Drop-Shipping - Pricing a Product

This is the most challenging part of Drop-Shipping. At the moment you select a product for your listing, you directly get the price and shipping cost from the supplier. There are many other costs associated with a product when you list it on a drop-shipping store.

For example:

• eBay insertion fee - eBay charges an insertion fee of $.0.35 each listing that exceeds the free insertion limit.
• eBay Final Value Fee - eBay charges 10% to 12% Final Value Fee from each sale you make
• Paypal Fee - Charges 2.9% or 4.4% for international transactions  and $0.3 transaction fee for every transaction made via Paypal

When deciding a price for a product for dropshipping you should add every related cost before adding your profit. Some drop-shippers add shipping charges to the product price and offer shipping policy as free shipping.

Sellers offer discounts for some events or seasons to increase their sales. If you choose a discounted product with a discounted rate you will get the product cheaper and you will get motivated to sell that product on your dropshipping store.  

I got this experience on the first order I got on my dropshipping store. When I list the product, the seller had given a discount and was selling that product for $42.20. After adding all the associated fees and my profit I have listed it for $55. When I get an order the discount was expired and the price mentioned on the seller website was $59.99. Also, I have done a mistake when calculating the Paypal fee. I'm running the business from outside of the US and the transactions I make therefore categorize as international where the transaction fee should be 4.4% where I have calculated as 2.9%. Total loss of the transaction was about $13.

Therefore you must keep track of the price changes of products with the seller website. 

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