To answer the question: how much does it cost to start drop shipping on Shopify? The short answer is: It can cost you between $300 and $500 to start a drop shipping business on Shopify. Part of those figures will cover your yearly Shopify subscription while some of the amount will cover some once off expenses.
Drop Shipping Start-up Variables Differ
Drop shipping start-up variables differ, however the basics that inform the estimated cost to start drop shipping on Shopify are: ShopifySubscriptions, domain name registration, premium theme cost, apps and plugins, marketing and advertising, payment processing fees, cost of goods sold (COGS) – since its a drop shipping venture, you do not need to procure inventory upfront, however there are fees associated with each product the supplier has to deliver to customer.
Why You Should Consider Starting a Drop Shipping Business
Drop shipping is one of the low entry barrier businesses – especially if you are keen to get into the world of ecommerce.
The business is also a low risk way of starting a digital business as you do not need to procure any inventory upfront.
That said, the business model has its costs just like it is with any business. The following section will get into the details behind the cost estimations given in the introduction.
Shopify Subscription Costs
Shopify has flexible pricing and packages. The platform has Basic, Shopify and Advanced plans.
Basic Shopify
The Basic plan costs $19 per month (paid annually $19 X 12 ==$228 ), and $25 per month paid month to month. The plan offers all the essential features and functions that you need to start a small drop shipping business on Shopify.
The plan is budget friendly, however it may have limitations for drop shipping businesses requiring more staff accounts, features and functions.
Shopify Plan
This plan costs $45 per month paid annually ($45 X 12==$540), and $69 per month paid month to month. The plan comes with the features that you get with the Basic Shopify plan plus additional features and functions.
The plan is best suited for drop shipping businesses that want to grow and scale.
Advanced Shopify
Advanced Shopify comes with all the features that you get with the Shopify Plan plus additional features. The plan costs $299 per month paid annually ($299X12==$3588) and $399 per month paid month to month.
The plan is suited for drop shippers running high growth digital stores. The other advantage with the plan is that it comes with lower transaction fees.
With a monthly cost of $299 (billed annually) or $399 per month (billed monthly), this plan is designed for high–growth businesses. It includes advanced features and lower transaction fees.
Shopify Plus
Shopify Plus is a high end and top tier plan by Shopify. The plan is suited for businesses with unique business needs. Prices also vary and pricing can be negotiated with Shopify.
While the Basic plan will suffice for most drop shipping start-ups, it is important to take up a plan that suits and aligns with your long term business goals and budget.
Also note that the costs are recurring as opposed to once off, so you need to factor these into your monthly expenses.
The good part with Shopify plans and pricing is that they are designed to accommodate big and small businesses.
As such, even if you start small with the Shopify Basic plan, the platform can easily grow with you as you keep upgrading to a plan with features required and as determined by the growth of your drop shipping business.
Domain Name Registration
While you can technically run your drop shipping store on a Shopify subdomain (something like: myshopify.yourstorename.com), this is not great for branding.
For establishing a strong brand and solid digital ecommerce presence you need to register custom brandable and memorable domain name.
Shopify domain registration will cost you about $15 per year, while external services like Bluehost will cost $2.95 per month. Whichever route you go: factor in all these costs in your business plan.
Shopify Theme
You could go for a free Shopify theme and set up a great looking online store without incurring any extra costs on procuring a theme. It is advisable to consider getting a premium theme that can give your brand that stamp of authority that you need. Shopify premium themes vary in cost between $100 and $400.
Apps and Plugins
While the default features can set you on a solid path to start drop shipping on Shopify, you will do well to consider some critical apps and plugins to expand the functionalities of your drop shipping store.
Tools that cover aspects such as email marketing, SMS and email, SEO, business analytics, accounting functions, social media integration, etc are essential for the success of your drop shipping business on Shopify.
Without investing into a well researched omni-channel marketing strategy, your drop shipping business will not get maximum mileage and achieve its full potential.
Consider marketing strategies such as social media advertising- this can cost from a few dollars per day to a few hundred dollars depending on your ad budget.
Also consider running search engine marketing (SEM) campaigns, content marketing (a blogging content funnel), email marketing, strategic influencer collaborations, etc if you do have budget for such.
Consider Payment Processing Fees
Every customer buys something from your shop, you will incur payment processing fees.
The amounts charged cover the cost of handling credit card transactions. Different payment gateways have different rates.
Visit Shopify for the latest payment processing fees including online credit card fees, in person credit card rates and additional fees associated with external payment gateways.
Payment processing fees must be a critical consideration as they have a significant bearing on your pricing strategy and overall profitability of your business model.
Miscellaneous Expenses
It is wise and advisable to make provision for incidentals and miscellaneous expenses. These could be business licences, insurance, permits, or any unforeseen expenses.
Do your due diligence and research to make sure that your business is compliant with all applicable regulations in your area and applicable to the type of product you will be selling.
Final Thoughts
Shopify is a leader in drop shopping with unrivalled market share and features. The platform has all the features for starting a drop shipping business.
While the platform takes care of technological aspects of what you need to run a successful drop shipping business, you need to do the spade work and research to refine your business model and budget.
Understanding all the nuances of starting a drop shipping business and the costs involved, will enable you to plan accordingly and increase your prospects of success.
All the best in your new and exciting journey!
