Generally, I advise those starting to sell online to avoid dropshipping.
Now I know that this may be devastating news to some of you – especially those who have never sold anything online before, because unfortunately the mindset of a newbie seller is that dropshipping doesn’t require any investment, no dealing with orders, no storage problems and so on.
More worryingly, this mindset also involves the myth there is no effort involved except raising your Mojito to your lips while reclining in a hammock on a tropical beach somewhere, watching the cash pour into the bank account.
I’m afraid I’m just about to shatter your dreams. Dropshipping – on paper at least – does look like a very tempting strategy and so I don’t really blame anyone for thinking that it is the answer to their prayers, particularly if you have no experience and no capital available.
However, in reality, dropshipping has a huge number of disadvantages and I’m going to explain some of them here because I don’t want you to be duped into thinking it’s a great strategy.
You will never, ever, ever, ever get the best price from a dropshipper
A dropshipper just cannot match the price of a big wholesaler – but there is a reason for this. Dropshippers are dealing with single orders and so have higher overheads compared to wholesalers who sell their stock in huge bulk.
The price you pay will be nowhere near a manufacturer’s price either.
Don’t forget that most dropshippers actually sell on eBay themselves too, so basically you’ll be competing against your own supplier!
What happens if your drop shipper suddenly runs out of the product you’re selling?
Stock availability – or the lack of stock can potentially lead to complaints – particularly on eBay with negative feedback spiraling out of control extremely quickly, which could be a disaster for you.
A live XML feed of stock levels is essential when it comes to dropshippers, but sadly very few actually offer this.
I’m a firm believer in making sure something is done right by doing it yourself!
So, next comes order processing and the potential for ‘mispacking’.
Pack and post yourself, at least to start with so that you can be sure that everything is being done as it should be.
If you’re not processing, packing and dispatching orders there may well be occasions when mistakes happen.
Granted, you could make the very same mistake yourself, but the point here is that you are not in control at any time during the order process when you use a dropshipper. This can be a recipe for disaster – and negative feedback.
What about dispatch delays?
Again this is something that will be out of your control if you use a dropshipper.
When you are the one storing your products you can dispatch them really fast. This allows you to give fantastic customer service to your buyers which in turn will result in good positive feedback.
A dropshipper may be slower – and sloppier.
And finally, this is an important point…
If you’re new to eBay, PayPal will hold the money in your account from your sales for up to 21 days or until feedback is left by the customer.
So you’ll need to actually be able to pay your dropshipper in order to get the order dispatched… and this will be very tricky if your account is on hold. Just something to think about!
Those are just five reasons why I would always try and steer you away from dropshipping. You need to stay well away from ‘get rich quick’, ‘I’ll make your dreams come true’ offers from so-called dropshippers.
In fact, I would even go so far as to ask you to get ‘dropshipping’ out of your head entirely…. please. Think ‘fulfilment’ instead.
I know many online sellers who utilize Amazon’s FBA (Fulfilment by Amazon) programme for their fulfilment of orders. Those orders aren’t dispatched in plain packaging, so customers are aware that the order has come from Amazon, but still it can work.
By using an alternative fulfilment agent – and there are plenty of UK based agents to choose from on Google – your orders can be dispatched under plain cover and your invoices will have your logo on, so no one will know that you didn’t dispatch the order yourself.
All this is fine and seems straightforward enough, doesn’t it? Simply don’t go down the dropshipping route if you’re a newbie!
But does this mean if money is a bit tight you simply can’t start an online business because there are no other options?
No, absolutely not. If you literally have no money at all then start building some capital by selling used items from around your home to raise the capital. Don’t forget one man’s junk is another’s treasure! It is the quickest and easiest way to get started on eBay.
As you’ve probably gathered, in general, dropshipping is not something I would recommend – but only because it comes with way too many risks and very few advantages.
I understand some of you may be successful with dropshipping, but I’d guess that you’re either targeting the US market or you have an ecommerce shop rather than only selling on eBay.
Dropshipping, in my opinion, is simply not the thing for a newbie to get fixated on.
Research, source, pack and post yourself – it’s a learning curve, but one that will ultimately benefit you and help you get to know and build your business.