Dropshipping Financial Model Template
Dropshipping is a great business to get into if you’re interested in limiting risk and don’t have tons of money to get started. The opportunity can be quite profitable, especially if you’re skilled in digital marketing. Even though dropshipping can be quite profitable, there are situations where choosing the wrong product or supplier can end up costing the business and reducing margins. This reality is why a sound financial plan is helpful, and it’s the reason we created the dropshipping financial model template.
Poindexter is a simple financial planning tool designed to help you make profitable decisions quickly, so you can get back to the activities that grow the business. There are no confusing equations or figuring out how to put financial statements together. All you need is a basic business plan. Poindexter then automatically generates a complete financial analysis with everything you’ll need to get a loan, raise money from investors, or just understand the financial viability of your plan.
How the Dropshipping Financial Model Template Works
The dropshipping financial model is designed to be used as a starting point for your financial projections. We know each business is unique, so a one-size-fits-all template just won’t do the trick.
Making modifications to the template is simple and takes no time at all. Simply insert some of our pre-built business model “components” and adjust a few assumptions. Before you know it, you’ll have a completely custom financial model that reflects your unique dropshipping business.
To get you started, we’ve included some of the essential revenues, costs, and investments most dropshipping businesses can use as part of their plan. These items will help you get familiarized with how the software works, so you can quickly make any adjustments you’ll need.
The example revenue streams provided are calculated based on two different methods. The first method is based on a simple forecast for the number of products the business expects to sell each month. Each product is forecasted separately, making it easier to update the sales assumptions on a per-product basis. The second example is based on a forecast for the general number of customers the business expects each month. It is then assumed that a percentage of these customers will purchase specific products. When using customers as the basis for calculating sales, we can forecast the number of repeat purchases. The two methods can be identified by (# of Units) and (per Customer) in the name for each forecast.
There are two types of costs relevant to any business: fixed and variable. The dropshipping financial model contains examples for both types. Fixed costs tend to be easier to handle, as they are usually similar monthly charges like rent, advertising, and utilities. Variable costs are where you need to pay extra close attention because they directly impact profitability at scale. The dropshipping template provides examples of variable costs associated with the costs of products sold to customers. Each variable cost is broken out separately by product so that you can adjust the profit margins on a per-product basis.
The great thing about getting started with dropshipping is that it doesn’t require expensive equipment. However, as the business grows, the need to purchase various assets increases. These assets can be smaller than a computer or larger than a delivery truck. Typically, asset purchases are an area that trips up many new to creating financial projections. Luckily, with Poindexter, these struggles are a thing of the past, and we’ve included an example purchase for a new computer just to show you how easy it is.
Full Pro Forma Financial Statements for Your Dropshipping Business
As you go about adjusting assumptions and inserting new business model components, Poindexter is hard at work in the background, automatically creating a complete financial analysis. You’ll receive all of the financial documentation needed to take your business to the next level. Here are some of the financial results you can expect:
- Pro Forma Income Statement (P&L)
- Pro Forma Balance Sheet
- Pro Forma Cash Flow Statement
- Financial Summary Dashboard
- Funding Requirements Analysis
- Charts, Graphs & more!
Once you’re ready, sharing your financial plan with others is a breeze. Whether you want to invite collaborators to work alongside you or just want to send a read-only link without editing access Poindexter has you covered. You can also download everything to Excel for presentations or to run additional analyses. It’s free to sign up, so there’s no risk involved. Try Poindexter out today!