The Down Side Of Using Dropshippers In The Ebay Auction Arena!

Ok, let me just say right up front that I am not against drop-shipping! I love the concept. If you are dealing with a particular wholesale drop-shipping distributor that is serving your Ebay ambitions well, then hold onto that company with bonds of steel, for truly good drop-shippers are hard to find!

Drop-Shipping sounds like the utopian business model. No up front investment in inventory. You don't have to carry packages to the Post Office, United Parcel, or Fedex. All you have to do is set up your own business, auction, or retail website and advertise the products that the company provides. Once the orders come in, you forward it to the drop-shipper and they send the product directly to your customer.

But, the devil is always in the details. Dropshipping is best suited for a stand alone E-Commerce website, mail order, or catalog advertising venue. If you are considering using a wholesale drop shipper for your Ebay auction, then you might want to take a step back and let me provide you with some "points to ponder."

Back ordered products..The reality is that drop-shipping companies run out of product and will be back ordered. Ebay bidders purchase product in "real time." They are under the impression that the item you auction, is the item they bought, not a product that is subject to shortages.

One or two customers might be understanding about the situation, but most will not. If you happen to run out of product on a regular basis then your negative feedback rating will go through the roof, and your reputation will suffer.

One way to combat shortages is to buy a pallet of product in advance, and have the drop-shipper store it in their warehouse so that you are assured of an ample supply. This method sort of goes against the idea of Drop-Shipping (buying the product in advance) but if you are selling on Ebay, you would be best served by employing this method.

Also, if possible, find a drop-shipper in your area, or within a comfortable traveling distance. If you run into any supply or shipping problems, then you could be on hand to visit the facility, should any shipping or logistic concerns arise.

Fees..Some dropshippers will charge you a sign up, or entry fee of about twenty five to fifty dollars just for the privilege of selling their product. You are also charged a "processing fee" for sending the product to your customer.

The "price for processing" can range anywhere from seven to twenty dollars per item, depending on the type of merchandise you are selling. These expenses, plus Ebay fees, can take a big chunk out of your bottom line. Finding a product that can bring you a profit, as well as offseting these types of expenses, can be a delicate balancing act.

Circumventing your customers..While I do not believe that this is a pervasive practice among drop-shipping companies, anecdotal evidence has suggested that some unscrupulous enterprises can cut you out of the sales loop. They could they easily substitute your return address for their company logo, selling directly to your customers.

Market saturation..One of the largest wholesale drop-shippers in the county is the B&F System, BNFusa.com. A lot of Ebayer's started selling their products, one in particular, called Giovanni Navarre leather jackets. At first, it was a profitable item. After a while, everyone started selling the same product. Too much of the same supply, creates market saturation, ultimately destroying profit potential for the seller.

The Giovanni Navarre leather jackets are still being sold on Ebay today, but I doubt that they still provide a very profitable return for the seller. Even though B&F carries over 500 products in 14 different categories, they are intimately familiar to the Ebay community. You could probably make a great profit from just about any B&F product if you were to sell them off line, and out of the auction arena.

When a company becomes too well known to the general public it becomes almost impossible to make money from products that have flooded the marketplace. In addition to finding a drop-shipper who is close to home, it might be a good idea to find a DS company that is not well known to the Ebay market, or who's products have not been scattered all over cyberspace.

These days however, it is hard to find drop-shippers that will cater to the smaller seller. Most will find it more profitable to sell in volume than by the piece. The larger wholesale dropshipping distributors are used by retail catalog operations. To get involved with the larger operations, you would have to be doing a tremendous sales volume.

If you still want to pursue drop-shipping as a source of supply for your Ebay auction, then I would suggest that you read other opinions, and become as educated as you can about the drop-shipping company you do business with.

A good and inexpensive start to finding drop-shipping companies is the Drop Shipping News: http://www.drop-shipping-news.com . Remember, when it comes to Ebay auction selling, "own what you sell." Never leave customer service, or your feedback rating in the hands of other people!!

Robert C. Potter is a wholesale and retail surplus products specialist. He is the author of "The Ultimate Guide To Products For Resale!" Over 300 Wholesale & Surplus Supply Sources For Ebay Auction Sellers, E-Commerce Websites, Flea Market Vendors, and Retail Store Owners! You can find his 160 page ebook at: http://www.productsforresale.com.

In The News:

Cardamom arrivals decline at auctions  The Hindu BusinessLine

Learn How To Be A Successful eBay Seller

Anyone can sell anything on eBay. Open an account, list... Read More

From Ebay Zero To Power-Selling Hero: What It Takes

Have you ever wondered what it takes to be "the... Read More

Sell Your Items at Cost and Make a Fortune on eBay!

Like all ebay sellers I wanted to sell all of... Read More

eBay: Dont Believe All the Hype

Three billion dollars (that's billion with a "B") in revenues,... Read More

How To List Your Items On eBay

Listing your items on eBay can be very confusing if... Read More

Online Auctions: 10 Secrets You Should Know Before Bidding At An Online Auction

You may have heard about ebay and other online auctions.You... Read More

Affordable Online Car Auctions

Still hunting for the car of your dreams? Public car... Read More

How To Compete With Amazon.com

If you are selling online,here is the down side of... Read More

Free Auction Templates: How to Set Your Border Color With FOAM

If you have not heard of Foamtemplates.com yet, home of... Read More

Buying Used Dell Laptops, PCs and Servers on eBay - How to be successful

Two years ago I needed a way to refresh more... Read More

How to Win on eBay

I've bought over 100 items on eBay over three years... Read More

Why 95% of All eBay Sellers Fail

eBay is now the 8th most visited site on the... Read More

eBay Consignments: The Giant Opportunity Hiding on eBay (Part I)

More and more, people are becoming aware that they have... Read More

Mail Order: The Original Internet Still Going Strong

While the world continues to go catatonic over the Internet... Read More

8 Collectible Dolls That Sell Well on eBay

From the beginning, eBay's primary growth came from the collectibles... Read More

How To Use A WYSIWYG HTML Editor To Make Stunning Ebay Auction Listings

What kind of browser are you using for online surfing?... Read More

Online Auctions: 5 Ways Your Business Can Benefit From Online Auctions

Online auctions are now the new gold rush on the... Read More

Ten Sure Fire Ways To Lose Bidders

The way some auction sellers approach their auctions, it's clear... Read More

Seven Steps to eBay Selling Success

More and more people try their luck at selling on... Read More

Louis Vuitton -- Avoiding the Ebay Nightmare Fakes

Without a doubt, eBay was one of the cleverest on-line... Read More

Your eBay Username - What Does It Say About You?

Have you tried to register a decent eBay username and... Read More

How To Save Franchise Fees and Set Up Your Own Ebay Drop Off Store

There has been a flood of publicity generated regarding the... Read More

5 Reasons Why Playing Music On Your Auctions Is A Bummer Of An Idea

There are 147 million registered users on eBay, and tens... Read More

Online Auction Sellers - Seize Control Of Your Business!

As the online auction model of business continues to evolve... Read More

10 Tips to Starting a Financially Successful Ebay Business Startting Right Now

Ebay is Perhaps the easiest and fastest way to start... Read More