Expected Profit Margin When Dropshipping

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angela123
Posts: 11
Joined: 20 Feb 10
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24 Mar 16 10:06:35 pm
I considered offering dropshipping, can you tell me what is the expected profit margin generally?


Last edited by fudjj on 24 Mar 16 11:13:43 pm, edited 1 time in total.
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fudjj
Posts: 5915
Joined: 27 Jul 07
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24 Mar 16 11:19:53 pm
That's only something you would be able to know. You would have to find a balanced medium between your cost price and what the average market sales price is per product, then your answer would lay somewhere in between.

The fundamental success of a dropship business is providing agents with products that not only have a market, but ones you can supply to them at a price point where it's possible for them to resell for margin. So my suggestion would be to keep your margins as low as possible to encourage agents to take on your products.

The more agents you have selling your products, then the more profit you make on turnover. High sales could then in turn mean you can purchase in larger volume from your distributor and then offer an even better price to encourage your agents to sell even more and then everyone wins. You have a high stock turn over, so your supplier loves you and in turn, your agents are happy because you're supplying them with a money making opportunity.


Mark (fudjj)

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