drop shipping fees

What % does a small business owner (manufacturer) charge?

[lkmil]

I am an artist with a new, small "cottage industry" business. I have been asked by a mail order/internet company to drop ship my products that will be featured in the catalog. Is there a widely accepted % or fee that I should charge the company for this service. I usually just sell regular wholesale, and I have no experience with this procedure. All of the posts I searched were through the eyes of the retailer, and I just wanted a manufacturer's spin on this practice

[allhandl]

It really depends on your set up and dollar value you are selling. We manufacture products that are large and drop ship via pallets. In those instances we add $20 to every order.

In the situations where we sell parts (low cost / ups) we charge a percentage of the order with a minimum. in our case its 4% with a 6.50 minimum. Incl. freight. So for a $100 order its 6.50. For a $500 order its $420. Works out to be a few dollars in our pocket.

[lkmil]

The price of the handmade pieces the catalog will carry range from $150-200. I was thinking that I would charge 10% over cost, plus shipping. Is this reasonable?

[allhandl]

thats seems reasonable at that price. Just stick with the 10% MARGIN however. meaning divide cost by 90% versus multiplying 1.1.

Thats will at least let you know what you are always working with

[watercrazed]

This is an another retailer view but I have a number of suppliers like you.

Generally there is no charge for dropshipping but the I am sold them at about 40% of the going retail rather than "normal" wholesale of 50%, I have been approached with as low as 15%. I don't consider suppliers that I can not effectively market at the going midrange online price with a 40% margin. I have a number of dropship suppliers and have many customers that order multiple items so I may have to pay 2 or 3 shipping charges and only charge one to my customer. Each dropshipper will be different in this.

A few have large margins and I have a few at 25% of retail.

Like pricing anything figure out your costs, look at your competition, then put your self in your customer's (me) shoes. and price accordingly.

ps. If I am selling a lot of someone's items I will comeback for a better break. So leave your self a little room.