But when I look at the selling price it is 50 dollars. I am just wondering where that extra cost has come from of almost 31 dollars. I’m thinking I’ve ticked some profit amount or something.
So if someone is able to send me in the right direction I would be very grateful as the end cost is not inline with the competition and I can absolutely afford to have a lower profit margin.
Thanks for the reply. I was hoping someone could just direct me in shopify to where I may of added extra charges by accident or perhaps a formula in the background that adds a profit level that I can change. I don’t have anything on my website as I am testing how things work and that was one of the first things I noted.
To calculate the selling price for your drop shipping product or any other website related to pricing like pricesurvey , you need to consider various factors, including the original cost, shipping fees, taxes, and your desired profit margin. Let’s break down the calculation based on the information you provided:
Original Cost: $7.36 This is the cost you pay to your supplier for the product itself.
Shipping: $8.28 These are the fees associated with shipping the product to the customer. It covers the cost of transportation, packaging, and handling.
Sales Tax: $1.56 (10%) Sales tax is a tax levied on the sale of goods or services. In this case, it amounts to 10% of the selling price.
Import Duties: $1.90 (Australia 5% and 10% GST import tax) Import duties are taxes imposed on goods imported into a country. In this case, it amounts to 5% of the original cost, and an additional 10% GST (Goods and Services Tax) is applied to the total cost.
Based on the information provided, the total cost of the product comes out to be $19.10.
To determine the selling price of $50, there are a few potential factors to consider:
Profit Margin: It seems that you may have included your desired profit margin in the selling price. If you subtract the total cost from the selling price, you get the profit:
Other Expenses: There might be additional expenses not mentioned in your question, such as marketing costs, website fees, transaction fees, or any other overhead costs that you need to cover. These expenses should also be factored into your selling price.
Considering these factors, it’s essential to review your pricing strategy and ensure that it aligns with the competition. If your end cost is significantly higher than that of your competitors, you may need to evaluate your profit margin and consider adjusting it to remain competitive in the market.
It’s important to note that pricing strategies can vary depending on your business goals, target market, competition, and other factors. Conducting market research and understanding your customers’ expectations will help you determine the appropriate pricing strategy for your dropshipping business.