Pricing is the lever most dropshippers pull last and should pull first. A one-dollar change in retail price is a one-dollar change in what you can pay for a customer, and on most products that's the difference between a campaign that scales and one that bleeds.
Here's a practical method for pricing an AliExpress product, using the same rules Product Score uses when it suggests a retail price.
Rule 1: Start from a markup floor
Begin with a simple floor: retail price ≥ 2.5x × landed cost, where landed cost is the supplier price plus shipping to your customer.
The floor isn't about greed. Paid traffic is expensive, and the gap between cost and price is the only thing that pays for it. A markup below 2.5x usually leaves a break-even CAC too low to survive a test campaign on TikTok or Meta.
Look at a $15 product:
| Retail price | Markup | Contribution before ads | Break-even ROAS |
|---|---|---|---|
| $29.99 | 2.0x | $12.92 | 2.32 |
| $37.50 | 2.5x | $19.99 | 1.88 |
(Both rows assume a 2.9% + $0.30 payment fee and a 3% returns allowance.)
Going from 2x to 2.5x raises contribution by more than half, and drops the ROAS you need to break even from 2.32 to 1.88. That's often the difference between a test that looks dead and one that looks promising.
Rule 2: Check the impulse band
The floor tells you the minimum price. The impulse band tells you where cold-traffic buyers are most comfortable. For most impulse-driven products advertised on social media, we treat $19.99–$39.99 as the sweet spot.
- Below the band, contribution gets too small to pay for a customer. A $5 product sold at $12.99 earns about $6.92 per order, below our US CAC benchmark for every ad channel.
- Inside the band, many buyers will purchase on impulse without researching alternatives.
- Above the band, buyers compare, read reviews and leave to search. You need more trust: better reviews, a stronger site and often retargeting.
At a 2.5x markup, products with a landed cost of roughly $8–$15 fit both rules at once: the markup floor lands them inside the band. Cheaper products can still work, but they need perceived value well above the floor (Rule 3) or a bundle (Rule 4).
Rule 3: Price on perceived value, not cost
The markup floor is a minimum, not a target. Customers don't know or care what the product cost you; they compare your price with what the product seems to be worth.
Questions that raise perceived value:
- What does the problem cost them? A gadget that saves a ruined phone screen is worth more than one that's merely handy.
- What does the alternative cost? If the closest local option is $49, $34.99 feels like a deal.
- Does it look premium on video? Weight, finish and packaging all show up on camera.
Here's the same $8 product at three prices:
| Retail | Contribution | Break-even CAC | Break-even ROAS |
|---|---|---|---|
| $19.99 | $10.51 | $10.51 | 1.90 |
| $24.99 | $15.22 | $15.22 | 1.64 |
| $34.99 | $24.63 | $24.63 | 1.42 |
Moving from $19.99 to $34.99 more than doubles what you can pay for a customer. Whether it converts at $34.99 is a question for a test, but you should know before testing that the higher price gives you that much more room. The break-even CAC and ROAS guide explains how these figures are calculated.
Rule 4: Use offers to raise order value, not to discount
Discounting is the fastest way to destroy the margin you just built. Raise order value instead:
- Multi-packs: "Buy 2, save 15%" on items people use in pairs or as gifts. You ship two units in one parcel, and the shipping cost per unit falls.
- Bundles: pair the product with a cheap accessory that makes it more useful.
- Tiered pricing: show a single unit, a 2-pack and a 3-pack, with the middle one as the obvious best value.
Every extra unit in an order adds contribution without adding ad cost, which raises your effective break-even CAC.
Rule 5: Remember taxes and the market you sell in
A price that works in the US may not work elsewhere:
- UK: VAT is generally charged at checkout on parcels up to £135, so it comes out of your retail price.
- EU (e.g. Germany): VAT applies to all imports; with IOSS you collect it at checkout on orders up to €150.
- Lower-CAC markets often have lower purchasing power, so the retail price may need to drop with the ad cost.
Our CAC benchmarks by market and dropshipping CAC by country cover the differences.
A five-minute pricing workflow
- Work out landed cost (supplier price + the shipping method you'll really use).
- Multiply by 2.5x to get your floor price.
- Check where the floor sits against the $19.99–$39.99 band. If it's above the band, the product needs more trust to sell; if it's far below, consider a bundle.
- Set the price at perceived value, at or above the floor, ending in .99 or .95 if that fits your brand.
- Calculate break-even CAC at that price and compare it with your channel benchmark ($9.50 for TikTok, $14 for Meta in the US).
The dropshipping profit calculator does steps 2 and 5 for you. Product Score also suggests a retail price for every scored product, starting from the 2.5x markup and adjusting to the channel and market you choose, so pricing problems show up before you test.
