Sounds like you're looking to get into drop-shipping - which i did for a while back in 2004. For pricing, what will happen is this:
- You'll get your wholesale pricing, which will be your cost of goods.
- You will most likely get a MAP (Minimum Advertising price) from the Merchant
- You set your pricing based on your profit margin. You are free to set this to whatever you want, although you should not go above MSRP. (Manufacturer's Suggested Retail price)
There's a couple things to be careful with. First, understand and follow the MAP. This is instituted by Manufacturers to ensure that online websites do not cut the margins so low, and advertise these prices, that the retail brick and mortars suffer. This is why on Amazon you sometimes have items that you have to add to your cart to see the pricing - it's because they are selling under the MAP. You can sell under MAP, but you can't advertise those prices on your website - you have to do it like Amazon does and hide until in the cart.
Second, this is a really, really hard area to get into as a small business owner. You may find, as I did, that other websites are selling at 1% to 2% over wholesale pricing, or even lower than your wholesale price because they aren't drop shipping
and have a lower wholesale price than you can get. You have to make sure your Price Margin is enough to cover drop-shipping fees, your own overhead, and still make a profit. Standard rule of thumb is that Retail is approx a 30% profit over wholesale, although some items can retail for about 50% above wholesale. I quickly found I just couldn't compete with these other websites selling so cheaply, and had to bow out gracefully.
I did find, however, that using 5 instead of 9 converted better for me. So $9.95 instead of $9.99. The "use a 7" was a complete bust - i.e. $9.97.
I also found it depended on the item. I drop-shipped musical instruments for a while, and these converted better if the prices were rounded to whole dollars - more of a luxury item. The add ons, like strings and picks, had to stay in the $9.95 category - or people thought it was ridiculous. Interestingly, musical instruments are one of those items that are 50% over wholesale routinely, yet the wholesale and dropship fees coupled with these other website selling so cheaply drove me out of the market.
I'd like to jump in for a second though and offer another option. If you'd like to build a store - perhaps consider building an affiliate store. You can do this for a single merchant like Amazon, or use something like PopShops for a store with products from different merchants.
With drop-shipping, you still have to place the orders from your customers, and you still have to handle a lot of customer service issues. And with purchasing, it's not like you can let an order sit for a day or two because you have a personal emergency
. It's a lot of pressure for a small business owner.
I did love having a store for sure, it really was something I enjoyed - but drop-shipping just wasn't profitable for me. Recently, I'm rediscovering the fun of creating a store using the affiliate store method and Amazon products. Other's have been really successful with affiliate stores built on Pop Shops.
Hope this help, and Good Luck!