There’s definitely a theme happening here!
It’s quite strange how ‘questions upon a theme’ seem to land in my inbox depending on the time of year. After a flurry of questions last week concerning high competition on ebay, this week every other question was about drop shipping. Now the issue here is that many people think that drop shipping is the easy way to make money by selling online. But I’m afraid it’s really not as simple as finding a drop shipper, listing one or several of their products on ebay…and expecting it to sell.
Right now, a fair few of you are thinking that by using a drop shipper rather than sourcing, purchasing and dispatching stock yourselves, you’ll save time, you’ll save spending capital upfront and you’ll save a whole load of hassle. Well, there’s absolutely nothing wrong with that and to some extent this is true, however there are pros and cons to the drop shipping strategy so I thought that this week I would dispel another myth! This time concerning drop shipping.
So, now here’s a question for you: Can drop shipping really work?
The truth is that drop shipping can be a good starting point when launching your ebay business because it involves individual items being sent directly from a supplier to your customers on your behalf which does of course immediately give you some advantages:
- You don’t need to store stock.
- You don’t have to pack or post your products yourself.
- You can list as many or as few items as suits you.
- You can test a product before sourcing and purchasing larger quantities of that item at wholesale.
But I must also tell you that if you do decide to take the drop shipping route, your challenge will be to find an efficient, reliable company that you can trust to deal with your orders and who importantly, won’t load extra charges on you for their products and services – particularly if you intend to list those products on ebay.
So you must be very realistic about your profit margins. You simply won’t make a fortune from each item you sell because on the whole, even though you will still be sourcing your products at cheaper than High Street retail prices, the price you’ll pay is only based on a single item each time rather than on bulk quantities plus you will usually encounter administration fees.
My experience of using drop shippers runs over a number of years and although a bit of a challenge, I do believe that it is indeed one viable way of starting or expanding a successful ebay business, although it most definitely shouldn’t be the only product sourcing method you use within your long-term business plan.
The ‘Drop Shipping’ image
From the emails I receive, I am pretty certain that most people who have no previous experience of drop shipping generally have an image in their minds as to what they think they should be looking for when trying to find a reliable drop shipping source.
This image invariably consists of a huge website, packed full of all manner of products in a wide range of niches that one can simply pick and choose from. I know this because it’s exactly what I used to think! And when someone asks me to recommend a ‘good drop shipper’ I’m afraid it’s not quite that simple.
The reason is that in most cases you need to have decided on a niche and a product BEFORE you research drop shippers of your chosen product.
Of course I must also point out there are several reliable ‘all product’ and ‘niche product’ drop shipping sources within the UK and information on these is available on The Source Report Membership site (plus I’ll be adding a new one to the site next week too) and if you really have no clear picture of a niche or product and you want a variety of products to pick and choose from, jumping from niche to niche, then these are ok. But that’s all – just ok. I’m certainly not going to stop you from taking this route. If however, you are really serious about drop shipping, you should use other, little known methods to pick the suppliers you wish to work with. This way you will get far better pricing and often a far better service…and far better profits.
So, for now, forget Google
There are plenty of general and niche specific drop shipping companies around and a quick Google search will produce quite a large selection, but as I have said, it’s difficult to know just how many of these are reliable. Plus of course ‘one size doesn’t fit all’.
In fact, a Google search is probably the worst place to start your research if you want to find genuine and reliable companies. Many of these advertisers will just be middlemen who purchase products in large wholesale quantities, add their own mark-up and then flog the products to you at a higher price under the guise of drop shipping!
It’s the easiest thing in the world to search online and purchase a ‘Drop shipping Directory’ or similar from the internet. But unless you know 100% what kind of sources and details you will be getting for your money, then this is not the best way.
So choosing the right drop shipper can be a challenge and the only way you can make the right choice is to ensure you do your proper due diligence. Remember that the perfect drop shipper should offer you wholesale pricing along with reasonable fees for the actual drop ship element. They should also be able to constantly supply your customers with high quality products and most importantly, they should guarantee that your customers will receive efficient delivery of their order. So what do you do?
Go directly to the source!
If you know exactly which product you want to drop ship and you also know that you can sell a certain quantity of that product per month (having tested the saleability first), simply contact the manufacturer of the product and ask them if they will agree to a drop ship arrangement with you. You might be surprised to know that not all manufacturers who drop ship openly advertise the fact that they offer this service.
The manufacturer may be able to offer the product to you at a wholesale price and add the postage, packaging and labour costs on top. The manufacturer will still make a profit on their product and you get a genuine drop ship service and price rather than a shoddy service with inflated costs – something that so often happens when middlemen become involved.
You may find that the manufacturer is already set up for this kind of thing, which is perfect, but unfortunately not every product manufacturer will do this so you may need to search around. I have to say though that this is about the most reliable and the safest way to drop ship products – go directly to the source.
Attend ‘Trade Shows’
Trade Shows take place up and down the country and internationally all year round and are a fantastic venue for discovering new manufacturers and wholesalers.
Importantly, businesses that exhibit at these shows have to go through a proper vetting process by a trade association before they are allowed to attend and exhibit, so you can be sure that you will be dealing with bone-fide businesses. Discuss products and drop shipping face to face and see if you can come to an agreement.
Read ‘Trade Magazines’
Trade magazines are a great source for discovering new suppliers, many of which are those little gems of secret sources that are fully set up for drop ship services but simply don’t advertise it. You can contact any of the advertisers featured and discuss your requirements with them over the telephone or arrange to meet in person.
These three methods are by far the best routes to take if you want to try drop shipping as one of your sourcing strategies particularly if you have a specific product in mind.
The drop shipping route is not a ‘quick fix’ I’m afraid, and I must point out that finding and qualifying genuine drop shippers is something that requires patience and effort. By researching properly and finding the right drop ship partner, you will be able to sell your products online at prices that actually allow you to make a profit. So, by all means take this route but please make sure you combine this with buying at wholesale and dispatching your own products too.