Dropship experiences?
 

I'm currently researching the possibility of setting up my own internet store. Jim Straw (among others) has advocated using wholesalers who dropship as a viable way of starting a mailorder operation without incurring inventory costs. There are plenty of others who advocate using the dropship model for an ecommerce store as well.

Can anyone out their share their experiences (good, bad, or otherwise) using dropshippers? Can this be done profitably or will the profits quickly be gobbled away by dropship fees, online costs, etc...

The dropship model is obviously enticing because of the relatively low startup costs.

Thanks everyone for your comments.

Jack Lunn
Software Developer
www.productiveEsolutions.com

Drop shipping: Pros and Cons...
 

Jack,

Drop shipping *can* be done profitably, and offers a number of advantages:

* It allows a middleman (dealer) to market products without any inventory investment.

* No inventory investment means you can start and operate with very little capital.

* Risk is greatly reduced - and cash flow improved - because you don't pay for products until after your customer pays you for them.

* There is no need to worry about handling, packing, shipping, protecting or maintaining product inventory - all these steps are taken care of by the drop shipper.

* Since no room is needed for storing inventory, a drop shipping business can be operated from a very small space.

* There is no risk of inventory being damaged, stolen, outdated or becoming obsolete while in storage. No insurance coverage is needed to help protect you from such losses.

* You never need to be concerned about being over- or under-stocked, since you only order the exact amount that your customer pays you in advance for.

* The sales potential of a product can be tested with minimal risk and expense.

If a product doesn't sell as well as expected, you can drop it and cut your losses quickly, without being stuck with unsold inventory.

* It can help you conduct inexpensive market research.

As you market drop shipped products to your market, you'll find out which particular products sell well to your market, and which don't. Such knowledge can be used in the creation of your own successful products.

* Drop shipping lets you quickly come up with products to sell, thus helping generate income in your business while you develop or acquire your own products (which is an ideal goal to aim for).

* You can diversify your product line rapidly and
inexpensively.

[The above has been excerpted from my Free "Drop Shipping Dollars" Email Course.]

Because of the lower profit margins involved with drop shipping (and it's online equivalent, an affiliate program) I recommend selling drop shipped items as a sideline to your own products or services that you control. That's usually a better strategy in the long run, anyway.

Best Regards,
Marty Foley


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Re: Everything that Marty said but..
 

...one downside is the potential that the dropshipper doesn't follow through, or has lousy customer service, or in rare cases is just downright dishonest. This can hurt your reputation and can cost you $$$ because it's YOU the customer gets upset at.

However having said all that, it's how I got started in business on the internet years ago and highly recommend it. I continue to have a good relationship with my original dropshippers today.

Ron




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