The Final Price can be calculated in multiple ways. Our method in DSM Tool comes to give as accurate profit level as possible. The pricing calculation technique is the common pricing technique used for eBay dropshipping. Shopify sellers can learn as well from this pricing method and use it in their store as well.
Final Price - The selling price at the target website (e.g. eBay)
Source Price - The buying price (cost price) at the source website (e.g. Amazon)
Break Even - All the sale related fees (e.g. eBay/Shopify selling fee, Paypal fee, tax if applicable and anything that isn't your profit)
Desired Profit - In different formulas will be counted differently, in DSM it is a % of the source price
The traditional methodology takes the source price, adds the break even percentage calculated from source price and adds the desired profit, again, calculated from the source price.
At DSM we believe that safety is first, therefore we are using a simple mathematical trick to make sure that the break even calculation will be taken from the target price and not from the source price
Let's show an example of a final price calculation to an item with a $10 source price, 20% break even and 20% desired profit
We hope you find this information useful, please contact us for any further question