The Down Side Of Using Dropshippers In The Ebay Auction Arena!
By Robert Potter
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.
Article Source: http://EzineArticles.com/
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