becoming more confused with trying to get answers

Full Member
johnrobbie
Posts: 5
Joined: 06 Jan 14
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4 Mar 15 03:41:20 pm
Hey guys
Im looking to become a dropshipper for the first time and am trying to get some answers from a company listed on your directory.
The more questions i ask, the more i become confused.
I asked them about the percentage or fixed amount of profit that i would receive if i sold their products or would their wholesale prices for each product be revealed to me once i register as a dropshipper, Their response was that there is no fixed amount of profit and i choose what amount i want to sell the product at as per my marketing strategy. Excuse my dumbness (Is that a word? Maybe im so dumb i had to ask) but does that mean that they reveal to me a wholesale cost for each item once i register as a dropshipper with their company? Or do i need to choose a cost above the retail price their own website offers in order to make a profit?
Thanks in advance

Site Admin
fudjj
Posts: 5913
Joined: 27 Jul 07
Karma: 
4 Mar 15 10:20:15 pm
Hi Jon,

I think you may well have a misunderstanding of the differences between dropshipping and wholesale. Dropshipping will never provide you with a wholesale price. With dropshipping you are purchasing one item at a time, where as with wholesale, you are buying in volume. Of course buying in volume provides you with a lower unit price, something that dropshipping won't do.

Now in regards to setting margins on products, whether dropshipped or wholesale. This relates to your market place, not to the actual product. For example, if you are selling the product on eBay, the most competitive market in the world, then your margin will be dictated by your competition. For example, if you decide that you are just going to throw 30% margin on an item and you have a competitor selling the exact same at 5% margin, then you can guess who is getting the sales.

If for example you are marketing through your own website with no direct competition, then you have more ability to make more margin (within reason of course and given you have the traffic flow required) So your margins on products always directly relate to the market place you are selling in. If any supplier tells you that you can put X amount of margin on, that can only ever be a recommended figure, and in reality, bare very little or absolutely no relevance at all to where you will actually need to set your margin to be competitive in that market place.


Mark (fudjj)

Community Manager
SaleHoo.com

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Full Member
johnrobbie
Posts: 5
Joined: 06 Jan 14
Karma: 
4 Mar 15 10:47:38 pm
Thanks very much for the clarification Marc, appreciated

Site Admin
fudjj
Posts: 5913
Joined: 27 Jul 07
Karma: 
4 Mar 15 11:34:42 pm
Anytime, we're help to help :)


Mark (fudjj)

Community Manager
SaleHoo.com

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