"Shipping Costs Are Destroying My Profit on eBay!"

if you don't understand this formula then you're always going to price your items incorrectly when you are drop shipping them hey I'm Paul and I'm committed to teaching you the exact strategies I use to create multiple six-figure businesses on eBay and Amazon these are the same methods that changed my life and I'm here to show you how they can change yours as well I get asked this question all the time which tells me that most people don't understand the correct way to price your items when you are drop shipping them and the question that I'm talking about is Paul I can't sell this item because if I sell it all my profit will be eaten up by the shipping cost that my supplier charges me and if that's what you're thinking then you don't understand how to properly price your items and you also don't understand that the shipping cost is usually irrelevant and I want to show you exactly why so let's pretend for a minute that this item you found you've done some product research and you know that this item is selling well maybe you're trying to drop ship on either eBay or Amazon we won't do some product research right now if you do want to learn about product research I have a free mini course that I'll link up down below where I go in-depth on how to do product research but let's just assume that this product right here is good but you see that it is 2998 and Walmart only gives you free shipping on thirty five dollar orders so you might think I take 2998 I mark it up to cover eBay and PayPal fees I get a profit maybe a profit of five bucks but then Walmart charged me $5. 99 for shipping and that eats up the cost or the profit that I just made if that's the way you're thinking about it wrong let me show you the correct way to think about it so this is the formula right here you take the list or the listed price it should be on Walmart so in this case the price is 2998 you add to it the cost of shipping how much is going to cost you to ship the item which in this case it doesn't tell you but all Walmart orders are $5. 99 for the most part so we'll put $5. 99 here plus sales tax if you do end up paying sales tax to Walmart personally I'm tax-exempt and I recommend all people drop shippers to become tax exempt on Walmart so for me this is going to be zero add those three numbers up that equals your cost of goods sold Co GS that's how much it's going to cost you to purchase the item and get it to your customer that number is what you multiply by your markup and the result is the price on ebay so you're not taking just the listed price just the 2998 and multiplying it by your markup you have to add all three of these together and let's give an example so we'll take the 2998 we will add in $5. 99 for shipping again I don't pay sales tax and I recommend most people to become tax exempt so that brings me to 35 97 I would then multiply their 3597 by my markup and that's the price I sell it for on ebay so that way when it sells I know that built into the formula is the $5. 99 for shipping and you can even

just use this website called sales Cal comm /e Bay this makes it even easier if you're not good with calculations so on the left here I'll put in as the Buy It Now price 2990 sorry we'll leave that one blank for now I'll come down to cost is where you put in how much it costs you so item cost is twenty nine ninety eight shipping cost $5. 99 miscellaneous is where I would put in sales tax you could do an average usually about seven percent as an average so whatever seven percent of twenty nine ninety eight is again I'm just going to leave it in a zero now and we can put in here desired amount let's just say we want to know what our break-even is zero so we would have to sell this item for $42 and four cents if we sell it for 42 dollars and four cents then we're just breaking even there and obviously you would mark it up more for your profit let's say you wanted to make a profit of let's say five bucks on this right so then it tells you should set a sale price for forty seven seventy nine okay great but what if look what happens if you took out the shipping cost here then you would only sell it for forty dollars and 91 cents you would go to fulfill the order after paypal fees ebay fees cost of the item and the $5. 99 for shipping you wouldn't have anything left you would have no profit left that's why in the formula you have to include the shipping costs which in this case was $5. 99 so that's a huge mistake that I see people making if you don't understand this formula then you're always going to price your items incorrectly when you are drop shipping them now you might be asking well is there a way to get rid of shipping costs and yes so each step

here listed price shipping cost sales tax there are always ways to reduce those costs so sales tax like I said I've become tax-exempt that's what I teach my students to do as well so this gets zeroed out shipping some websites you can sometimes get free shipping other ways like maybe combine orders into combine items into one order and ship the multiple addresses it's becoming less common but it still exists on some websites that could reduce your shipping to zero or it might just reduce it a little bit but with Walmart you can only ship to one address you are always going to pay shipping if you're just buying one item that's under $35 listed price sometimes you get coupons you get cash back you get discounted gift cards so this number could be reduced as well but for the most part everyone is paying

$5. 99 without a doubt everyone who buys just one of these everyone who drop ships is paying the $5. 99 for shipping so if you're worried about the competition and that they don't have to pay shipping they do everyone who is drop shipping this item from Walmart is paying the $5. 99 for shipping and that's why I said you don't have to worry about the fact that Walmart is charging you shipping now what you might want to do is look around and see if it's available on another website and if that website is selling for the same price or maybe even less or maybe just a little bit more but with free shipping if you can find it there maybe Amazon selling it prime without shipping costs then you obviously can sell it from Amazon instead and you don't have to worry about the shipping costs so understand that formula understand that is not just the listed price it's also the cost to ship it and the sales tax which hopefully be zero for you that equals the cost of goods sold multiply that by your markup and again just use like this calculator for that sales Cal comm /e Bay and you got the price used to sell it for an eBay like I said in the beginning if you do want some information on how to do some product research I will have that linked up down below so completely free to check that out otherwise guys if you got some value out of this make sure to give the video a thumbs up and subscribe to the channel because I'm released content like this all the time helping you guys learn about ebay and amazon drop shipping and other great ways to make money online thanks so much for watching see you next time oh [ __ ]