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Top 7 Pricing Strategies for Your Dropshipping Store

“How do I find that perfect balance of how to price a product?” “What if I don’t have anyone or anything to compare my product?” “How can I come up with the perfect dropshipping pricing strategy?”

Defining the pricing strategy for your dropship products is not easy.

Yes, of course, you want to charge enough to ensure that you get a decent profit margin. But you don’t want to charge so much that you drive potential customers away.

So “How do I find that perfect balance of how to price a product?” “What if I don’t have anyone or anything to compare my product?” “How can I come up with the perfect dropshipping pricing strategy?”

If you were asking yourself these questions, this article is for you.

Let’s find out together!

What’s the Ideal Profit Margin?

Defining your profit margin means how much you add on top of the product’s price, and this markup can be anywhere from 10 to 50%. Furthermore, most suppliers set their wholesale prices at 40 to 50% less than the retail price.

But in terms of the ideal profit margin, it’s always a delicate balancing. You can charge more to increase your margins, but if you charge too much you’ll lose money because customers will simply go to another online store.

The possible profit margins usually break down as follows:

· Acceptable – 10 to 15%
· Good – 15 to 20%
· Very good – 20 to 30%
· Outstanding – 30 to 50%

In often cases, your dropshipping store will usually be in the 15 to 20% range. This is because the dropshipping business model does not usually have outstanding profit margins; it is most known for its convenience and low risk.

However, you can use certain tools to choose the right niche and identify a segment of the market with higher profit margins.

How To Price Your Products Using These 7 Pricing Models

There is no singular pricing strategy for dropshipping. In fact, there are many different pricing strategies, and they all have a time and a place. The one you choose will determine how you price a product and how you’ll market them to your audience.

Here are some of the most popular eCommerce pricing strategies:

1. Fixed Markup

Fixed Dollar Addition is simple. If you have decided on a set profit margin that you want to apply to all your products. Let’s pretend you want a 20% margin on your stuff. Then you will add $4 to an item that costs you $20. So You will sell it for $24.

With a fixed markup, it’s simple to set up and easy to manage, but your profits will dramatically increase or decrease depending on the retail price of what you’re selling.

2. Tiered Markup

If you’re selling many different types of products, tiered markup is ideal for you.

With this method, you can tweak your markup percentage based on the wholesale cost of the product. Since the key difference is that you do not apply the same markup across the board, you have much more flexibility in how you set your prices.

For example, you may not want a 20% markup on a $400 product because that would jack it up to $80 per unit. That may be too much compared to your competition and what your audience can afford.

On the flip side, you might want a 50% markup on a $10 product to cover your costs. With a tiered markup strategy, you can set the percentage based on the retail price of the product.

3. MSRP (Manufacturer Suggested Retail Price)

If you’re trying to determine how to price your products, sometimes you can reach your ideal profit margin if you use the manufacturer suggested retail price (MSRP). This is basically the easiest and fastest way to price your products since you are basing your decision on a predetermined amount. For online retailers looking to get started quickly, this may be the way to go!

However, the MSRP is not a one-size-fits-all solution. Remember, operating costs and expenses will vary from store to store. So you may have to use a more detailed pricing model that will allow you to hit that ideal profit margin.

4. Competition-Based Pricing

For beginners, an easy way to price a product is to spy on other competitors and see how they are pricing it. There are many different tools out there like Prisync and DSM Tool to help you track competitor pricing.

Usually, if your competitors already have a lot of people buying their products, you can sell the same products for the exact same price or undercut your competition so you can steal some of their sales.

5. Psychological Pricing

This method is about pricing a product to appeal to human psychology. 

The most common example of psychological pricing is setting the price tag at $99 instead of $100, or $9.99 instead of $10. Additionally, overly complex numbers just don’t catch the eye: customers won’t likely hit that “purchase” button if the price tag is something like $17.83. Therefore, it’s best to round up to the nearest 99 cents.

This strategy can be combined with any other pricing method. Experiment with it to see how your target audience reacts.

If you have products that have multiple sizes or price levels, you can also implement the “movie theater strategy” of pricing. It goes like this:

At the movies, you can choose between small, medium, or large popcorn. The prices are:

In this situation, the medium popcorn is a decoy. In most cases, people either purchase the small because of their appetite or they get the large because of the perceived value. 

So what we can learn from the “movie theater strategy” is that you can try to push your audience to upgrade to the more expensive package or product by throwing a decoy at them.

6. Bundle Pricing

This is another oldie but goodie: try using sales promotions like buy two, get one free or buy three, get 50% off the third product. You see this kind of pricing all over grocery stores. That’s because it works! People always love getting a good deal; it makes them feel like the purchase was a sound financial decision and not a mistake.

You can utilize this method in your online store to pad your profit on low-margin items. Adding accessories to larger products is also a great way to bundle your products.

7. Free Plus Shipping

This pricing strategy could work great for low-ticket products. In the free plus shipping strategy, you sell a product for $0.00 and only charge the customer for shipping costs.

In terms of the shipping cost, I recommend not going over $9.99. At that point, people will definitely notice that the shipping costs include the product’s price, and you are trying to trick them by letting them think you’re giving the product to them for free.

This method works best with products you can buy and ship out for less than $3 or $4 because it will be hard to extract all your business expenses otherwise.


The main thing to remember about pricing your dropshipping products is not to dwell on it.

Choose a strategy and roll with it. If it’s not working out, try a different one. Don’t be afraid to alter the pricing strategy. If this isn’t working? Try another one! Test different pricing strategies in your store to find the one that works best for you.

Facebook Group Discussion

14 hours ago

Every time if they fail to deliver the product in time, they reply to the ticket with this message. So unreal. This looks like a message template for excuses.

---The product had arrived in our warehouse on 21, but it failed to pass the quality inspection. Therefore, we have asked for a new one in transit to our warehouse, which will take3 days. We will dispatch your products as soon as they are all stocked. Thanks for your understanding. Have a nice day! Best Regards---
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15 hours ago

𝟑 𝐑𝐞𝐚𝐬𝐨𝐧𝐬 𝐖𝐡𝐲 𝐘𝐨𝐮𝐫 𝐅𝐚𝐜𝐞𝐛𝐨𝐨𝐤 𝐀𝐝𝐬 𝐀𝐫𝐞 𝐍𝐨𝐭 𝐂𝐨𝐧𝐯𝐞𝐫𝐭𝐢𝐧𝐠⁣..

1 - 𝙉𝙤𝙩 𝙜𝙞𝙫𝙞𝙣𝙜 𝙚𝙣𝙤𝙪𝙜𝙝 𝙩𝙞𝙢𝙚⁣

When setting up a Facebook Ads campaign, you should know that your ads often need at least 3 days of running time to progress from the learning phase.⁣

In the learning phase, your ads will often perform poorly. That’s because Facebook’s algorithm is still “testing out the waters” and trying to target different smaller audience groups within your target audience to find out which responds the best to your ad.⁣

So, before thinking that your Facebook ads aren’t converting, leave them running for at least two or three days, and you will likely see an improvement in your campaign’s performance.⁣

Don’t forget that it works the other way around as well. If you leave your ads running for a long time (especially for smaller audiences), ad fatigue will occur, and your Facebook ads will stop converting.⁣

2 - 𝙁𝙖𝙞𝙡𝙞𝙣𝙜 𝙩𝙤 𝙖𝙣𝙖𝙡𝙮𝙯𝙚

Most businesses want to increase their Facebook Ads conversion rate, but with so many variables to consider, I understand that it may be challenging to do so.⁣

Luckily, you can analyze your Facebook ad campaigns to get a clearer picture of what can be improved. The more data that you have, the better your chances of optimizing your ads.⁣

To optimize the conversion of your Facebook ads, these are the most important metrics to look at:⁣

- 𝘾𝙋𝘾 (𝘾𝙤𝙨𝙩 𝙥𝙚𝙧 𝘾𝙡𝙞𝙘𝙠)⁣
- 𝘾𝙏𝙍 (𝘾𝙡𝙞𝙘𝙠-𝙏𝙝𝙧𝙤𝙪𝙜𝙝 𝙍𝙖𝙩𝙚)
- 𝘾𝙋𝙈 (𝘾𝙤𝙨𝙩 𝙥𝙚𝙧 1,000 𝙄𝙢𝙥𝙧𝙚𝙨𝙨𝙞𝙤𝙣𝙨)⁣
- 𝘾𝙤𝙨𝙩 𝙥𝙚𝙧 𝘾𝙤𝙣𝙩𝙚𝙣𝙩 𝙑𝙞𝙚𝙬⁣
- 𝙑𝙞𝙙𝙚𝙤 𝘼𝙫𝙚𝙧𝙖𝙜𝙚 𝙋𝙡𝙖𝙮 𝙏𝙞𝙢𝙚 (𝙞𝙛 𝙖𝙥𝙥𝙡𝙞𝙘𝙖𝙗𝙡𝙚)⁣

If you get to know which of these metrics underperform for your campaign, then it will be much easier to fix the problem that your Facebook ads are not converting!⁣

After advertising on Facebook for some time, you will get a feeling for when a particular metric is under or overperforming.⁣

3 - 𝙉𝙤𝙩 𝙩𝙚𝙨𝙩𝙞𝙣𝙜 𝙚𝙣𝙤𝙪𝙜𝙝⁣

There’s one thing that you should remember when advertising on Facebook:⁣

Test, test, and test!⁣

So, if your Facebook ads are not converting, test out some different images (or videos), ad copy, and headlines.⁣

You will never be able to predict which combination of these factors will convert the best, so the only option left is to test them all out.⁣

Don’t be afraid to test the ad more than once. The more you test, the more you’ll be able to understand what works and what doesn’t.⁣

When testing different ads, remember to try out different marketing angles as well.⁣

I hope this helps you out, if you have any questions leave them in the comment section below and I’d be more than happy to answer in as much detail as possible.

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2 days ago

Hi,I ordered one item from China warehouse to United Kindom.I ordered a week ago but it still processing.I didn't understand.Why you say processing time is 3 days.I don't believe in I can receive it. ... See MoreSee Less

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2 days ago

#CJWarehouses #moment
another working day ☕️☕️☕️
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6 days ago

I am having issues with my CJ agent. She doesn't inform me on important changes on products that I have placed orders, eg out of stock etc. I have to find out by myself when its too late. I am seriously thinking of finding another supplier. Can anyone help? Thanks ... See MoreSee Less

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