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Drop Shipping

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NEC 2014 Spring Fair – Wholesale Trade Show

At the NEC 2014 Spring Fair, I got a chance to speak with Louis Wade, one of the members over at the Wholesale Help group on Facebook. We thought we’d meet up and have a chat about what he’s doing at the fair.

Louis was at the fair to meet a few suppliers and look around to find out what’s up and coming in terms of new products. Admittedly, he was taking a peak at what people are gearing up to sell for the 2014 Christmas season so he could look for them in advance while he’s over in China. One good thing about the fair is that it had the potential to put wholesalers in contact with new suppliers for the things they’d like to sell, and the entire ordeal was great for networking, both with suppliers as well as other wholesalers.

If someone is going for the first time and dealing with a big supplier and is planning to start selling wholesale for the first time, Louis has ways for them in terms of being taken seriously. He suggests that you learn the lingo of the business, and to approach those people professionally. Be genuine about your intentions, and the companies will start to open up to you. Business cards for networking purposes could definitely be of use. They might not all remember you, but if you take their card and follow up with them later, they’ll take you seriously. Be professional and articulate, and it should help you out in the long run.

After you’ve built a relationship with these companies and are on good terms with them, it doesn’t hurt to ask if they dropship. Some shy away from it due to some negative connotations, but after you’ve built a connection with them, the worst they could do is turn you down. Some companies do dropship, but they just don’t advertise it. They want to sell wholesale, but they might be willing to work with you.

Be sure to check out the interview below for all of Louis’ great tips!

Filed Under: Drop Shipping, Wholesale Articles

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eBay To Ban Wholesale & Dropshipping Lists

Breaking News!
eBay have just announced that from the 1st September they will be banning the sale of all Wholesale and Dropshipping lists for the auction site.

This news comes as part of a routine clean up that eBay carry out once in a while, the have not stated the reason for this ban but I would guess that this type of material gets more than its fair share of complaints to eBay and so from time to time they remove the worst offenders.
[showmyads]
The issue with Dropshipping and Wholesale lists on eBay is that they are generally sold by people looking for some easy money and they are nothing more than a word document with some website addresses on, quite often they are out dated and some of the links don’t work or the sites no longer exist. There is usually nothing of any value in them and a simple Google seach would generate the same if not better results.

So in my opinion this is a good move by eBay, Wholesale and Dropshipping contacts are a very important part of creating a business online and you need to ask yourself if someone is selling a whole list of contacts for 99p or $2.49 what is the value of the information? The answer is zero!

I have built relationships with wholesale suppliers over years, and finding the right ones that are reliable and profitable takes allot of time and effort, screening the not so good ones, picking out the un reliable ones and looking for suppliers that have quality products means that a good one comes along once in every hundred and can be anywhere in the world.

My own suppliers that I have used to build many eBay and eCommerce businesses were found in the US, Europe, China, the UK and are  a result of years worth of work and if I offer access to them it will not be for 99p or $2.49. All things being equal they should cost thousands as they offer the opportunity to build your own lifestyle business where you can work when you want to, from any country you want to and for as long as you want to. How much is that worth? Well the truth is that you cant put a price on it so we have to be realistic and the main reason I started Wholesale Help 5 years ago was to help people like me to build their new future and get the chance to live how they want to and not how they have to.

So I don’t offer a wholesale list, I dont have 7 pages of  web pages, I have contacts from all over the world that I have worked for over 7 years to build, that I have personally tested and made money from and still do today. If you would like access to this you have to pay more than 99p or $2.49 but maybe not as much as you might think.

If you would like my personal help and my personal contacts to build your online business and create your new lifestyle then take a look at the Gold Membership here.

 

 

Filed Under: Drop Shipping, eBay, Wholesale Articles Tagged With: dropshipping, dropshipping supplier, ebay, wholesale list, wholesale supplier

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Dropshipping is it Worth It?

Drop shipping has become the buzzword on online commerce in recent years and it has attracted many people looking to make a start in online selling. It’s proved very popular as it allows sellers to offer products for sale without buying them first or storing them. You can literally start selling straight away. But is it that easy? And can you make good money from it?

The quick answer is yes and no and yes but as with most things there’s more to it than a simple yes or no so lets look at this in a little more detail.

Dropshipping has it’s good points and bad points, the good points are fairly obvious, there is virtually no start-up costs and it’s very simple to start selling online, essentially anyone with an internet connection can become a Dropshipper in a very short space of time.

It sounds too good to be true and in some ways it is, the chain of command from manufacture through to retail is in place for a reason and it’s always focused on costs and efficiency. Manufacturers don’t usually get involved in retail as it’s not an efficient way of moving their produce. they make things on a large scale to keep the costs down, they sell the products to a wholesaler in large volume, quite often in multiple container loads. Buying in large quantities means the manufacturer has to only deal with a few buyers and gets to move large volumes of stock, in turn for dealing in large quantities the wholesalers get a good price. The Wholesaler will then break down these products into smaller lots maybe pallet loads and store them at their warehouse while they sell the items on in the smaller quantities. He will add on his own margin to cover the cost of the stock, transport, storage and finally profit per lot.

So as the produce gets passed through the line the required order quantity gets smaller and the price gets higher. This is a logical progression. You will never find a source manufacturer selling in small quantities to retailers because they are not interested in such small amounts, they need to move large amounts and regularly to keep the factory process moving they need the space and cannot afford to keep large volumes while they sell of bits and pieces. So each part of the chain specialize in their own section and do that as efficiently as possible to keep costs down and profits up.

For that reason if you find a business willing to sell you items one by one at a ‘wholesale price’ we already know something’s not right here, it goes against the supply sequence. We know a manufacturer wont sell items one by one, they would have to be mad, the costs involved in dealing with the public and the staff required to do so would far outweigh the tiny profits gained from selling a few things here and there. We also know that the wholesaler doesn’t sell items one by one, he has spent possibly hundreds of thousands in buying in the stock from the manufacturer and it’s taking up valuable space in his warehouse, he needs to move the stock quickly and in bulk, usually pallet loads sometimes half pallet loads but as we already know the smaller the amount you ask for the higher the unit price will be so it makes sense to always buy in as larger quantity that your budget will allow.

The the idea of Dropshipping doesn’t quite add up, many will use the phrase ‘wholesale prices’ but if you were to look a little deeper you would find that the dropshipper is in fact a retailer, someone at the end of the supply chain that is used to buying in pallet loads and then selling the items individually to the general public, this is what’s know as retail.

So the retailers are the only ones that can afford to sell items one by one, they are set up for this and that’s how they make their money, so dropshipping has evolved from retailers looking to find other ways to make money and so offering items to third parties to sell, the genius of this is that they use their strengths to their advantage, they are already set up to sell in that way so they offer the same items to the those looking to sell the stock, the only issue is that by the time the retailer gets the stock the price has risen with the transport , handling and profit at each stage so the retailer simply cannot sell an item at a wholesale price as that’s what he has bought it for, they would effectively be selling at a loss, so what you have is a compromise, they sell to you at slightly less then retail and you sell it on at slightly more which is then the retail price, it’s basically splitting the retailers profit margin, but as you can expect it’s always in the retailers favor as they are the ones doing all the work.

So now we understand the process we can conclude that Dropshipping prices are not wholesale, they are simply at bit less then retail, which doesn’t mean it’s a bad idea, but you need to be going into your new business with your eyes open and knowing what to expect. You can’t expect someone else to spend out all the capital, store the stock and deliver it to your customer and still give you a hansom profit, it’s just not realistic there is simply not enough profit left.

This lack of margin has other considerations too, depending on what markets you are selling in it could mean that your competition is far cheaper than you can sell for, if there is another retailer who has bought the same stock from a wholesaler in the normal wholesale quantity then they will have the usual profit margin for that given market sector, which means they can afford to discount the item and still make more money than you and in this online world where quite often price is the only difference between seller and another this can seriously effect your chances of making a success of your business. Of course there are other factors involved in doing business and if you excel at customer service and your website is better than your competitors then you can grind out an edge but you are always on the back foot it they constantly have the upper hand with the prices. lets face it, a buyer might never know how good your customer service is if they have not been first tempted into buying from you by the price of the item.

So chose your market carefully, take time to look at each of the items you would like to sell and research the marketplace to see the average selling price, can you compete?  You don’t have to be the cheapest but you do need to be in with a chance, I know from experience that when it comes down to just a few pounds many will choose to pay slightly more because the delivery method might be more convenient or the retailer has their preferred payment method etc, so it’s not all about the bottom line but you need to be at least in with a chance.

So is Dropshipping worth it? Yes, is it,in the right situation it can be a very useful tool in building your online business but it’s not the whole deal.

Don’t be in too much of a rush at the beginning, take enough time to plan your business and make sure you know the full picture before rushing headlong into something only to become disheartened. There can be allot to learn and I’m afraid Dropshipping doesn’t have al the angers but it can be a great way to experience the enjoyment of selling online and also a great way to test out a market to find if there is a demand for a type of product, if you find you are making some regular sales with your dropshipping items then you can always use some of the profits to buy some stock wholesale and thus gain some of the full profit potential.

If you have had success with dropshipping why not share your ideas and tips in the comments below.

 

Filed Under: Drop Shipping, Wholesale Articles

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DropShipping 101

OK, this is just a quick overview for the tons of people asking about DropShipping.

If you would like the full SP you can read my ebook “DropShipping Revealed” which is available for free when you subscribe to the Wholesale Help Newsletter at the top right of this website.

Some Of the questions:

What Is it? – You offer stock for sale, and someone else ships it to your customer when it sells.

Why?  – No money tied up in stock, no storage issues with large amounts of stock, no risk, no hassle, you get to test a market before investing in it.

Is it legal? – Yes!

Would You recommend it?  – Yes, in certain situations it’s a very good idea.

Any drawbacks?  –  Stock is slightly more expensive than buying in the traditional way so less profit but thats the price you pay for the convenience.

Thats the short and sweet version – For the longer version subscribe to the Wholesale Help newsletter at the top of the page.

Filed Under: Drop Shipping Tagged With: drop shipping, dropshipping, wholesale

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