When I first started, I was very excited because I saw these hats retailing for ~$50 and wholesaling at ~$15. I am getting about one order per day.
The BIG downside is that the shipping cost is borderline ludicrous. On my wholesale hat that is $15, the shipping is around $25. I have tried to bargain with the manufacturer, but to no avail. And the funny thing is that for the more expensive hats that aren't necessarily bigger, the cost increases (hat that costs me $100 would ship for around $100). I could mark up the retail price of the hat but it is a somewhat competitive market so I think higher price tags would hurt sales..
Today I received a $200 order from a customer and after all my shipping costs, I cleared about $20 which seems very unsustainable and not worth my time. Ideally, I would like to bulk order and store in a fulfillment house like Shipwire, but I don't think I am doing enough volume at this point.
I have also tried looking around for other manufacturers, but anyone who is willing to dropship seems to have already marked up the price OR has a big shipping price.
Thoughts? Is this a common pitfall of dropshipping? Where do I go from here? It would be such a great business if I had something like $10 flat rate shipping per product.