Why is a profit calculator so important to a dropshipping business?

Basically, when you do not have a clear idea as to how to maintain profitability, it is only a matter of time before your business falters.

Thankfully, you can easily and effectively devise a profit calculator through using a common software program such as excel.

** FACT: Automation is Vital for Cutting Time and Energy Out of the Calculation Process **

Automation is not exclusive to dropshippers and resellers.

It is a common trait integrated into all manner of businesses for the same reason: it streamlines business operations and allows a company to run more efficiently.

Those selling through Ebay would probably find it much better if their business cut down on the number of manual steps and replace them with automated ones.

This makes business operations a lot leaner and, potentially, more profitable.

** How It Is Done: The Nine Simple Steps of Setting Up a Profit Calculator on Excel **

Here is a very brief detailing of what is needed to set up a profit calculator on Excel:

• Decide what it is you wish to sell

• Create an Excel file with all the needed headers for the calculation

• Provide the data for purchasing and shipping costs

• Add in the Ebay cost of an insertion fee

• Set up space for the Ebay Price

• Calculate the final listing price

• Calculate the PayPal fees

• Add up all costs

• Figure out the profit margin (Selling price minus all costs)

** Are there any ways that you could use excel formula to change the calculator so it works for you? **

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

• Provide an input section for a "final listing fee" (for Ebay sellers) that is based on price modifications of the final sale price.

• Workout and input 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 They Need to Be Acted Upon

Let the truth be told: it is not always possible to get exact shipping figures from suppliers.

Often, they will not know the costs until they actually weigh and mail the items.

This is because they do not have shipping calculator in place that will record common shipping fees to zip codes/countries they common ship to.

Some may provide estimates that can be off kilter and inaccurate which does not help the buyer or seller at all.

So, how can you use a dropship supplier account to work out acceptable shipping costs?

The best way to do this would be install a dropshipping calculator and pre-program it with shipping data from around the world.

Rather than muddle with a number of manual steps for providing shipping information to your customers and potential customers, it would be better to install the calculator with an account and allow it to manually process the requests.

This leads us to the next obvious question: How can you use excel to make a profit calculator to work out an acceptable mark up to put onto dropshipped products?

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

• Adding various domestic and foreign addresses to your excel file so they are present in the data when someone types in shipping information.

• Providing a clear section where someone can add all applicable "ship to" address information.

• Examining the costs associated with the shipping based on the information in the calculator.

• Adding additional mark up fees to the cost of the item based on the info in the calculator.

** Other Areas of Consideration **

Certain countries or "ship to" locations will have similar or identical costs of shipping.

For example, in the European Union, standard shipping rates can be common when shipping from one country to another. The same could be said of 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 that need to be taken into consideration would be the weight of the object, insurance, tracking tools, and other shipping components that would increase the overall cost and potentially cut into profitability. This is not to say they would automatically cut down on profits.

However, their costs need to be figured into the process in order to maintain accuracy in profitability.

** The Action You Need to Take **

If you want to get the most out of his/her dropshipping business, it would be best to develop an excel calculator and perform a few practice calculations.

This will aid in getting the hang of the process and setting the stage for using it as a regular portion of one’s dropshipping business.