 What is going on YouTube? Welcome to a new video. So as you've probably seen in the title, today we're gonna be talking about how much money you actually need to start a drop chip in business on Shopify in the UK. Now it's quite a common question. You've probably seen other YouTubers do videos on it. You've probably seen people ask it in Facebook groups and you've probably seen loads of different answers. So I thought why not do a video where I give you my two cents, my experiences and my opinion on the true costs of how much money you actually need. We're gonna be looking at how much money you do need but also when you need that money. As you go through the process, through your journey, you're gonna need a different amount of money in week one than you had to week two and week three and so on. So we're gonna be looking at that so you guys have a true idea of how much money you need before you get started. That being said then, let's get into the video. So here we are then guys, as you can see, I've broken it down week by week. I've put two kind of like separate main columns, a fixed column which is the costs that you can't avoid and then an optional column which is gonna be optional extras, things that you don't have to pay for but if you've got that extra bit of money then feel free to go ahead and spend it. So starting with week one then, we've actually got number one, our Facebook ads without using Facebook ads or without any sort of advertising. We're not gonna drive any traffic and we're not gonna make any money. So in fact, before we get into more details I just wanna say this, the first two weeks are quite conservative. This is how much I spent when I first started and then once we hit week three and week four it's quite aggressive of over-costed things if you like. This is based on if your store takes off and you start doing really well and making a lot of money, I thought it'd be better to over-cost things than to under-cost them. The worst thing to do would be to under-cost them, have you guys start your own businesses and get into week three and week four and run out of money. So I thought if I over-budget things then it prepares you guys if you then choose to start and go ahead and start your business. So week one then based on spending five pound a day on Facebook ads that brings out total cost on ads alone to 35 pound. Based on the 30, 30, 30 rule which is 30% on ads, 30% on cost of goods and then 30% profit that makes it another 35 pounds on our AliExpress orders or the cost of goods. Apps then, I'll put a link to the video that I did on the must have apps on day one. They all come with a free period, free trial period depending on how many orders you get or how many views. So in week one you won't reach any of those thresholds so you won't be spending any money on apps. So that brings out total four week one to 70 pounds. Looking at the optional column then you've probably already aware that you can spend extra money on different themes. The average cost of an extra theme is about 100 pounds so I've put it as that and then logos as well. If you wanna go ahead and go across to Fiverr and pay someone to do your logo or a slogan or something like that, the average cost is 15 pounds hence the total optional costs are 115 pounds in week one. Like I said at the beginning they're completely optional. I didn't spend my money on these two things when I first started. They're not necessary. I still haven't spent money on those things so put them there in case you choose to use them. Moving on then week two then guys, as you can see I've doubled the budget for Facebook ads. Assuming week one has gone well then while we not spend more money on ads. So I've doubled that to 10 pound a day which works out at 70 pound per week. As we get more orders then obviously we've got more products to pay for. Our cost of goods is gonna rise so I've put that up to 60 pounds. Now the reason I haven't doubled that from 35 to 70 again to match that 30, 30, 30 rule is just because the more people we've got placing orders then the greater likelihood we have of our average order value increasing which means there'll be less shipping costs to pay so it should bring that 30, 30, 30 rule more to like 30, 20, 30 which is a good thing because it increases our profit margin. Apps then, again we won't be getting enough views at this point or orders to go through over low so we'll still be in the free trial periods so there'll be no costs there which will bring our total costs for week two to 130 pound. Moving across to the optional column I couldn't think of any optional extras you could need at this point so I've just left that completely blank. If you guys can think of any then leave a comment below in case I've missed them. Week three then, so week three this is when I'm assuming things start to take off it's when things that are getting good for me. Again as I said at the beginning the reason I've based it on things going well is because it's better to over budget something than under budget that the last thing you wanna do is get to this point and run out of money not be able to fulfill your orders so I thought if I over budget things then when you guys come to prepare and actually start your businesses then you're over prepared rather than under. So week three then, Facebook ads. Again I've assumed things are going well so I've doubled the budget again to 140 pounds that works out at about 20 pounds per day exactly 20 pounds per day actually and again our cost of goods has to go up so I'll pull that up to 100 pounds. It's also in week three if you don't know already when you first sign up to Shopify to get a free 14 day trial there is a link in the description so if you wanna use that you will get a free 14 day trial. So obviously once we hit week three we've gone past those 14 days and that's when we have to choose a subscription plan. I've gone for the basic Shopify subscription plan here which is 29 pounds per month. When you first get started it's all you need I wouldn't even consider looking at the additional packages you can go for. So in total then that brings our week three total spend to 269 pounds just for that one week. Now that might sound like quite a lot but what we've got to think is we'll start seeing the payouts now from week one and week two. So whilst that's a 269 pound cost to us we might have made a 150, 200 even more 300 pound profit which means that'll be covered by the profits made from week one and week two. Looking at the optional extras column then I've put additional apps of 50 pound just in case like me during sort of week two, week three, week four I started looking for extra apps just to try and increase conversion rates. So in there I've accounted for things like that so you might choose at this point to implement say mail chimp or a countdown timer like hurrify. So I've just counted that as 50 pounds. Week four then guys this is assuming everything's going well in weeks one to three this is where we start to ramp things up we're doubling again so our Facebook ads been now is at 40 pound per day which is 280 pound for the week. As we're getting more orders there's more products to pay for so our cost of goods if we go up proportionately works out at about 180 pounds and at this point now we'll get in enough visitors enough views and orders to process that we'll have to start paying for our apps. So I think oh below it's once you go above 50 orders you have to upgrade to the minimum which is 30 pounds a month and then upsell product to upsell by a company called Bold their minimum planning I believe is 10 pound a month and then you've got the review app which is free so you'll never pay for that. So that works out at 40 pound for that week. I've got Shopify subscription there but obviously we've paid for that in the previous weeks there's no cost there and that brings our total for week four to 500 pounds. Now again, 500 pounds is a lot of money especially if you just start a business but what I've got to be thinking is the profit and the orders or the money we've been getting for the orders in week three it's now starting to come through so it won't be that full 500 pounds coming out of your pocket that will be supplemented by the money that's coming in from weeks one, two and three. Optional columns then again I couldn't think of any optional extras that you'd need at this point so I've just left that blank. Now moving on then so here are the totals. Again, keep this in the back of your mind this they're both big numbers and probably a lot higher than you've seen other people mention. The common answer for starting an adoption business is probably 100 to 200 pounds and these are a lot higher but what we've got to be thinking is our business is doing really well at this point so if we're spending nearly 300 pound a week on ads then that's got to be producing if we're working against a 30, 30, 30 year old that's got to be producing about a thousand pound a week in revenue. So just on fixed costs then we're looking at 970 pounds. Now again, this isn't all coming out of your pocket because that's going to be funded by the payments that Shopify are paying us for the orders as they come through and then if you want to go if you've got that extra money to spend and you choose to go for the optional extras not paying for a professional theme or getting a personal logo designed and getting the additional apps then you're looking at just over 1100 pound for the first month or the first four weeks. Now, that's my take on it. It might not be what you expected it might sound a lot more than you realized but as I said at the beginning this is quite an aggressive cost in if anything I've over budgeted here the last thing I would want you guys to do is go ahead and start your business and run out of money in weeks three and four. So and again, it's all variable if you choose to stick to five pounds a day then your costing is going to be more like week one and week two every week where your first month will only be three, 400 pound instead of that thousand pound. So that's my take on how much money you need. Let me know your thoughts below if you agree, let me know below if you disagree. How much money do you think you need? Make sure you leave a comment below. I'd love to hear your guys' opinions on this. That's it for this video then guys. Thank you so much for watching. I really appreciate the support the channel's been getting lately. If you did find some value here then please hit that like button it would be much appreciated. I'm going to be trying to record more videos more often. I know I've been a bit all over the shop recently but hopefully this week especially coming into July uploads will be getting more consistent hopefully every day. 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