Dropshipping – What Further Cost Are Involved

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Hi guys, Neil Waterhouse. I received a question from Laura Dodd asking, what further costs are involved with dropshipping? Now to answer this question, it all depends of course, on what marketplace you’re selling or dropshipping your products on. And I’ll cover the costs to dropship on eBay, Amazon, your own website, like a Shopify store, and also drop shipping on Facebook Marketplaces.

What further costs are involved with dropshipping on eBay

So let’s first talk about what further costs are involved with dropshipping on eBay. With eBay, you can list dropship items on eBay without spending one cent. However, if you’re building a full-time dropship business, I would highly recommend you spend less than a hundred dollars to make your business look professional. I would highly recommend you spend $5 U.S. on getting a professional logo created. And also, getting a professional eBay listing template created, which can get done from $25 U.S.

Cost that are required to start dropshipping on eBay

That is the only cost that are required to start dropshipping on eBay. Dropshipping on Amazon is very similar, and you can also list items on Amazon without spending one cent. Now, when you start dropshipping with both eBay and Amazon, there are no monthly charges. eBay and Amazon charge a commission when items are sold. This is known in the industry as a final value fee.

You can upgrade your store level and pay a monthly fee

Later on, as you start selling more, you can upgrade your store level and pay a monthly fee, and then you’ll pay lower final value fees. But it’s all one step at a time. If you want to know more about setting up a store, I’ll put a link on the screen and below to previous weeks’ video. When you start off with eBay and Amazon, you pay a final value fee based on the price the item sells for. Note though, you only pay these final value fees when the item sells.

If it does not sell, you pay no fee

If it does not sell, you pay no fee. This is one of the awesome parts about dropshipping. You’re not out of pocket for anything if the item does not sell. You only pay fees on every item that sells. Now, some people get worried about paying fees. However, I always think of it the other way around. If you’re paying a lot of eBay and Amazon final value fees, then you must be selling a lot. As corny as it sounds, the goal is to increase the amount of your final value fees every month.

Know your business is growing every month

That way, you know your business is growing every month. And if you pay your final value fees using a credit card, which gives you frequent-flyer points, this can be another way of racking up frequent-flyer points. Which can be also used for not just flights, but these points can also be used for purchasing items like cell phones, iPads, computers, televisions, Xboxes, et cetera. If you want to know more about that, I’ll put a link to another previous weeks’ video on the screen and also below. Sorry, I got distracted, there’s a cow staring at me over there, anyway, moving right along.

Further costs are involved with dropshipping on your own independent website

Next, let’s talk about what further costs are involved with dropshipping on your own independent website, like a Shopify store. First of all, with a Shopify store, there is the U.S. $29 a month fee for a basic Shopify store. But for most people, the big cost with a Shopify store is advertising. With eBay and Amazon, you do not need to spend any money on advertising if you’ve optimized your item correctly, and you’re only using proven dropship items. If you’re only using proven dropship items, buyers will find your items.

 You can also spend money advertising on eBay and Amazon

Now, don’t get me wrong, you can also spend money advertising on eBay and Amazon. However, when you first start off with dropshipping, most people who start dropshipping on eBay and Amazon do not spend money on advertising. And many have built six and seven digit businesses without spending a cent on advertising. Again, I’ll put a link on the screen below to case studies from people who have built six and seven digit dropship businesses from scratch.

Put in some kind of methodology

Now, with your own independent website, like a Shopify store, if you do not put in some kind of methodology to get traffic to your store or to your website, nobody will find your products or your website. Your website will literally be a needle in the haystack or the drop of water in the ocean. Nobody you’ll find your website or your products. So you need some kind of methodology to get traffic. Now, you have several options, and this is based on my 25 years of selling online.

Search engine optimization

The first option is what is known in the industry as SEO, as in “S” for Sam, “E” for Edward, “O” for Oscar, which is short for search engine optimization. This is where you optimize your website, so Google can find and index the products you are selling. Now, some people will tell you this is free. However, SEO takes a lot of time, which means it’s not free.

Time is money

Time is money. If you’re spending your time doing SEO, this is time used that you could be doing something else. Or if you’re paying somebody else to do your SEO work for you, this is costing you money of course, every hour. Now, the next and most popular strategy to get traffic to your website is buying traffic in the form of clicks, from places like Google and Facebook. Now, this strategy can work very well if you know what you’re doing. But it can also be a very quick way to suck your credit card dry.

Buying clicks is referred to as PPC or pay-per-click advertising

In the industry, buying clicks is referred to as PPC or pay-per-click advertising, as in pays in P-A-Y, not paper, some people hear, and they think it’s paper-click, but it’s not. It’s pay-per-click or pay-per-click advertising. When I first started buying clicks from Google, nearly 20 years ago, we were paying around five cents per click. These days, we’re paying on average around $1.30 per click. But some keywords are over $20 for one click. In fact, last time I checked the keyword, insurance, was $54 per click.

You pay-per-click, whether or not you get a sale

Now, the big thing to note here is, you pay-per-click, whether or not you get a sale. For some items, you may need 50 or a hundred clicks to get one sale. And you can have tens, hundreds, or thousands of keywords. And with a new PPC campaign, you’ll normally find less than 5% of your keywords will actually convert. The rest of the keywords will just cost you money, and you need to quickly find out which ones those are and delete them, but that’s another story. The bottom line with buying clicks on places, like Google and Facebook, don’t do it, unless you have completed some kind of pay-per-click course.

I’m not trying to flog a pay-per-click course, I don’t have one

Don’t get me wrong, I’m not trying to flog a pay-per-click course, I don’t have one. So I’m not going to try and flog you a course. So, you can either learn it yourself, or you pay an experienced pay-per-click advertiser to manage your PPC account. But, a well qualified PPC expert, they’re not cheap. And expect to pay around a hundred dollars plus, per hour, for somebody who has qualifications and even more importantly, runs on the board. Now, the next marketplace is Facebook Marketplaces.

eBay and Amazon, there are no cost to list items

And like eBay and Amazon, there are no cost to list items. Hope this week’s video helped you with answering the question of, what further costs are involved with dropshipping? If you want to know more about how to get started with dropshipping, I’ll put a link on the screen and below to a free step-by-step workshop, which includes case studies from people who started from scratch, and built six and seven digit dropship businesses. If you found this video helpful, useful, please hit the thumbs up button, and make sure you hit the subscribe button to the no fluff channel that teaches how anyone can make a full-time living from their home dropshipping. Until next week, stay safe, list more, sell more. This is Neil Waterhouse.

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