Welcome to Part 2! Let’s jump straight back in.
So eBay charges a 9.9% fee for a listing that sells, and PayPal charges 2.6% + 0.30 for each transaction. These numbers don’t seem too big at a glance, but when you’re working in the thousands, like with this laptop they do start to add up.
Chinavasion also charges postage, which isn’t actually disclosed to you until after you click checkout. Then staring you in the face is the minimum of $48.60 “Priority Line” (for the laptop at least), and the estimated time is 7-20 days! This also adds a large chunk onto the cost, and if you weren’t expecting it then it is quite likely to push you (possibly further) into debt.
Now, this is the reason it could be “further” into debt because Chinavasion’s prices are so inflated dropshipping with them can be dodgy. The profit you can make can be calculated like so:
- eBay listing price (let’s use Chinavasion’s retail price for this): $1224.83 (P)
- What it cost us to buy: $1103.44 (C)
- Shipping(!): $48.60 (S)
Now for the formulas (warning these will be messy):
- Subtract the eBay fee from the profit: P-(P*0.099) = X
- Subtract the PayPal fee from the current total: X-((X*0.026)+0.3)) = Y
- Finally, Calculate the final profit: Y-(C+S)=Z
To put these formulas into practice I have created a spreadsheet.
Feel free to comment and suggest improvements (and point out errors should there be any).
So dropshipping can turn out to be a very expensive accident, if not treated with ample caution and if you do not research it. Hopefully, my posts have helped you in some way and maybe even saved you from possibly losing a lot of money.
Thanks for reading, and please share this.
P.S. A possible Part 3 is in the making