Setting and managing prices for your products

When you import products from suppliers, the original prices are also imported into your Shopify admin. To profit from selling these products, you need to increase the prices in your Shopify store. You can set product prices manually, or set global pricing rules for automatic markup.

The original price of the products you're dropshipping is known as product cost. This is how much you're paying the supplier when you place an order.

To run a profitable business, you have to determine what the total cost of your products are, then set the mark-ups or margins for them. The profit is the difference between the amount of money the customer paid and the cost of the product (the amount you paid the supplier).

Strategy for pricing your products

Consider the following aspects when pricing your products:

  • The cost of the products that you're selling - Product cost can help you determine how much to charge for a product. For example, if product cost is less than $5.00, depending on the product category and type, you could mark it up 4 or 5 times and sell it for $20.00 - $25.00. This makes a profit up to $20.00, depending on shipping and other costs.

  • Other expenses or business costs, such as marketing expenses, your Shopify subscription, and transaction fees - Reflect on these expenses when setting prices for your products. These are necessary business costs, so it's important your price covers these costs at the very least.

  • Competitor's prices for similar products - Looking at stores that sell similar products can help you determine the average price of the products you're selling, then you can set your prices accordingly.

See Example: Setting prices for a product line for an in-depth example of setting your prices.

Set product prices manually for dropshipping

You can set product prices manually in both Shopify and Oberlo. We recommend you set your product prices in Oberlo before you import products to Shopify. If you've already imported your products to Shopify, then you can set your product prices in Shopify.

Set product prices in Oberlo

When you have added products to your import list, you can set product prices manually in Oberlo.

Steps:

  1. From your Oberlo dashboard, go to Import List.
  2. Next to the product you want to update, click the Variants tab.
  3. Set the prices of the variants:
    • If you want to change each variant's price individually, then change the price for each variant in the Price column.
    • If you want to set the same price for all variants, then click the Change All Prices drop-down menu, click Set New Value, and enter the new price. Then, click Apply.

Your changes are saved automatically.

Set product prices in Shopify

Set product prices manually in Shopify after you've imported your products from Oberlo.

Steps:

  1. From your Shopify admin, go to Products > All products.

  2. Click the name of the product that you want to update.

  3. In the Variants section, enter the price that you're charging for the product for each variant in the Price column, then click Save.

Setting global pricing rules

You can use global pricing rules to set prices for your products in bulk. You can set global pricing rules in the Global Pricing Rules section of your Oberlo settings.

Add a product price rule

You can set the price for all your products by using a product price rule. There are two types of product price rules:

  • Multiplier - multiplies the supplier product cost by the number you specify. For example, a product with supplier product cost of $2.00 with a multiplier of 3 is priced at $6.00 in your Shopify store.

  • Fixed Markup - adds a fixed amount to the supplier product cost. For example, a product with a supplier product cost of $2.00 with a fixed markup of 3 is priced at $5.00 in your Shopify store.

Steps:

  1. From your Oberlo dashboard, go to Settings, then click Global Pricing Rules.
  2. In the Product cost section for your Your product price, select a rule type from the drop-down list.
  3. Add an amount for your product cost rule:
    Global pricing rule product cost
  4. Click Save settings.

A product price rule applies only to products added after you created the rule. If you want to apply the rule to products in your import list or that you already have in your store, then click Apply pricing rule to existing products.

Add a product compared at price rule

You can set a product compared at price to simulate product sales in your Shopify store. For example, if your supplier cost is $10.00 and you add a product cost multiplier of 3, then this product is listed at $30. If you set your product compared at price multiplier to 6, then the product appears in your Shopify store with a cost reduction from $60.

Product compared at price rule

The set Your product compared at price value has to be greater than the Your product price setting value.

Use compare-at prices only temporarily so that your customers can see when your products are on sale. For example, let's suppose that you want a holiday sale where everything in your store is 20% off. Your current product price markup is 3. You can set your compared at price rule to be 3 to show what the price used to be, and then set your new product markup rule to be 20% lower, at 2.4. After the sale is over, you can remove the compare-at price and set the product price markup back at 3.

Steps:

  1. From your Oberlo dashboard, go to Settings, then click Global Pricing Rules.
  2. Enable Set your compared at pricing rules by clicking the toggle button.
  3. In the Product cost section for your Your product compared at price, select a rule type from the drop-down list.
  4. Enter an amount for your compared at price cost rule, then click Save settings.

Global pricing rule compare price

A product price rule applies only to products added after you created the rule. If you want to apply the rule to products in your import list or that you already have in your store, then click Apply pricing rule to existing products.

Advanced pricing rules

You can use advanced pricing rules to set the product prices for different supplier cost ranges. You can use this rule set if you have several different products with different supplier costs.

Steps:

  1. From your Oberlo dashboard, go to Settings, then click Global Pricing Rules.
  2. Enable Advanced pricing rules.
  3. Enter a cost range, then click Save settings.
  1. In the Markup section, select a rule type from the drop-down list.
  2. Enter an amount for your markup.
  3. Optional: Enable Compared at price markup to set a simulated sales price.
  1. Click Save settings.

A product price rule applies only to products added after you created the rule. If you want to apply the rule to products in your import list or that you already have in your store, then click Apply pricing rule to existing products.

Round the prices of your products

You can automatically round your product prices in the Shopify store. For example, you can use this feature if you want all your prices to end in .99.

Rounding only applies to product prices that are set using global pricing rules. If the supplier product costs is $2.00, you have the global pricing rules multiplier set to 3, and you set assign cents to 99, then the product price is set at $6.99 in your Shopify store.

Steps:

  1. From your Oberlo dashboard, go to Settings, then click Global Pricing Rules.
  2. Enable Assign cents.
  3. Enter a cents amount from 0 to 99, then click Save settings.

You can also round the price for your compared at price rules. Compared at price rules simulate a product sale in your Shopify store.

To add price rounding for a compared at price rule:

  1. From your Oberlo dashboard, go to Settings, then click Global Pricing Rules.
  2. Enable Set your compared at pricing rules.
  3. Scroll to Assign cents and enable Assign compared at cents.
  4. Enter a cents amount from 0 to 99, then click Save settings.

Hightlighted

Disable price auto updates

If you have set prices for your products manually, then you need to disable price auto updates to make sure global pricing rules aren't automatically applied to you products.

Steps:

  1. From your Oberlo dashboard, go to My Products.
  2. Next to the product you want to update, click the Action drop-down menu.
  3. Enable Prevent product price from auto-updating.

To disable auto updates for all products:

  1. From your Oberlo dashboard, click Settings, then scroll to the Auto updates section.
  2. In the When the cost changes section, click Do Nothing, then click Save Settings.

Currency settings

If your store's currency is supported by Oberlo, then Oberlo shows product prices in both your store's currency and in USD on the Import List, My products, and Notifications pages. If your store's currency is not supported, then Oberlo shows the product price in USD only. Product prices can be shown in the following currencies:

  • Bahamian dollar - BSD
  • Canadian dollar - CAD
  • Danish krone - DKK
  • Egyptian pound - EGP
  • Euro - EUR
  • Gibraltar pound - GIP
  • Japanese yen - JPY
  • Norwegian krone - NOK
  • Pound Sterling - GBP
  • Renminbi (Chinese yen) - CNY
  • Surinamese dollar - SRD
  • Swedish krona - SEK
  • United States dollar - USD

Oberlo doesn't do any currency conversions during a product import. For example, if a product cost is $10 USD and you have a product cost multiplier of 2, then the product is imported to your store with the value of 20 in your store's currency. If your store's currency is set to EUR, then the price displays as €20 EUR. You can choose which currency your store uses (for example, USD, EUR, CAD, AUD, or JPY) in your Shopify admin.

Change your Shopify currency settings:

  1. Click General.
  2. In the Standards and formats section, use the drop-down menu under Currency to select a new monetary unit:
  1. Click Save.

If you change your currency from USD, then you need to manually change your product prices in your Shopify admin (they aren't changed automatically based on the exchange rate). To do this, you have to calculate the exchange rate, and then change the prices manually from the Products page in your Shopify admin.

If you are using Oberlo Global Pricing Rules, then you might need to adjust the multipliers accordingly so that your prices reflect the exchange rate. For example, if your supplier cost is $20.00 USD and you add a product cost multiplier of 3, then this product is listed at $60.00 USD. If you set your currency in Shopify to EUR, then the exchange rate is not automatically applied to your price. This means that your product is listed as €60.00 EUR instead of $60.00 USD. With a currency conversion rate of $1.00 USD for every €0.85 EUR, you would need to set your multiplier to 0.85 x 3 = 2.55. As a result, if the supplier cost is $20.00 USD and you multiply it by 2.55, then the product price is displayed in your store as €51.00 EUR.

Example: Setting prices for a product line

Tania is a professional drummer who makes video tutorials for beginner drummers. She also wants to test selling drumsticks on her website to see if she can make money from the online traffic her videos bring. She finds three types of drumsticks on Oberlo that are good for beginner drummers. She decides to test her drumstick business for a month.

She has the following information to consider:

  • She plans to sell three types of pairs of drumsticks: hickory, maple, and oak. These cost her $3.50, $4, and $4.50 respectively.
  • She wants a total profit of at least $200 for the month.
  • She expects to sell 50 pairs of drumsticks.
  • Because she is focusing on the beginner drummer market, hickory drumsticks are more popular.
  • She plans to spend $50 on marketing ads and has a marketing app for $5.
  • Her Shopify plan for the month is $29, and she is using the free Starter Oberlo plan.
  • Her supplier provides free shipping.

Breakdown of costs

Tania has costs each month regardless of her sales. She also incurs costs each time she makes a sale.

Her fixed costs for the month are:

  • Shopify subscription - $29
  • Marketing - $50
  • Marketing app - $5

Her total fixed costs each month are $84.

Each time she makes a sale, there is another cost which varies based on the product ordered. Of her 50 orders, Tania expects that 25 will be pairs of hickory drumsticks, 20 will be maple, and 5 will be oak.

Her expected variable costs for the month are:

  • 25 pairs of hickory drumsticks at $3.50 per pair - $87.50
  • 20 pairs of maple drumsticks at $4.00 per pair - $80.00
  • 5 pairs of oak drumsticks at $4.50 per pair - $22.50

This gives her a total of $190 in variable costs.

Combined with $84 in fixed costs, she expects to have a total cost of $274.

Breakdown of profits

Because Tania wants to make $200 this month, and expects a total cost of $274 for the month, she needs to make $474 this month to achieve her goals. Tania is expecting 50 sales, which means she needs to sell her drumsticks at an average of $9.48 to reach her goal of $474.

Tania wants her hickory drumsticks to be the cheapest to be competitive. She wants to sell them for $7. This means that the remaining $2.48 per drumstick needs to be added to the maple and oak drumsticks.

If she sells her hickory drumsticks at $7 and sells 25 of them, then she makes $175 of her $474 goal and needs only $299 more. To make $299 from the remaining 25 orders, the maple and oak drumsticks need to be priced at $11.96.

Marketing considerations

Part of Tania's marketing campaign is to offer her hickory drumsticks at $5 to the first 5 people who purchase them. Based on her current pricing and profits, that would reduce her profit by $10. To still reach her goal, that $10 needs to be recovered in the remaining orders, but she doesn't want to increase the price of the hickory drumsticks.

Tania needs to make an additional $10 on her 25 orders of the remaining drumsticks, leading to an increase of 40 cents per order and a price of $12.36.

Final prices

After everything is taken into consideration, Tania decides to price her products as follows:

  • First 5 hickory drumsticks pairs at $5
  • Remaining 20 hickory drumstick pairs at $7
  • 20 maple drumstick pairs at $12.36
  • 5 oak drumstick pairs at $12.36

Tania knows that all this is based off her own estimates. After the month is over, she will likely need to revisit her prices and see what makes sense for the next month based on her store's sales in the first month.

Accounting for transaction and credit card fees

Transaction and credit card fees are other variable costs that can be taken into consideration. The process to determine what your prices should be if you want to include these fees involves some math.

Generally, businesses increase the price to account for these fees only if specific profits need to be met and most businesses do not include them. However, they are a cost to be aware of if your profit margins are very low.

The formula for determining the price you need if you want to take these fees into consideration is: x - z(x) - b = y.

  • x will be the price that you end up with.
  • z is your combined percentage fees as a decimal, so 2.9% would be written as 0.029.
  • b is your combined fixed amount portion of your fees, so for a rate of 2.9% + 30 cents, you would put .3.
  • y is the initial price that you calculate to cover your costs without transaction fees being accounted for.

For example, suppose that you calculate that a price of $10 will cover your costs and profit expectations. If you have a transaction fee of 2.9% + 30 cents, then your formula would be x - 0.029x - .3 = 10, which solves out to be $10.61.

Steps:

  1. Fill in the variables in your equation: x - 0.029x -.3 = 10
  2. If you have a value for the b variable, then add it to both sides: x - 0.029x -.3 + .3 = 10 + .3
  3. Resolve any addition: x - 0.029x = 10.3
  4. On the left side of the equation, factor out an x from each term: x(1 - 0.029) = 10.3
  5. Resolve the subtraction within the brackets: .971x = 10.3
  6. Divide both sides by what is being multiplied by x: .971x/.971 = 10.3/.971
  7. Resolve the division: x = 10.61

Based on this calculation, you need to charge $10.61 to offset the credit card fees to receive $10 in revenue.

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