How to price a product in dropshipping?
Product price is one of your basic decisions as a store owner. The values you set affect almost every aspect of your dropshipping business. If, for example, you ask people to pay a lot for your product or service, they will stop buying from your store if there is a place of the same quality at a reduced price. Order too little and your profit margin drops or customers assume your product is low quality. The right price takes into account all your costs and maximizes your margins while remaining attractive to customers.
Next we will talk about some steps on how to set prices for your products.
Learn about the market
Analyzing the entire sector is necessary, keep an eye on competitors, the promotions that are taking place and under what conditions they are offering
Keep price goals in mind
You need to ask yourself what you want to achieve from your pricing strategy, and how it will help you achieve that goal. For example, if you are launching a product and choose to have a low price in relation to the market, it can help increase your share in the sector, but remembering that nothing that is absurd and that could cause you losses, calculate carefully how far this margin can come.
We also have cases where people are pioneers in launching a product on the market, in this case it is reversed, as you can apply a higher margin, as it will be new to the market and people will be willing to pay.
Analyze your fixed and variable costs
When we talk about cost, many people think about just the value they are seeing from the supplier, and forget to add fees, taxes, traffic fees, extra applications, shipping and other variables. That's why it's a very important task to plan ALL the costs you will incur on X product and then price it.
With this calculation we arrive at the markup, which is nothing more than a marker based on fixed and variable costs, aiming for a good profit margin.
To arrive at a markup value, simply add the cost of the supplier's product + iof cost + Shopify cost (or any other you use) + payment gateway cost and multiply this value by 2.5 (recommended value) and you will obtain the final value of the product.
To make this clearer and more organized, we will provide a pricing spreadsheet so that you can organize your expenses and can better visualize what we are talking about, also having access to how much you can reach while maintaining a healthy margin, and counting on the cats of marketing you will have.
Click here and access the spreadsheet now!
Document all expenses
As stated above, spreadsheets are one of the most important and safest parts for your business to have progress and success, after all, any error in the calculation can cause huge losses to your sales.
Use a safe margin
Following the limits and data that the pricing spreadsheet tells you is very important to avoid risks, as it will show you limits on where lowering or increasing the price can be healthy, so trust the numbers and the process.
Stay tuned
Values are rarely fixed for long. Your costs, customers and competitors may change, so you will have to change your prices to keep up with the market. Keep an eye on what's happening and talk to your customers regularly to ensure your prices remain great.
To conclude, we say and advise you to always keep an eye on changes and set fair prices that do not affect your business, to continue growing and retain customers.
Next we will talk about some steps on how to set prices for your products.
Learn about the market
Analyzing the entire sector is necessary, keep an eye on competitors, the promotions that are taking place and under what conditions they are offering
Keep price goals in mind
You need to ask yourself what you want to achieve from your pricing strategy, and how it will help you achieve that goal. For example, if you are launching a product and choose to have a low price in relation to the market, it can help increase your share in the sector, but remembering that nothing that is absurd and that could cause you losses, calculate carefully how far this margin can come.
We also have cases where people are pioneers in launching a product on the market, in this case it is reversed, as you can apply a higher margin, as it will be new to the market and people will be willing to pay.
Analyze your fixed and variable costs
When we talk about cost, many people think about just the value they are seeing from the supplier, and forget to add fees, taxes, traffic fees, extra applications, shipping and other variables. That's why it's a very important task to plan ALL the costs you will incur on X product and then price it.
With this calculation we arrive at the markup, which is nothing more than a marker based on fixed and variable costs, aiming for a good profit margin.
To arrive at a markup value, simply add the cost of the supplier's product + iof cost + Shopify cost (or any other you use) + payment gateway cost and multiply this value by 2.5 (recommended value) and you will obtain the final value of the product.
To make this clearer and more organized, we will provide a pricing spreadsheet so that you can organize your expenses and can better visualize what we are talking about, also having access to how much you can reach while maintaining a healthy margin, and counting on the cats of marketing you will have.
Click here and access the spreadsheet now!
Document all expenses
As stated above, spreadsheets are one of the most important and safest parts for your business to have progress and success, after all, any error in the calculation can cause huge losses to your sales.
Use a safe margin
Following the limits and data that the pricing spreadsheet tells you is very important to avoid risks, as it will show you limits on where lowering or increasing the price can be healthy, so trust the numbers and the process.
Stay tuned
Values are rarely fixed for long. Your costs, customers and competitors may change, so you will have to change your prices to keep up with the market. Keep an eye on what's happening and talk to your customers regularly to ensure your prices remain great.
To conclude, we say and advise you to always keep an eye on changes and set fair prices that do not affect your business, to continue growing and retain customers.
Updated on: 14/06/2024
Thank you!