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How To Calculate Your Dropshipping Profit

How To Calculate Your Dropshipping Profit

Today, in this resource, we will be looking at:

  • How To Calculate Your Dropshipping Profit
  • What Your Dropshipping Profits Depend On
  • How Much Dropshippers Can Make In 2021

How To Calculate Your Dropshipping Profit

The easiest way to calculate your profits is to discover the difference between your selling price and the price you bought the item.

How To Calculate Your Dropshipping Profit
How To Calculate Your Dropshipping Profit

Additionally, you have to give account of any overhead costs for instance shipping, returns, online store maintenance, etc.

A better idea for a dropshipping store is to stick to low price products with a higher margin potential. Such items normally cost around $1-$20 and could be listed on an online shop for a price of $20-$50 or even more.

The most reputable and successful dropshipping websites have proven to us that the profit margin range is optimal. Speaking from our own experience, we recommend setting a profit margin of 40%-70%.

However, below is the formula that works perfectly well for our dropshipping stores and could potentially work great too for your business:

Dropshipping Income Formula
Dropshipping Income Formula

What Your Dropshipping Profits Depend On

Lets look into the major factors that could influence your earnings from dropshipping business!

Niche Choice:

If you haven’t tried our free dropshipping niche tool integrated in Dropazz by Degenius yet, then it’s time to give it a shot! This instrument shows you whether the niche is a good choice in terms of the number of products available, buyers’ interest, and promotional potential.

If you want to make your first sale happen sooner, by leveraging or selling the hottest and most demanded items only, Dropazz is what you need!

Payment Gateways:

Many a times, people develop interest in the product offers, but, because of the payment system’s inconvenience/unreliability, they tend to leave the store before completing the order.

More so, no matter what payment processing service you are using, be it PayPal, Stripe, etc., you must pay processing fees. And each service has a different fee rate.

For instance, Stripe obliges you to pay 2.9% of each transaction and a $0.30 surcharge.

Intensity Of Marketing Efforts And Advertisement Costs:

This is quite obvious. It does not matter if you’re a marketing expert or you’ve never made a single sale, it also makes no difference if you’ve launched multiple online stores or if you do not understand what a domain name is, as long as you are willing to take your business to the next level, none of this is important.

Dropshipping Profit
Even with little or no marketing knowledge or industrial experience, you could always begin with understanding your target audience and trying easy, free ways to boost your store traffic. They cost you nothing, but they teach you a lot, and learning is essential for your business success.

Once your marketing budget start accepting it, try paid advertising on Google, Facebook, and Instagram. They are, however, the most popular promotional platforms among dropshipping entrepreneurs and they are essential for your business success.

Shipping:

In dropshipping, you have to define how the shipping fee affects your final product price, and your profit directly or indirectly.

How Much Dropshippers Can Make In 2021

Don’t be deceived, Dropshipping puts no limits on your profits. Whatever the income amount is, it’s all yours. Moreover, that is the major factor that makes you highly motivated to keep developing the store, and aim higher.

Never forget, It isn’t important to have any experience in dropshipping or ecommerce. When looking at the profile of the people who decided to go in for dropshipping, you may have noticed that majority of them had no experience in dropshipping.

Nevertheless, let us assure you that using Dropazz solution for dropshipping you can successfully launch a store and make it profitable even without a technical or background knowledge.

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