There are three parties involved when you run a dropshipping business with Oberlo: you (e-shop owner), the customer and the supplier. The model below will help you to understand how the money flows and how to calculate your profit.
Collecting Payments From Customers
Before launching your store, you will have to enable one (or several) payment providers in Shopify admin to be able to collect payment from your customers. You can find available payment gateways by country here.
Information about the main payment providers in the Shopify Help Center will help you understand the setup, requirements, and any other information.
Paying to Suppliers For Products
After you receive an order from your customer, you will have to purchase the products from the supplier through Oberlo > Orders page.
To do that, simply click on the orange "Order Product" button and proceed with the ordering process.
PROFIT = MONEY RECEIVED FROM CUSTOMERS - MONEY PAID TO SUPPLIERS
It is important to note that you will also have other expenses, which will reduce your profit. Additional expenses include:
-Shopify subscription plan fee
-Oberlo subscription plan fee if you decide to upgrade to Basic or Pro subscription plan.
-Shopify store custom domain (optional)
-Other applications from Shopify App Store (optional)
Keep in mind that depending on the payment gateway you choose, it may take several days before the customer payment is credited to your account. Therefore, it is recommended to have a small reserve of funds in your account to be able to pay the suppliers for the products.