The Value of Drop Shipping: The Calculation
by Stuart Lisonbee
Ahead of we make a decision what your time is worth to you, let’s find out just how much time is saved by employing drop shipping.
As an eBay PowerSeller, I’ve some expertise in both classic packaging and shipping, in addition to making use of drop shipping. To start our calculation, we’ll have a look at how lengthy it took me to run a standard auction. Regardless as to whether you use drop shipping or not, some factors take the identical quantity of time (such as the listing time, time spent preparing an item description, market analysis time, and so forth.). These issues will not impact our calculation, so we’ll ignore them.
1st, the item description. For one of the most part, there won’t be any difference right here. Even so, by making use of drop shipping you’re in a position to work with the supplier image. This can save some time in which you will not must worry about taking pictures, editing images, and uploading them to eBay or a third-party image hosting service. In the case of Doba, members are in fact provided rights to “hot link” for the pictures hosted on our servers. This can save much more time.
I am a bit of a perfectionist. It would take me at least 30 minutes to take and edit several pictures (I virtually constantly use several images in my item descriptions). Let’s say that for anybody else, we’ll conservatively estimate 15 minutes for pictures.
Total time used so far: 15 minutes
Right after listing the auction, we wait until it has ended. After accepting payment and receiving the shipping data, we must package, address, and ship the item.
Packaging time can vary. Some thing small that could fit in an envelope will only take about a minute to package. Some thing bigger may well take several minutes. Add on prime of that the time required to print or write out address labels. Then there is certainly the cost of packaging supplies such as boxes, packing peanuts, packing tape, etc.
Let’s make a conservative assumption of 5 minutes to address and package an item.
Total time used so far: 20 minutes
Occasions on obtaining the item shipped can differ significantly. Should you are making use of the Postal Service, time spent in line can take as much as an hour or a lot more depending on how busy the post office is. Alternatively, most post offices now have self serve counters exactly where you’ll be able to weigh your package, input the dimensions, and spend at a machine that calculates the postage for you.
But you still must drive towards the post office. Let’s assume an typical to-and-from commute time of 30 minutes (this can be about how extended it requires me, becoming about 15 minutes from the post workplace) plus at the very least 10 a lot more minutes spent working with the self serve machine (assuming 1 is cost-free to use right away).
Total time utilized so far: 60 minutes
Now you are completed! It only took an hour. Additionally to time, you can find other related costs. We currently mentioned the packaging supplies. Let’s go to get a conservative typical of $2 per item shipped. Then there’s the fuel required to drive to and from the post workplace. Even when your vehicle gets a 35 miles per gallon, and assuming a round trip of ten miles, you’re still seeking at someplace between a quarter to a third of a gallon is spent (28.5% of a single gallon to become precise).
Exactly where I reside, gas is presently $2.80 per gallon (assuming you do not get premium). My 10 mile trip, assuming optimal mileage, would price $0.80. So we can add $2.80 ($2 for shipping components, $0.80 for gas) onto the price of shipping an item by ourselves. We will not bother acquiring ticky tacky with connected upkeep charges of your car.
Okay, now let’s calculate the total expense so far. We’ve spent 60 minutes of our time. Only it is possible to make a decision what your time is worth to you. Only pay your self minimum wage Then you need to count on a reimbursement of $8.05 out of your sale. Should you are a high-paid consultant that commands $300 per hour, properly, hopefully the item you just sold went for a nice high price.
To calculate what you ought to anticipate, just add $2.80 onto you worth of time per hour. Straightforward, correct
Ill admit, you will find techniques to lessen the time and price involved with performing it oneself. As an example, you may (as I as soon as did) package many items and take them all down to the post office in the exact same time.
Here’s my counter to that speaking from private expertise. In much less time than it requires me to label every single of these packages with all the suitable shipping address, I could just input the addresses into my Doba account. At that point I’m accomplished, and believe me I’m a satisfied camper as a result!
Subsequent, we’ll calculate how much time it requires to perform exactly the same method utilizing a drop shipper like Doba.
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