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How Much Capital Do You Need For Local Dropshipping?

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How much? This question is always common among newbies who are looking to get into eCommerce and every time we will have or see different opinions or answers and they are all correct or some wrong – It depends.

In this post, I will be answering this question realistically as to how much you really need to start local dropshipping in the Philippines. What is local dropshipping anyway? As we already know, Dropshipping is an eCommerce business model where an individual can start selling goods and services online without a physical presence or engaging in logistics, getting a warehouse, stocking up. The individual simply markets the goods and services online or via any platform and when a purchase is made, The individual buys the products from the supplier and the supplier will send the goods to the customer in the name of the drop shipper. it is pretty a straightforward process.

So what is local dropshipping? When I say “local”, I am referring to the Philippines in this case. Local dropshipping in the Philippines is the same setup as dropshipping as I have mentioned above but the difference between Philippines dropshipping and the dropshipping that we know is the presence of CASH ON DELIVERY. So to put it the right way, What is COD local dropshipping?. Basically, it is the same as dropshipping, what happens here is the same process however the supplier has to be located INSIDE the Philippines and capable of offering COD or cash on delivery to your customer. So, to dropship with COD, you need a supplier who will support that you do not buy products upfront, offers COD on your behalf.

Now that we know what dropshipping is briefly, Let us talk about how much we need to start this business. Personally, I do not believe that you can start dropshipping in the Philippines with ZERO capital. If not for anything – domain, hosting, your internet, etc these are all capital. Capital does not mean money you invest in stocks or shipping or ads, it means whatever helped in facilitating the business to start. So there is nothing like ZERO capital, If that was the case then everyone can do it without spending anything. So how much really do we need to start this kind of business? I will try my best to outline everything I can. So let’s see what we need.

  1. Domain: Domain is your web presence, if you want to open an online store you should have a domain so that your customers can identify you. Doman is relatively cheap! You can get domains anywhere from ₱200 to ₱700 depending on the kind of domain name you want. You can find cheap domains at OJMD hosting website.
  2. CMS Platform / Hosting: Hosting is like your web storage. if you will have a website you need your own portion of online storage. There are different kinds of hosting depending on which platform you choose. We have Shopify which is only $13/Month with FREE SSL. You also have WordPress-WooCommerce which is ALMOST FREE. You can also get hosting for your WP-WooCommerce sites from Godaddy, NameCheap, Bluehost, or OJMD Hosting. Hosting can cost anywhere from $5 month up.
  3. Inventory: Now this one is the important one, Remember that dropshipping does not need or require you to buy inventory upfront, So if you are buying inventory upfront you are not drop shipping. I will leave the cost of inventory at ₱0.00 to ₱10,000(if the dropshipping service requires inventory) because that is the idea in the first place. You only buy inventory once you have ordered and sometimes you don’t even need to buy it – With OJMD dropshipping, we give allowances, we don’t charge inventory upfront immediately.
  4. Facebook Ads: This is important because this is what will generate your sales for you! Learning how to market your products is the key to success in eCommerce. However, this does not mean you have to shell money on it. I will leave the cost from ₱0.00 to ₱10,000. Why? There are FREE courses like Facebook Blueprint. You can also find free resources from YouTube. However, If you choose to spend on courses then make sure you have the budget for it. The next part of FB ads is the cost of ads. This is where your whole budget will go because when you run ads you spend money as well and results may not go your way immediately. So if that happens, you should have extra funds to keep going. If you ask me, my suggestion for Fb ads will be ₱20,000 to ₱30,000.
  5. Themes: For beginners, I recommend using FREE themes. This will save you extra costs when starting.
  6. Suppliers: Now since you are dropshipping, you need dropshipping suppliers as well, Those willing to accommodate dropshipping and cater to your needs. Where can you find dropshipping suppliers? You can start with Shopee. The sellers in Shopee are local you can chat them up and see if you can come up with an agreement. Divisoria is also a good one, You can visit and establish a working relationship with them and see if they can do dropshipping for you. The last option is our OJMD Dropshipping service, Everything is set for you, All you need to do is to import and sell!
  7. Subscriptions: These are additional costs, it can be app subscriptions or subscriptions to your suppliers to use their inventory, It varies depending on which supplier you will be using.

These 6 things are the important ones I can say. Another thing that is really important is your mindset. You should have the right mindset and keep persevering because that is the spirit needed to do eCommerce. Results might not go your way at first but you cannot lose hope because you will find yourself quitting.

In summary, if you ask me the budget you should have to start eCommerce / Dropshipping i will keep it at 30,000 to 50,000. This is just my suggestion. The budget can go a long way depending on your planning and management.

Goodluck on your eCommerce journey.

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