What kind of profit margins are there with dropshipping?
A significant part of one's dropshipping profit depends on what kind of products one is planning to sell. It is often a good idea to stick to low price with a high margin potential. Such products usually cost within a $1-$20 price range and these products generally can be priced at $20-$50 or more. The most successful dropshipping websites have proved that such profit margin range is optimal.
It is recommended to have a profit margin of 40%-70%. This following formula was proved to work well for numerous dropshipping projects:
$0<Supplier Price<$2= Your price:$7.95. Minimum profit: $5.95
$2<Supplier Price<$5= Your price:$9.95. Minimum profit: $4.95
$5<Supplier Price<$30= Your price: Supplier price x 2. Profit: 50%
$30<Supplier Price<$50= Your price: Supplier price x 1.75. Profit margin: $22.5 -$37.5
$50<Supplier Price<$100= Your price: Supplier price x 1.5. Profit margin: $25-$50
Supplier Price>$100=Your Price: Supplier Price x 1.35. Profit starts from $35.