How to Tell If You Are Overspending on Your Drop Shipping Supplier

How to Tell If You Are Overspending on Your Drop Shipping Supplier

Here’s the truth: drop shipping suppliers can be expensive. Not only do you need to pay for the base price of an item, but most will charge for shipping and smack you with hidden fees. With so many cost factors to consider, how do you even tell if you’re actually overspending?

You may be content with your current drop shipping supplier. However, it’s important to ask yourself these six questions to see if you’re overspending.

  1. Are your revenues greater than your costs?
    If you can’t set your profit margins high enough to come out ahead, you’re over spending. You can calculate profit margin by subtracting the costs of good sold from your revenues, and then dividing the sum by your revenue.
  2. Have you compared your drop shipping supplier’s prices to their competitors’?
    Be aware of other drop shippers’ prices for every product type that you wish to sell. While your current drop shipper may have the lowest average prices, competitors could offer specific items at a lower cost.  Learning which products are cheapest and who has the best prices could help you increase your profit margins.
  3. Are you paying for shipping?
    If yes, think again. Quality drop shippers have started offering free shipping and tracking to help you keep your costs low. Lower shipping costs could enable you to reap higher profit margins or offer more competitive pricing.
  4. Do you have to meet a minimum every time you order?
    It’s important to know how your current drop shipper’s product and order requirements compare to their competitors. Having a drop shipper that doesn’t require you to meet a minimum order quantity will enable you to keep your business flexible and let you send products to you customers immediately after they order, no matter the quantity.
  5. Can you afford to offer your customers a special sale or bundle?
    If your drop shipper offers you bulk or bundle discounts or provides you with an attractive profit margin, you might be able to pass those savings on to your customers through sales and bundling, further incentivizing them to purchase.
  6. Are you getting your money’s worth?
    To really get your money’s worth from your drop shipping supplier, you should make sure you are taking advantage of all of the amenities they offer. Find out if you’re getting “the most bang for your buck” by consider the following questions:

    • Is the ordering process straightforward and fast?
    • How long does it take products to reach the consumer?
    • Does your drop shipper deliver items to the customer?
    • Do you have to deal with returns on your own?
    • Are you in charge of customer service, or is your drop shipper there to help

If you’re wary of your current drop shipping supplier after these questions, have no fear, Kin Custom is here! When you Kin Customize a product, shipping is always free, and white label packaging will only cost you $5 per item. We take care of manufacturing and delivery for you, with no minimum order required. To start drop shipping high quality products at a low price, create your free Kin Custom creator studio account today!

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