I’m going to assume you want to start a dropshipping business, but you’re broke. I get it, I’ve been there. If you can’t even scrape together $100 then I suggest you do that before reading this as it’s next to impossible to build a successful dropshipping store for $0. You will need some money!
In this article, I’ll guide you step-by-step on the most effective strategy of building a dropshipping business on a shoestring budget that will give you your best chance of success.
Ideally, I would recommend saving up at least $1,000 before pursuing dropshipping but I know that is not always possible. With $1,000 you can actually run some paid ads to drive traffic to your store, however, for a $100 budget, paid ads will not be possible.
1. Choose a Product Without Paying for Tools
Whilst most people pay for product research tools such as Dropispy or Sell the Trend, you can find profitable products without spending a cent.
- The easiest and often best way of finding trending products is to use AliExpress and Alibaba. By typing in random products along with specific keywords, you can often find unique products. For example, typing in “bracelet” will give you thousands of bracelets. However, you could then type in keywords such as dog, religion, basketball, beach, Hawaii, star sign and the list goes. This can help find a passionate audience of buyers for a popular product.
- As a beginner, it can be hard to know which products will succeed. Even experienced drop shippers regularly fail at choosing products. A good indication of choosing a winning product is to see which stores are already running ads, nobody runs ads if they’re not making sales. By searching through Facebook Ads Library, you can see which stores are running ads and you can find similar products or variations. Other stores have already laid out a successful blueprint for you.
- With social media, you see what is trending and what people are already buying. Head to TikTok and check out TikTok made me buy it. There are thousands of unique and popular items that would be ideal for a dropshippiing business. There are also a ton of winning product accounts on Instagram to follow that will show daily new dropship products. Always check out the comments to see how people are reacting to the products.
Whilst paid product research tools can be helpful (I review Dropispy here), they aren’t essential either. I have several articles with product and niche ideas you can check out for free that may help give you some ideas.
2. Source Free Suppliers
Most beginners opt for using a supplier such as Salehoo or Spocket which will cost them a monthly fee to use their service. These platforms simplify the dropshipping process but are an unnecessary cost for more beginners. A good alternative is to use CJ Dropshipping which costs nothing to use their platform and you only pay for the products you sell.
If you’re dropshipping from Aliexpress, you can find thousands of suppliers to work for free. The key is to understand which are the most reliable by researching the seller’s ratings, feedback scores and experience.
There are several directories online available to purchase which help you source suppliers, another unnecessary cost. I have an article on the best ways to find domestic dropshipping suppliers for free as well as several lists of dropshipping suppliers to help speed up the process.
- 20 Baby dropshipping suppliers
- 70 UK-based dropshipping suppliers
- 22 Australian pet dropshipping suppliers
- 50+ US-based pet product suppliers
3. Set up Your Dropshipping Store on a Budget
This is the unavoidable part of the dropshipping process where you will be forced to spend part of the $100 budget. Whilst you could save a little money by using WooCommerce, it’s not worth it. WooCommerce is more complicated, more prone to crashing and you’ll still need to pay for hosting.
Shopify will cost you $39 per month on the monthly plan but is a worthwhile cost. Hopefully, you’ve made some sales in that first month you can reinvest for the future months.
Shopify is the most popular among e-commerce experts, it’s the easiest to use, it comes with hosting and is amazing value for what it offers. There are several free themes you can use with Shopify but be aware you will be limited with the features it comes with.
I would suggest reinvesting any profits you make into purchasing a upsell and cross-sell app. An Upsell app is one of the powerful ways of increasing conversions and average order value and will pay for itself many times over.
The next small cost which can’t be avoided is your domain. You can purchase a domain from Namecheap for around $12 per year. A simple but memorable name that clearly describes what your store is all you need. For some domain name ideas, you can use Domain Wheel to find available domains.
Creating a logo for your store is a purchase many beginners spend too much money on. Designers on Fiverr can charge hundreds for a logo but in my opinion, is only worthwhile once your store is established and making consistent sales.
You can create a free logo using Shopify’s free logo maker. It’s fast and easy to design a unique and professional logo that will suit any niche.
4. Free Strategies for Marketing your Dropshipping Store
Paying for advertising is the biggest cost a new dropshipping business will incur. It can be difficult to drive traffic to a brand new e-commerce store, but with paid ads, you can drive traffic and make sales overnight.
The price of advertising on platforms such as Facebook, Instagram, TikTok and Instagram has increased significantly as e-commerce has become more competitive. Check out this article for the price of Facebook ads in 2023.
Check out this article if you want my recommendations on whether you need to advertise for dropshipping.
If you’re on a tight budget, paid ads are out of the question as you could blow your budget very fast. There are ways you can still market your business for free or at a low cost.
Whilst not essential, the one cost I would recommend in this section is to purchase the product you plan on advertising yourself. With the product, you can create user-generated content (UGC) by taking unique photos yourself and creating videos of the product being used in real-life situations.
You can then use social media platforms such as TikTok and Instagram to post videos with the hopes that one of them will go viral. You can also utilize Facebook groups within your niche by providing value and helping other members of the community and answering questions.
Depending on your product or niche, Pinterest can be a powerful and free method of driving traffic by making pins. This option is most effective within niches where females are your target audience.
If you’re looking at creating a long-term strategy, SEO is the best method of driving traffic to your business without spending any money. Landing on page one of Google for keywords related to your products is powerful but can be difficult and can take several months before Google ranks your website.
5. Reinvest and Scale
If you’ve managed to make sales with spending under $100, it’s time to reinvest any profit you made back into your business. By making sales, you’ve established proof of concept. Your product or niche has proven its potential, now it’s time to scale your business to the next level.
Any profit made should be reinvested in paid advertising campaigns and a few conversion-increasing apps as well as continuing your free marketing strategies.
If you’re still on a tight budget, I would suggest taking advantage of Instagram influencers, this is an under-utilized and low-cost way of advertising a product to a passionate audience of buyers. Typically, influencers with between 50k and 500k followers will cost much less and still have a significant audience.
Facebook and TikTok are the most popular advertising platforms for dropshipping because they work. If you’re selling a unique product that has some wow factor, I suggest you reinveest your profit into these platforms to scale your business.
Google ads are the most high-converting platform for e-commerce businesses because the products actually have search intent. Because of this, they are also the most expensive to advertise and why they are primarily used by high ticket drop shippers.
Google advertising should be used for scaling your business once you have the capital. I suggest you learn all you can about running Google ads beforehand.
The next most important cost for scaling is to implement email marketing into your business. This has the best return on investment (ROI) compared to any other form of marketing. I recommend using an app such as Privy or Brevo.
Summary
There are only a few required costs when it comes to dropshipping but there are many optional purchases. Some will help your chances of succeeding whilst others are a scam and a waste of money.
A Shopify subscription, a domain name and the actual product you’re selling will be the only necessary costs. Optional costs that should be considered if you have the budget are a few Shopify apps to increase conversions and an email marketing app.
Whilst it is possible to succeed with dropshipping for a $100 investment, I would advise that it will be difficult.
Running ads is the most expensive cost part of a new dropship business but it also gives you your best chance of success. It allows you to test products with various advertising campaigns before scaling.
Having some kind of regular disposable income you can use for testing with ads would the optimal choice for success. This way you have multiple opportunities for success as opposed to a single attempt.
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