How to estimate the price of your dropshipping product?

Pricing your product is important before you embark on your dropshipping project. This step has a major impact on how your business looks. It's not an easy thing to do. But how do you calculate your dropshipping sales price? Here are a few tips to help you. 

Knowing the break-even point

Before setting your dropshipping price , start by learning more about the break-even point. This is also known as the gross margin. Knowing this margin gives you the opportunity to find out more about the profitability of your business. Indeed, it is thanks to this margin that you will know, from the start of your project, whether it is profitable or unprofitable. 

To be sure of the answer, we suggest that you know how to calculate and anticipate this margin. This profitability will help you determine the exact price of your Dropshipping services or products. To calculate this profitability, you need to take a few criteria into consideration. These include  

• The purchase price from your supplier
• Resale price
• The price of the advertising campaign

To calculate your gross margin, simply follow this formula: 

"Price of your product excluding tax - purchase price of the product from suppliers excluding tax - price of advertising budget = gross margin". 

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The purchase price and the price of the advertising campaign

Please note that this gross margin or break-even point is not enough to help you set the price of your Dropshipping products. As mentioned above, to calculate your dropshipping selling prices, you need to take certain criteria into account. It's important to base your dropshipping price calculation on your supplier's purchase price. Even if your supplier offers you discounts, base your calculation on the initial price. 

There is also the advertising budget which is an important element. To calculate your dropshipping price, think about how much you spend on advertising. If you want to succeed in your business, you need to budget for your communication and advertising. However, to be accurate in calculating your selling price, other criteria must also be taken into account. 

The cost of hosting your site

In addition to the price of the advertising campaign and the price offered by your supplier, it is also essential to think about the cost of hosting your site. It is quite obvious that a dropshipper needs to have an e-commerce site in order to sell his products. In fact, once you have decided to enter the world of dropshipping, the cost of hosting your site should be part of your budget.  

In order to know your margin and to facilitate the pricing of your products, we advise you to include these costs in your calculation. Nowadays, thanks to efficient and effective tools such as Dropizi, it is quite possible to know the exact cost of your online shop creation. These solutions also allow you to create your own website. The cost of this hosting can change the prices in dropshipping.

Other criteria to be taken into account 

The method of payment for your products is also an indirect consideration. You should be aware that once you sell your products, charges are applied to your cash receipts. So think about these holding fees before you set the selling price of your product. As for your bank's various transactions, these are also part of your expenses. 

There are also social security charges which are considered important criteria. As an entrepreneur, you have to declare your income every month. This means that you are obliged to pay social security contributions. When calculating the profitability of your dropshipping or when setting your selling price, try not to forget these charges and taxes. Other charges should be taken into account, such as the rent for your warehouse or office, the cost of your Internet connection or the cost of your electricity. 

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Rely on efficient tools

If you need help in finding the resale price of your product, you can also rely on platforms such as AliExpress, BigBuy or Amazon. If you have decided to use these marketplaces, you should know that they offer systems that allow you to set your resale price according to the supplier's price. 

To calculate AliExpress dropshipping prices, you can try the solutions offered by other platforms such as Dropizi.com. Dropizi.co.uk has a system that could help you find the ideal selling price based on the price offered by your supplier. You can also take a dropshipping price training course with this tool, to help you in your project. 

Conclusion

Minea is also a very powerful software. It is often used by dropshippers to help them promote their projects. If you need advice on how to set the selling price of your product, you can also refer to this tool.