The experts at Betonlogos Czech Republic have listed the peculiarities of working with products in different price categories.
Low price category (under $10)
These products generally do not have a high perceived value and need to be sold in large quantities to make a profit. Marketing costs are typically 30% of the retail price. This type of dropshipping business is ideal for those who are just finding out how the business model works and want to try their hand at it.
Cost-based pricing. In this strategy, the price is set based on the cost of the product, to which the desired profit is added.
Advantages:
Based on clear cost data.
Allows for product profitability.
Can be easily implemented.
Disadvantages:
Does not take into account external market factors and perceived value of the product.
May not be in line with the competitive environment if competitors set prices based on other factors.
Dropshipping is a great opportunity to try your hand at business and make a profit while working from home.
How do you determine your profit margin? Firstly, you need to consider all your costs, including the cost of goods, operational costs (e.g. website hosting, marketing, customer service) and any additional costs. Most drop shippers use a profit margin of 20%. This figure can increase over time.
Betonlogos s.r.o. develops marketing strategies for its clients' businesses, conducts: supplier reliability checks, thoroughly researches markets, analyses the competitive environment, identifies potential opportunities, calculates risks.
