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December 19, 2007Ebay sellers are very much familiar with the term “dropshipping”. It is one sourcing option or sales strategy to maximize sales and profitability. In dropshipping, you are selling the product even if you have not actually owned it yet. You publish it and pay for it only until someone buys the item. Then you coordinate with a particular store or “dropshipper” to directly ship the product to your customer. You pay it at wholesale price to the store once the product is brought to the customer. But there is risk involved in this type of transactions. Products may not be immediately available upon order or there might be returns and damages. It is important that before you enter into agreement with a particular dropshipper, the terms and conditions are clear to you and to the “dropshipper” in order to get the service that you expect. Ebay sellers oftentimes use dropshipping method. It is works well when you are selling in volumes. You will gain more profit on this if you made a big transaction.
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Horaayy..there are 2 comment(s) for me so far ;)
I have not had good experiences with drop shipping. One problem is that the seller must rely on the dropshipper to ship the item quickly – I have no control over how fast they will ship the item. This has hurt my business and caused problems with customers. Returns are also a nightmare. I do better finding my own unique items to sell and not relying on a third party to complete the transaction on my behalf.
@Suzanne – thanks for the feedback.
One method around this is to have some of the items on hand. So if the drop shipper doesn’t have the item in stock you can pull it from your own inventory. It’s best to probably have at least one or two (if it’s an item that you plan on selling a lot of) in hand.
There is a fine balance with hands off dropshipping and providing excellent customer service. It’s always best if you can control the process yourself.
You can develop great relationships with dropshippers, but there is that possibility that the product can get sold out. I try to make sure that the drop shipper has multiples of the product I want to sell. And I try to find dropshippers who are reliable.
Dropshipipng isn’t the only product sourcing method, but it’s a great way to get your feet wet and great to have in your arsenal of methods to source products.