drop shipping profit margin

arielariel subscriber Posts: 1
edited January 2009 in Business Planning
I`m looking for advice about building a relationship with a drop-shipping based website.
I have a retail and wholesale business (products related to breastfeeding - bras, pads, pillows, pumps, etc.) already and was approached by a company that has websites that market related products and would like to add my line.
They asked me to give them a price quote for my products and I`m lost!
What percentage of the consumer`s price should I be charging them?
Ariel
 
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Comments

  • fsoxrockfsoxrock subscriber Posts: 0


    Ariel, You should consider adding 15-20% to the wholesale price of your product for the drop-ship program.  This is an approximation of the costs that would be incurred if they were to buy directly from you and have to warehouse the inventory. Chris is right, it would be very beneficial to ask the other vendors how they calculate their drop-ship prices.  Hope this helps. Good luck with your business!

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  • WebJunkyWebJunky subscriber Posts: 8 Member
    take a look at the competition and determine if it is a market where you can profit.  how much profit you want to make is your call. however do keep in mind the competition.  consumers will buy from your partner 1) if the product is cheaper 2) if the service is significantly better 3) if your marketing efforts are so good that you are often ranked high in search engine results
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  • infiniqueinfinique subscriber Posts: 0 Member
    Drop shipping margins are anywhere from 7-15%. You might want to consider keeping stock eventually to increase the margin.
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