.9% + $0.30 |
| Business registration (optional) | $0–$150 | $50–$500 | $50–$500 |
| Estimated total to launch (typical) | $100–$300 | $300–$1,000 | $1,000+ |
