Down Side Of Using Dropshippers For The Ebay Auction Arena!
Ok, let me just say right up front that
I am not against drop-shipping! I love the concept. If you are dealing
with a particular wholesale drop-shipping distributor that is serving
your Ebay ambitions well, then hold onto that company with bonds of
steel--for truly good drop-shippers are hard to find!
Drop-Shipping sounds like the utopian business model. No up front
investment in inventory. You don't have to carry packages to the Post
Office, United Parcel, or Fedex. All you have to do is set up your own
business, auction, or retail website, and advertise the products that
the company provides. Once the orders come in, you forward it to the
drop-shipper and they send the product directly to your customer.
But, the devil is always in the details.
Dropshipping is best suited for a
stand alone E-Commerce website, mail order, or catalog advertising
venue. If you are considering using a wholesale drop shipper for your
Ebay auction, then you might want to take a step back and let me provide
you with some "points to ponder."
Back ordered products..The reality is
that drop-shipping companies don't always keep enough of a particular
of product in stock, and will be back ordered. Ebay bidders purchase
product in "real time." They are under the impression that
the item you auction, is the item they bought, not a product that is
subject to shortages.
One or two customers might be understanding
about the situation, but most will not. If you happen to run out of
product on a regular basis then your negative feedback rating will go
through the roof, and your reputation will suffer.
One way to combat shortages is to buy
a pallet of product in advance, and have the drop-shipper store it in
their warehouse so that you are assured of
an ample supply. This method sort of goes against the idea of Drop-Shipping
(buying the product in advance) but if you are selling on Ebay, you
would be best served by employing this method.
Also, if possible, find a drop-shipper
in your area, or one that is within a comfortable traveling distance.
If you run into any supply shortages or shipping problems, you could
make a personal appearance at the facility,
to address any logistical problems..
Fees..Some drop-shippers will charge you a sign up, or entry fee of
about twenty five to fifty dollars just for the privilege of selling
their product. You are also charged a "processing fee" for
sending the product to your customer.
The "price for processing"
can range anywhere from seven to twenty dollars per item, depending
on the type of merchandise you are selling. These expenses, plus Ebay
fees, can take a big chunk out of your bottom line. Finding a product
that can bring you a profit, as well as offseting these types of expenses,
can be a delicate balancing act.
Circumventing your customers..While I
do not believe that this is a pervasive practice among drop-shipping
companies, anecdotal evidence has suggested that some unscrupulous enterprises
can cut you out of the sales loop. They could easily substitute your
return address for their company logo,
selling directly to your customers.
Market saturation..One of the largest
wholesale drop-shippers in the county is the B&F System, BNFusa.com.
A lot of Ebayer's started selling their products, one in particular,
called Giovanni Navarre leather jackets. At first, it was a profitable
item. After a while, everyone started selling the same product. Too
much of the same supply, creates market saturation, ultimately destroying
profit potential for the seller.
The Giovanni Navarre leather jackets
are still being sold on Ebay today,
but I doubt that they still provide a very profitable return for the
Even though B&F carries over 500 products in 14 different categories,
they are intimately familiar to the Ebay community. You could probably
make a great profit from just about any B&F product if you were
them off line, and out of the auction arena.
When a company becomes too well known
to the general public it becomes almost impossible to make money from
products that have flooded the marketplace. In addition to finding a
drop-shipper who is close to home, it might be a good idea to find a
DS company that is not well known to the Ebay market, or who's products
have not been scattered all over cyberspace.
These days however, it is hard to find
drop-shippers that will cater to the smaller seller. Most will find
it more profitable to sell in volume than by the piece. The larger wholesale
dropshipping distributors are used by retail catalog operations. To
get involved with the larger operations, you would have to be doing
a tremendous sales volume.
If you still want to pursue drop-shipping
as a source of supply for your Ebay auction, then I would suggest that
you read other opinions, and become as educated as you can about the
drop-shipping company you do business with.
A good and inexpensive start to finding
drop-shipping companies is the Drop Shipping News: http://www.drop-shipping-news.com
. Remember, when
it comes to Ebay auction selling, "own what you sell." Never
leave customer service, or your feedback rating in the hands of other
Robert C. Potter is a wholesale and retail
surplus products specialist. He is the
author of "The Ultimate Guide To Products For Resale!" Over
& Surplus Supply Sources For Ebay Auction Sellers, E-Commerce Websites,
Flea Market Vendors, and Retail Store Owners! You can find his 230 page