Deciding the drop shipping prices can be a cumbersome task for any dropshipping seller. The seller often gets confused about whether the price is too high or is if he is losing potential profits by underpricing. But there is a secret formula of how to price your dropshipping products right.

Today, dropshipping business has become quite common and can be defined as a method of retail fulfillment where a store does not keep the products it sells in stocks. Instead, the dropshipping model features purchasing the item from a third party and is shipped directly to the customer. It means that the seller doesn’t have to handle the product directly. Using Apps such as Sell The Trend can help you find thousands of winning products easily and then adding them to your store in 1-click using push to store feature .

But another thing that is common to the contemporary dropshipping business is that pricing is not only focused on covering the costs and providing an adequate profit margin. The pricing of the product is seen as a marketing tool, which means that retailers use and manipulate the prices of their products to drive traffic to their stores. That makes a proper pricing strategy essential to create more sales and more profits.

How to Price Dropshipping Products?

Anyone who has a drop shipping business might feel the pricing of products as an overwhelming task. But believe us it is not that difficult as it seems. While it is essential to have an optimum price point for your products, there are various established pricing strategies for dropshipping business owners. Here is a handy guide on pricing strategies.

Cost-based Pricing Strategy

This strategy is used by most of the conventional sellers. It is one of the best strategy for beginners as it has a simple logic, is easy to implement, and allows you to pre-calculate your profits. The method is straightforward. You need to estimate all the costs associated with your product.

These costs involve shipping cost, supplier price, selling platform fees, marketing cost, shopping cart transaction fees, payment gateway fees, taxes, currency exchange margins, and your profit.

This traditional method is based on a simple logic, but it does not take competition and market conditions into account. Without that, your products can be overpriced or underpriced.

Competition-based Pricing Strategy

This method is basically spying on other dropshipping businesses and adjusting prices accordingly. Now, if you are thinking of setting your prices lower than your competitors, it’s not going to work. You might be avoiding all your potential profits and setting a mindset among your customers that your products are of poor quality. Similarly, you cannot set the price too high.

The trick to this strategy is offering excellent quality products with some good customer support due to which you can easily target an average customer. And in case you believe that your products and services are better than an average store, then increase the price accordingly.

Customer-Based Pricing Strategy

As an owner of a dropshipping business, you need to realize that a business is developed around its customers. So your strategies should be altered according to their behaviors and needs. Customers cannot be left out when deciding the price.

Some people visit websites just to check and compare the prices. Nearly half of the customers look for discounts and coupons, and ¼ look for promotions. With this in mind, you get a fair idea of the customers you are getting.

In case you are selling luxurious products, people do not compare the prices a lot. So most of the people visiting your store are worried about the quality. It means you can improve your customer support and after-sales service and increase the prices accordingly.

In case you are selling hobbyists, people already know the prices. Since customers have a passion for these products, they will know the difference between $40 and $42. So you need to be price-conscious. You can also offer a few coupons to attract your target audience.

For low-end products, people are not much concerned about the quality and service, so they expect a lower price. The customer might not indulge in a lot of market research, and if they feel the price is low, they will buy the product.

Other Strategies 

Psychological Pricing

This traditional method involves creating price tags. Believe us or not, but a $9.99 does way better than a $10. But remember that this strategy works only for mid-range products. Also, it is often said that prices ending in odd numbers work well. You can try that for yourself.

While talking about psychological pricing, having complex prices can damage your sales conversion rate. If there are two price tags – one with $387.25 and another with $388.03, people will go for the second one as it seems much simpler and smaller than the first tag.

FREE Plus Shipping

The word ‘free’ triggers impulsive buyers. In this strategy, you need to promote the product as a giveaway but increase the shipping price to cover your expenses and have a tiny margin. The main motive behind this strategy is to bring new customers. Once you have a new customer on your e-commerce store, you must have a mechanism for cross-selling or converting that customer into a returning customer. Without such a mechanism, this strategy is of no use and won’t work for long.

When using this strategy, remember to come up with a good reason for the promotion so that customers don’t find it a scam and actually take an interest in it.

Cutthroat Pricing

In this strategy, you price your products below the lowest price in the market. If you have sufficient marketing power, then you can promote this as a limited time offer and gradually start increasing the price.

It will help you to enter the market with a new brand that attracts the customers. But here also, you must have a mechanism to retain your first-time customers.

Since now you are well-acquainted with all the pricing strategies, you need to decide for yourself what strategy you want for your dropshipping business. For a successful dropshipping business, you need to play with different strategies and combine multiple approaches to use them to price your products.

Easy Pricing Method

By far the easiest method is letting an app like Sell The Trend do all the hard work for you by setting the optimal price that you should charge for a product.  By going to the included Push To Store page, you will be able to see the best price that any product should be sold for.  This number is based on the mean price that other stores are selling this product from around the world.  Now that’s easy!

Long dropshipping times can be really annoying, especially aliexpress dropshipping time. Most of the new store owners who source their products from aliexpress worry about the long shipping times. You can also get complaints and might have to give refunds for the long shipping time. But dealing with aliexpress dropshipping isn’t very difficult, and you just need to follow certain steps.

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How to Deal With Long Dropshipping Times?

Well, you should not worry too much about the dropshipping time. At least, don’t let it stop you from having a dropshipping business. Many people are making a big deal of the shipping times to that point that they don’t give their business a go. They instantly want to drop out of the dropshipping business at the first perceived obstacle.

Every business comes with certain advantages and disadvantages. Every dropshipping business owner wishes to offer next day delivery, but it is not really possible. The next thing you do is to keep pushing it forward.

There are certain tricks that you can follow to have little to no issues when it comes to dealing with long dropshipping times.

Use E-Packet Shipping

It is a common tendency of people to use free shipping to save some money. Then they get a lot of customer complaints about long shipping time because some orders are taking a month and a half to arrive. Then it all boils down to blaming the whole concept of dropshipping business.

But the truth is that you need to opt for ePacket to ship, which ships the products from China in around two weeks.

Transparency is the Key

It is imperative to be transparent with your customers about the shipping time. Making the customer know beforehand about the long dropshipping time will prevent any possible issues. If you are honest with your customers, most of them won’t really mind a long time.

Customers get pissed off when you don’t mention beforehand about the two week shipping time. They get pissed and often think of being scammed. As the owner of a dropshipping business, it is your responsibility to keep your customers well informed. Also, you must check from time to time if the vendor has shipped the product.

Ways to Let the Customer Know About the Shipping Time

Now, this can also be confusing on how to tell your customers about the shipping time. You can put the shipping time at three places. Firstly, you can mention the shipping time on the FAQ page, which most customers readout. You can state that shipping will take over 2-4 weeks as you ship from global suppliers to get the best deals from them.

The next way to put the shipping time is on the order confirmation page. You can write, “We understand that quick and timely delivery is important for our clients. Please be patient as we normally ship all orders within 72 hours and will take around 2-4 weeks to arrive from shipment”.

The last way to place the shipping time is in the shipping confirmation email as most people read it out carefully and pay attention to details. Most dropshipping business owners don’t prefer putting the shipping time on the product page as it can be a conversion killer.

Respond Quickly to Customer Emails

One of the smartest tricks to keep your customers happy and calm is to reply to their emails as soon as possible. Your reply to customer emails within 24 hours, but ideally, 6-12 hours is pretty decent to avoid any issues.

Quick replies make the customers believe that there is a real person behind the site. Also, it calms them for not being scammed. If you take too long, then it can create a problem for you as many customers would be putting in a chargeback, thinking that they have been scammed.

Also, if something like this happens, then you are risking your merchant account being shut down for poor business practices. All of this can be prevented with quick replies.

To save your time, you can pre-write replies to some of the most common questions asked by customers. Then you just need to make a tweak to the reply and hit the send button. It will help you save a lot of time, and the customer won’t really know about it.

When you increase the scale of your dropshipping business, you must make a wise decision and hire a VA who can take care of the customer service. In general, customer support often gives negative vibes. So you should focus on the growth of your business and let someone else handle customer service.

That’s all for dealing with aliexpress dropshipping. If you follow the above-mentioned tricks, you will save yourself from a lot of customer issues that otherwise might be coming your way. Even after all this, if a customer is not satisfied with the long dropshipping, you can send an email writing, “It is quite unfortunate that you didn’t notice the shipping time while making the purchase. We have displayed the shipping time clearly on our site and in our emails too. Your product is soon reaching you, and we are sure that you will love it, and it will be worth the wait. If you could just be a little more patient, I’d be very grateful. Once your package arrives, let me know, and I will send you a discount coupon for your next purchase. In case you still do not wish to wait further, please check our refunds and return policy”.

If, after this, the customer asks for a refund, follow your standards returns and refund policy. But around 95% of shipping complaints can be solved this way, and the customer will be happy. Just remember to be polite at all times, no matter how upset you or they are. It is important to be professional. With this in mind, deal with your customers and do not worry about long drop shipping time.