Pricing - Dropship Program
Ordering within in our Dropship Program
When you are considering getting into drop shipping, one of the first things you want to know is what price you can buy the products at. Often, the drop ship company will provide you with a price list that will make you salivate because of the huge gap between the price you pay and the "suggested retail price." The only problem is that no one sells at the suggested retail price. If you have received a price list from a drop ship company, go out on the Internet and see if you can find any company selling at suggested retail. Likely, you will find that most of your competition will be well less than suggested retail.
The margin between your price and the suggested retail price means nothing. What matters is the margin between your price and what everyone else is selling those products for. And when you look at that margin, you are very likely going to be disappointed.
The reason this is true is because of intense price competition between small companies that use other companies to drop ship for them. The easiest way to market is just to lower your price, and that is what most companies do. Unfortunately, that strategy just means that everyone ends up making less money.
In our drop ship program, our margins do not appear as high as you might find elsewhere. For most of our products, the drop ship price is 25% less than our sale price. This is true for all of our products with the Vitabase label.
What makes us unique is not the margin that we advertise, but the fact that our margin is a true margin. In other words, our suggested retail price is also the price that our products are actually sold at. If you look online or offline, you will not see our products sold for less than our suggested retail. (Our suggested retail price is also the price that you will see on Vitabase.)
Vitabase is unique in that we carefully monitor pricing issues to ensure that our partners can make money. We do not want our partners to have to settle for only making a few dollars on a large sale. We believe that our pricing strategy is an important part of our business.
A true 35% margin is attractive on the internet whether you are selling your own products or drop shipping, due to low overhead and the potential volume. A 35% true margin while drop shipping is even more attractive, because you will incur virtually no expenses in order fulfillment. Your only expenses will be any advertising you might pay for and perhaps the cost of processing your customer's credit cards.
While we can control the advertised prices of our own product line, we cannot do so for name brand products that are sold online. You certainly do not have to sell any of our products that you do not want to, but we often offer popular products even if the margins are low because there is enormous demand for them. Often volume can overcome low margins on a very hot product.