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The Down Side Of Using Dropshippers In 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 run out of product 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 within
a comfortable traveling distance. If you run into any supply or
shipping problems, then you could be on hand to visit the
facility, should any shipping or logistic concerns arise.
Fees..Some dropshippers 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 they 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 seller. 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 to sell 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
people!!
Robert C. Potter is a wholesale and retail surplus products
specialist. He is the author of "The Ultimate Guide To Products
For Resale!" Over 300 Wholesale & Surplus Supply Sources For
eBay Auction Sellers, E-Commerce Websites, Flea Market Vendors,
and Retail Store Owners! You can find his 160 page ebook at:
http://www.productsforresale.com.
 MORE RESOURCES updated Thu. February / 09 / 2012
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Treasuries Snap Loss as Greece Fails to Produce Economic PlanBloombergThe Treasury Department is scheduled to auction $16 billion of 30-year bonds today. “Triple A bonds are where we should be invested,” said Hideo Shimomura, who helps oversee the equivalent of $77.8 billion in Tokyo as chief fund investor at Mitsubishi ... |
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Supply shortage, wage hike to make tea costlyEconomic TimesSo the prices of this variety of tea are expected to go up at auctions. It will push up CTC tea retail prices in the domestic market," Arun N. Singh, managing director and chief executive of tea major Goodricke Group, told IANS over phone.and more » |
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LVC Holds 5th Annual Pink GameFOX43.comThe Dutchmen played the game in custom pink jerseys which are up for bid in a special auction to raise funds. Ticket proceeds, raffles and auctions are all ways to collect some cash for the cause. The "Pink Game" is important to everyone in the LVC ...and more » |
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