Drop Shipping Startup Costs?

If you're dropshipping, it shouldn't cost you much of anything. Your only costs would be your domain and setting up your website. I don't see why there would be a $7k fee to become a dropshipper.

Thanks I have a website which is coming along.

I am planning to start on eBay and Amazon. The dropshipper has a minimum RRP so I can compete on price and still make a profit.

Many thanks Robbie,

I found a handy eBay calculator and I have set up a spreadsheet which incorporates all the fees so hopefully I will have everything covered.

Building eCommerce Sites - Wholesale, Drop Shipping
Discussions on how to build sites that sell physical products. Wholesale and Drop Ship sources.

In my experience with dropshipping, none of them charge an upfront fee. Make sure you are dealing directly with the manufacturer as many claim to be dropshippers but in reality are middle-men. My 2 cents - find a dropshipper that does not require you to buy stock in advance. That 7k can be better spent elsewhere

Good luck on your venture!

Sina

Thanks,

I have found one manufacturer who supplies Tesco, one of the biggest retailers in the world.

The margins could be upto 30% including fees as they set a minimum retail price. Im just paranoid that nothing will sell even if I list it at the lowest price possible.

I have added some design to the pages as all the power sellers do so fingers crossed.

What you will run into on ebay is a lack of feedback. Feedback can sell higher priced products. Once you build great feed back you can charge more. Don't get caught in the bottom feeding price wars.

Thanks,

I've read one tip of buying lots of ebooks to get feedback. Currently I have no sales to get feedback from.

If you are going to start dropshipping, I recommend starting out with a really good marketing budget. Just having a good amount of capital to invest each month puts you MILES ahead of 99.9% of most eCommerce store owners.

I'm a serious penny pincher, and I though I could have a large store and invest nothing, but put in 16 hours a day in marketing my products. Problem is, for most items, I was competing against other people in this massive pool of people who either didn't have the money to invest in marketing or chose not to because marketing is one of those things that most small business owners don't see as vital to their operations. It took me about 6 months of back breaking just to compete, and then I said screw it and hired someone to hire an adwords marketing account and a social marketing account - and within 1 month, I was already ahead of where I was at the 6 month mark and quickly made a good profit from an eCommerce store with 2000 items priced below $30, and an adwords budget of $1000/mo, and I paid my account manager $800/mo.

If you were going to buy PPC ads, you'd link to your own store; why pay eBay all your margins as seller fees when they're not providing the customer?

Some dropshippers are 'free' but others charge you for monthly minimums (meaning you have to make a certain threshold or they wont supply to you) or access to xml data feed. It depends on the industry but some that do charge, they figure the have production costs etc. and if it were free they would attract a lot of tire kickers.

By having minimum orders you are more of a wholesaler and it also puts a lot of other people off, making your competition smaller. (depends on niche though) if you know a lot about furniture or interior design and have the budget to grow the business you would recoup that 7K pretty quickly. It all depends on what you want to get out of it, the niche and your resources.

I consult to a lot of ecommerce stores for their online marketing and none of them dropship. They all import and sell locally. This is more capital intensive but they recoup their money pretty quickly. Their monthly ad spend is very high (10K+) but they make a lot, lot more than this so its justifiable.