How do I work out a dropshipping selling price when the supplier ships straight to the customer?
Enter the supplier's product price as cost, their charge to deliver to your customer as shipping, any fixed per-order fee (app or handling) in fixed fees, and your payment gateway rate as the percentage fee. A product at 38 from the supplier, with shipping of 12, a fee of 1, a 3.5% gateway and a 20% margin, needs a price of 66.67.
Where each number goes
In dropshipping you never touch the product, but you pay for all of it. The difference from normal selling is that most costs arrive on one supplier invoice, which makes them easy to blur together. Separate them before entering:
- Product cost: the item price on the supplier's invoice, converted to your store currency if needed.
- Shipping: what the supplier charges to deliver the order to your customer.
- Fixed fees: the per-order fee of the app or platform linking you to the supplier, plus any handling or custom packing fee.
- Percentage fees: your store's payment gateway and any other commission taken from the selling price.
The calculation
Cost 38, shipping 12, fixed fee 1, gateway 3.5%, margin 20%: price 66.67.
At that price: gateway fees 2.33, total fees 3.33, profit 13.33.
Put these numbers into the Selling-price calculator and you will see the same breakdown under the price, so you can confirm each figure is in the right place.
What stays outside the calculation
This is where many new dropshippers slip. The calculator prices one order from the inputs you give it and, as it states, excludes advertising and returns. In dropshipping, ads are often the biggest line after the product itself, because a new store has no one who knows it yet.
The same inputs with an average ad cost of 15 per order added to fixed fees (now 16): price 86.27.
The gap between 66.67 and 86.27 is the gap between a store that profits on paper and one that profits for real.
Check the supplier before pricing
- Long delivery times can raise cancellations and returns. Estimate their average cost per order and add it to fixed fees.
- If the supplier prices in a foreign currency, use the rate your card actually charged, not the headline rate.
- Watch for supplier price changes: any rise is magnified in your price for the same reason shipping costs are.
After the first month, compare your real profit per order with the plan using the Profit margin calculator.
Common questions
Should I enter the app's monthly subscription?
Not as it is. Divide it by the orders you expect in a month and add the result to fixed fees.
The supplier quotes one price including shipping. What do I do?
Enter it all as cost and leave shipping empty. The result is the same.