8 replies
  • ECOMMERCE
  • |
Hello

I'm starting a dropship business, and i'm going to sell consumer electronics. I have contacted some wholesale suppliers who are willing to do dropship. But I need some guidance with price markup. I understand that margins on consumer electronics will be very small, and since i'm starting this for the first time, i understand i have to be very careful with this pricing strategy. I went through lots of calculation, like setting up a fixed markup based on cost price (ex: if cost price is $100, i can set a 10% mark up easily) and for some low price items, instead of mark up% i can use a fixed dollar amount (ex: if the item cost around $10, then i can increase it by $3.5 as a fixed amount), but the issue is... lets say i go with a combination of both the above approach...
Assume:
1. I have 100 products in my store
2. some items may be between $10 to $25, some between $25 to 45 and some more than 100... (all price ranges)
3. if my monthly expense is around $300
what should be the mark up for each item, also if i go with this approach, i'm sure not all 100 products are going to be sold every month... so can you help me figure out a way to make at least my monthly expenses...
Thanks
KPK
#dropship #markup
  • Profile picture of the author cluelessseller
    Any help or advice would be very helpful...
    {{ DiscussionBoard.errors[10200829].message }}
  • Profile picture of the author Hunting
    I would go for around 25-35% profit margins from your suppliers anything leas wouldn't be worth it at those prices after you take away shipping, and fees etc
    Signature

    Love the outdoors? Shop for quality binoculars, spotting scopes, telescopes and more at PointBlankScopes.com.

    {{ DiscussionBoard.errors[10202473].message }}
  • Profile picture of the author Jack Gordon
    Instead of pricing according to what you think you need to earn, perhaps you should be doing some market research to see what the market will bear?

    You could charge $100 markup, then you would only have to make 3 sales. But it won't work very well.

    See what others are selling for and price your merchandise competitively or a bit below. Make sure you offer some type of extra value for purchasing through you, or nobody will even take a chance when they can go to Amazon or Newegg.
    {{ DiscussionBoard.errors[10202524].message }}
    • Profile picture of the author cluelessseller
      Hi

      I would like to thank you for the good suggestions, I will try to increase my markup, try to do more research and see if i can come up with some ideas. I will share my ideas too.

      thanks again...
      {{ DiscussionBoard.errors[10202768].message }}
  • You might want to check out Skip McGrath's blog. He dropships successfully on Amazon and eBay. I know he has training materials available, but there are also a variety of free articles he posts that are full of wisdom. May be worth a look? Here's a link to his articles - Free Articles and Information for eBay and Home Internet Sellers

    Good luck,
    Tiana with ecomdash
    {{ DiscussionBoard.errors[10205433].message }}
  • Profile picture of the author akeemceo
    You definitely want to know your cost per item, Ebay and Amazons are good resources to make that happen. If you are going to focus on consumer electronics, margins will not be that high to start, I would say 10-15% mark up 20% at max. Most of these suppliers have minimums, so you might want to start with a good auction site to get the best bang for your buck. Ive been doing this for over 6 year now and would love to help. Let me know respectfully.
    {{ DiscussionBoard.errors[10252960].message }}
  • Profile picture of the author chuff1026
    i dropship on ebay
    and i markup based on competition
    my margins are around 10% but i sell 100k a month
    randomly pricing is the most rediculous thing i have ever heard of in my life
    think rationally
    with informed customers
    you are going to want to price based on competition
    others selling the same item
    even if you have a website
    {{ DiscussionBoard.errors[10257068].message }}

Trending Topics