If you’ve never heard of drop shipping, then prepare to be impressed – it sounds like every eBay seller’s dream. With drop shipping, you don’t have to keep any stock at all. You simply list auctions for what your drop shipper sells, without actually seeing it yourself.
Each time something sells, you let them know, and they deliver it for you – directly to the customer. They–the dropshipper–charge you a near-wholesale price for the item they delivered, and you charge the customer whatever price you agreed and then you pocket the difference as profit. Sounds good, doesn’t it? It can indeed be good, but, let’s take a look at . . .
The Magic
Just think of the sheer amount of trouble this takes out of eBay selling. You don’t have to find space in your house to keep your stock in, or money to buy it with. You don’t have to take any risk by buying things that might not sell. You don’t have to deal with suppliers. You don’t even have to pack or post the auctions yourself. Wow! Can you imagine how good this would be if you could pull it off?
But, as with all things in life, if it sounds too good to be true…
The Myths
Drop-shippers don’t do deals with just anyone – any drop shipper who says they’ll take orders from unregistered businesses is likely to be a scammer. They might not send out anything at all to your customers, or you might send out very poor quality merchandise that they will then return to you for a refund. This may be true in cases where dropshippers are representing themselves as true wholesalers. Remember, a true wholesaler is required by law to sell only to businesses or individuals possessing proof of a sales tax permit, or a resale tax permit. There are a number of legitimate dropshipping firms who are not true wholesalers but who sell steeply discounted products and dropship them to your customers. Doba.com, shopster.com, and dropshipdesign.com would be examples of these sorts of companies. An example of a consumer electronics wholesaler who dropships at no extra cost would be WYNIT. WYNIT will require proof of sales tax permit and require a fairly detailed application before opening an account. However, it is one of the major, true consumer electronics wholesalers.
Also, beware of companies that claim they will put you in contact with drop shippers for a fee – they are inevitably rip-offs. At the end of the day, the best way to find drop shipping companies is to contact them in the ‘real world’, not by typing ‘drop shipping’ into a search engine. This is excellent advice. Contact manufacturers and distributors to set up dropshipping accounts. However, there are a few legitimate online wholesale directories that can provide you with excellent leads. Salehoo is one example. They requrie a very reasonable one-time lifetime fee. As a side note, Salehoo also has an active forum where members share information.
If you want to make a profit with drop-shippers, be prepared for it to be quite a small one: you’re not going to make sales on eBay at a big mark-up from drop shipping prices. You will also have to accept that you can’t inspect stock before it gets sent out, and some of your descriptions might not be as good as they could be.
You should also be prepared for a few frustrating experiences with your drop shipper, as they might not share the same customer service values as you. The first time you’ll realise that they never sent something to one of your buyers is when you hear about it from the buyer a week later. However, if you establish a personal relationship by setting up an account with the manufacturer of the products you want to sell, you can likely avoid this. Also, legitimate wholesale distributors such as WYNIT and DBL simply don’t have that problem.
If you go into dropship wholesale selling with your eyes open, you can avoid most of the common pitfalls. As a final note, there is money to be made in ecommerce using dropshippers. However, dropshipping is generally not the best strategy for eBay. Generally speaking, the costs of dropshipping plus the costs of eBay negate any profit you are likely to make.
By the way, for more information, these links may be helpful:
fleamarket ebay product sourcing
wholesale products made in the usa
finding a wholesale dropship distributor
finding wholesale products to sell online
buy new products wholesale worldwide
