Dropship Tips: Set Up a Profit Calculator in Nine Easy Steps

Why is a profit calculator so important for a dropshipping business? Basically, when you don’t have a clear idea of ​​how to stay profitable, it’s only a matter of time before your business falters.

Fortunately, you can easily and effectively change a profit calculator by using a common software program like Excel.

FACT: Automation is vital to reduce the time and energy of the calculation process

Automation is not exclusive to dropshippers and resellers. It is a common trait built into all types of businesses for the same reason: it streamlines business operations and allows a business to run more efficiently.

Those who sell through eBay would likely find it much better if their business reduced the number of manual steps and replaced them with automated steps.

This makes business operations much more streamlined and potentially more profitable.

How It’s Done: The Nine Simple Steps to Setting Up a Profit Calculator in Excel

Here is a very brief detail of what is needed to set up a profit calculator in Excel:

* Decide what you want to sell
* Create an Excel file with all headers needed for calculation
* Provide data for purchase and shipping costs
* Add the eBay cost of an insertion fee
* Set space for eBay price
* Calculate the final listing price
* Calculate PayPal fees
* Add up all costs
* Calculate the profit margin (selling price minus all costs)

Is there a way I can use the Excel formula to change the calculator to work for you?

There are ways an Excel formula could be modified to change a calculator to work a little better for your needs. Some of these steps include:

* Provide an entry section for a “Final Listing Fee” (for eBay sellers) that is based on price changes from the final sale price.
* Calculate and enter a certain fixed shipping rate for certain areas to simplify the calculation process.
* Add a “total cost” section that includes other expenses such as paypal fees, administrative overhead, etc.

Additional areas of concern and why action is needed

Let’s face it: it’s not always possible to get exact shipping figures from suppliers. Often, they won’t know the costs until they actually weigh and mail the items.

This is because they don’t have a shipping calculator that tracks common shipping rates to the postcodes/countries they commonly ship to. Some may provide estimates that may be off and inaccurate, which is of no help to the buyer or seller.

So how can you use a drop shipping provider account to calculate acceptable shipping costs? The best way to do this would be to install a dropshipping calculator and pre-program it with shipping data from around the world.

Rather than be confused by a series of manual steps to provide shipping information to your customers and prospects, it would be better to install the calculator with an account and allow it to manually process requests.

This brings us to the next obvious question: How can you use Excel to make a profit calculator to calculate an acceptable margin to put on direct shipped products?

There are a number of steps associated with this process. They may include:

* Add multiple domestic and foreign addresses to your Excel file so they are present in the data when someone enters shipping information.
* Provide a clear section where someone can add all applicable “ship to” address information.
* Examine the costs associated with shipping based on the information in the calculator.
* Addition of additional marking fees to the cost of the item based on the information in the calculator.

Other areas of consideration

Certain countries or “ship to” locations will have similar or identical shipping costs.

For example, in the European Union, standard shipping rates may be common when shipping from one country to another. The same could be said for shipping from unrelated foreign countries. For example, shipping from the West Coast of the United States to Great Britain could be the same as shipping from the East Coast of the United States.

Other things to consider would be the weight of the item, insurance, tracking tools, and other shipping components that would add to the total cost and potentially reduce profitability. This is not to say that they would automatically reduce earnings.

However, your costs must be calculated in the process to maintain accuracy in profitability.

The action you need to take

If you want to get the most out of your dropshipping business, it would be best to develop an Excel calculator and do some practice calculations.

This will help familiarize you with the process and set the stage for using it as a regular part of your dropshipping business.