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JeffLin
Oct 17, 2007, 10:34 PM
Post #2 of 8
(3130 views)
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The main advantage of this model is obvious. You don't have to invest in stock. So you can start up business relatively easy. You don't have to worry that you're left with a garage full of merchandise that won't sell. The extend of your assortment is only limited by the amount of effort your willing to put into it. Furthermore you don't have to spend time and energy on packaging and shipping products to customers.
The Leading B2B Marketplace
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JeffLin
Oct 17, 2007, 10:37 PM
Post #3 of 8
(3128 views)
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One of the main disadvantages comes with using dropshipping on eBay: The winning bidder thinks that the product he bought is an item you have shelved, waiting to be shipped. Not being able to deliver because your dropshipper ran out of stock will make dropshipping backfire on you. Your customer will be dissatisfied and possibly give you a negative feedback. If this happens too often you can kiss your eBay business goodbye.
To prevent this kind of trouble you would have to maintain in close contact with your dropshipper, maybe even have insight in his stock. Or, if you want to be absolutely sure, you would have to buy a pallet of product in advance and have the dropshipper store it in their warehouse. This will obviously eliminate some of the advantages of dropshipping.
Another thing you may want to consider is dropshipping costs. Some dropshipper charge you a sign up fee for the privilege of selling their products and obviously a fee for shipping the product to your customer. The latter will usually be higher than the gross cost charged by a parcel service. You will want to take this in account when you set your (minimum) price and your own shipping costs. Finding a suitable product will take a thorough evaluation of wholesale price, dropshippingcosts, expected sales price and marketing costs.
And then there is market saturation. Like in any business it is vital to distinguish yourself from the competition. This will be harder when dozens of other people are selling the same products, supplied by the same dropshipper. No doubt, you give your product added value with great product support and you may have a rock solid marketing approach, but comparison shopping sites are ruthless. When being presented in a list of different suppliers of the same product you will only stand a chance when you are the cheapest. The same principle applies to eBay. When everybody is trying to sell the same product the profit margin drops. The art of successful dropshipping is finding the products that have good profit potential and that have not yet been overexposed on the internet.
The Leading B2B Marketplace
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JeffLin
Oct 17, 2007, 10:42 PM
Post #4 of 8
(3126 views)
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In conclusion, setting up an internet business using merchandise of dropshippers can be an attractive opportunity. It is however by no means a guarantee for success. You have to choose your products and dropshippers carefully and always be aware of your costs.
Within any big trading websites, such as alibaba, ec21, ecplaza, etc... b2b websites, they had a good big list of legit and verified supplier (most of them from china), BUT they also had huge scammers list, please make sure you are dealing with the right one!!, most of China and Hongkong Supplier accepted WU and Bank Transfer, They were not a scammer, but you might found it a little bit non-comfortable payment method, for memory cards i found Vision International Development Ltd is a good one, and many other list i can't describe on details, as for contribution i will add the list here, most of them came from experienced and some business partners recommended, The Payment Method is not reflect the quality of their products and services.
below is the prefer list from a paypal and credicard payment accepted dropshipping:
3w.globalsources.com
www.buysino.com
and
www.sourcingmap.com
They all most legit and serious company that i've been dealing with. But once again.. please re-check and double check, triple check any company before you deal with them, safe trade... Good Luck!
Jeff
The Leading B2B Marketplace
(This post was edited by JeffLin on Apr 3, 2008, 5:56 AM)
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