Costs Involved in Dropshipping

Emma Rowlands
Costs Involved in Dropshipping

Dropshipping is a popular business model and known for its high profits and low setup costs. It has been adopted widely, especially amongst people who want to work from home, or who fancy a side hustle on top of their 9-5. Thanks to the flexibility of dropshipping and general low input, it’s a great way of making money. 

So what’s the catch? If dropshipping were that simple, everyone would be doing it right? 

Well, a lot of people are! An estimated 23% of all online sales globally adhere to the dropshipping model. You can sell pretty much anything this way - clothes, makeup, furniture, accessories and yes - you guessed it - vaping products. 

How does dropshipping work?

Dropshipping is simple and straightforward. After setting up a dropshipping account, you select an inventory of products you wish to sell. You then advertise these products, and when customers buy them, the wholesaler (in this case, us) will package and ship the product to the customer. You don’t have to keep the stock in your home or even frontload your stock before selling. Simple! To work out your profit per product, you deduct the price of the wholesale cost (what you’ve paid us) from the price of the retailed product (what you’ve sold it for). For example, if you buy a product wholesale for £1, and sell it for £3, your profit is £2. 

What other costs are involved?

The only other costs to consider are your website, subscription and advertising. 


Setting up a website can cost a little bit of money. If you dropship with JM Wholesale, you can have a website included in the price of your subscription. But. if you are quite good with technology, you don’t need to pay anyone else to set up your website. You can set this up yourself on a platform like Wix or Shopify. There might be a monthly or annual cost for having a website, with varying packages available. You will need to select an ecommerce site, so that people can purchase through your site. Alternatively, you could have an amazon or ebay page. 

Dropshipping subscription

On top of the website, you’ll pay one of three monthly prices for a JM Wholesale account. You can find out more by clicking here. The cost of your subscription depends on what you need. Most people choose to start with the Standard Package. This includes:

  • Auto-Upload Product Data
  •  Live Inventory Sync
  •  Integrate all platforms that we support
  •  Bulk Feed Management Tools
  •  Dedicated Business Support
  •  Shipping available throughout the UK
  •  2 x integrations (connect with up to two sales channels)
  •  International shipping to over 180 countries


You will need your potential customers to know you exist. Once you get a customer base, they will hopefully keep on returning to you providing you give good customer service. But, initially, you will need to get the new customers coming in. To do this you’ll need to advertise. 

You can do this on social media, or through more traditional means. Please be aware of the criteria for running adverts containing certain prohibited products like nicotine / tobacco / CBD. 

Advertising costs money, so it’s a good idea to set a monthly spend on this. 

Calculating Profits 

We mentioned before that your profit will be your cost of purchase deducted from your cost of sale. But it’s a little more complicated if you are putting money into your business. 

The best way to break down a monthly profit is to incorporate your spending.

So, here’s an example. 

Cost of website: £22 per month

Cost of subscription: £34.99 per month

Cost of advertising: £80 per month

Retail Sales made: £555.54

Wholesale costs: £111.50

To work out your profit:

Add up all the costs, in this case - £248.49

Then, deduct this from your retail sales. 

£555.54 - £248.49 = £307.05

In this instance, your profit would be £307.05. 

It’s important to remember these figures, otherwise the profits you think you make won’t align with what ends up in your bank account. 


Shipping is not included in the price, so make sure you add shipping prices onto your products and make sure the customer pays these shipping costs as part of their purchase, otherwise this will become an additional cost for you to cover and will lower your profits. 

Can Real Money Be Made With Dropshipping?

Dropshipping can be profitable if you put time and effort into it. It’s the same with any business. If you do nothing, spend nothing, do not try to reach customers, do not advertise your product, then your dropshipping business could fail. If you put in time and effort into customer service, advertising and getting a reputation in your market, then your business will be more likely to succeed. 

Your personal motivation really matters. You will be self-employed, and will need to feel confident in using a computer and responding to customer enquiries. Equipping yourself with knowledge about your products is the best way to keep customers engaged and give them the best possible service. 

Is it for everyone? No. But with a good attitude, you have already won half the battle. 

Often, we get asked how much time needs to be invested it dropshipping. Is it a full-time job or can it be done on the side?

Dropshipping can be done part time or full time, so if you already have a job and want some extra income, this could be a good way to go. It’s also perfect for stay-at-home parents or people who are taking time off work and want to still pay the bills, or for people who want to transition away from employment into self-employment in a gradual way. 

If you are still not quite sure, you can get in touch with our customer service department who specialise in supporting our network of dropshippers. They can also give you the latest tips and tricks in making a dropshipping business successful. 

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