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For drop shipping percentage of sales that's worth dealing with?

by Xelaetaks
6 replies
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For example if you sell items that are $15-$220 would you have a limit to go with, for what a company is willing to give for items sold such as 15 or 30 percent from sales per item? Are there any guidelines you have to operate a drop ship site?

Asking as someone working on a site. There are 3 companies for the site so far that seem legit and most do around 30% off the regular price for the drop shipper (whiich is in turn 30% profit for the drop shipper aside for fees) and there is a company that is proposing 15% off retail for items sold from tjr, which seems a little low, they have nice products that would look solid on the site but factoring that in along with shipping being able to sometimes cut into cost as it is a system of average shipping weight it might make sense to have a limit on what can be sold when it comes to pricing depending on what percentage off the company is willing to sell for to the drop shipping.

Anyone have ideas on this?

Thanks
#companies #drop #percentage #product #sell #shipping
  • Profile picture of the author OnlineStoreHelp
    My rule of thumb has always been I need at least 30% gross margins to cover expenses. More is better but for high priced items I can accept less. 15% is not a discount, its a commission. After covering shipping costs, merchant fees etc, you have nothing left to pay you for your time. If you can pass actual shipping costs through it might be worthwhile but it is a percentage that would scare me away.
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  • Profile picture of the author Xelaetaks
    Thanks for responding. That's what i was thinking as well after thinking about it a little. 15% is too little with fees and everything factored, the other companies are averaging around 30%, I guess that's what I'll go by for drop shipping.
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  • Profile picture of the author PBScott
    I work in terms of how much money I can make per hour, if someone is willing to give me $5 for something I can get done in 5 minutes, with no risk to me, I am all for it, because that is $60 per hour, and if that is too little for you, then you can hire someone for $10 an hour to do it for you, and do something else with your time.

    How much or how little profit the dropshipper has, I wouldn't concern myself with.
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    • Profile picture of the author Importexport
      Originally Posted by PBScott View Post

      I work in terms of how much money I can make per hour, if someone is willing to give me $5 for something I can get done in 5 minutes, with no risk to me, I am all for it, because that is $60 per hour, and if that is too little for you, then you can hire someone for $10 an hour to do it for you, and do something else with your time.

      How much or how little profit the dropshipper has, I wouldn't concern myself with.
      I agree that return for your labour per hour is a significant factor, although there are other things to take into account.

      For example returns can be troublesome and costly as well as time consuming.

      It makes me feel sorry for people when I see them willing to slave away for low returns, when huge profit margins are available if you make the right choices. If you forget about hot products listed by dropship wholesalers and think outside the square for a while, it is possible to find niche products that have huge profit margins.

      When I was running my importing business for 22 years I would never bother with $60 per hour. Not when there are so many products available to buy direct from manufacturers in China that can return many times more than that.
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  • Profile picture of the author StephanDE
    How about selling spices?

    I can offer you great spanish saffron and the winning margin can be from 30-100%!
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  • Profile picture of the author StephanDE
    How about selling spices?

    I can offer you great spanish saffron and the winning margin can be from 30-100%!
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