BandsOffAds
E-Commerce Toolkit

Margins are key in dropshipping! A healthy margin means you can spend more on ads to get a sale profitably. Perceived value also has a big play in as the higher a product is perceived the higher it can be priced at. Here are some examples of a good margin.

Buy for $5 sell for $30 ✅

$25 margin

1.2 BER

6x multiplier

Buy for $10 sell for $40 ✅

$30 margin

1.3 BER

4x multiplier

Buy for $50 sell for $150 ✅

$100 margin

1.4 BER

3x multiplier

If you are a beginner just remember the lower the COG’s the better. Here are some bad margins that you want to stay away from.

Buy for $5 sell for $15 ❌

$5 margin

2.0 BER

3x multiplier 

Buy for $100 sell for $150 ❌

$50 margin

3.0 BER

1.5x multiplier

Although you may have 3x your product cost for the first bad example, you have a small margin of only $10 left. The only way to be profitable in this situation is if people purchase multiple of your product and you have a good backend setup.

In the second example, your product is priced so high your cost per purchase will also be high and you have only had a 1.5x multiplier which in the end means high costs overall and a less likely chance of being profitable without any backend systems in place.

Newbie Tip: The less the BER the better, calculate your BER and see what it is without magic calculator 🙂