Drop Shipping for the Socially Uninclined and Wholesale Discount Hounds
What is Drop Shipping? Well, this form of online retailing is when you list an item, on eBay or Amazon for example, without having the product in inventory. You generally work with a wholesaler, advertise their product at retail price, and when a customer purchases the aforementioned item, you order the product. Usually and profitably you purchase the item from a wholesaler at a discounted price. At this point the wholesaler, usually for free, ships the neatly packaged, new and impeccable, item directly to your buyer. You are essentially Walmart, with less less fluorescent lights and better fashion taste. You have no overhead, no risk, and no inventory except virtually. Best of all, you never even have to exhume your old printer from the basement to print postage labels. It sounds illegal but its not, and technically not even unethical. Retail stores do it. You spend the time researching and advertising, surely it is only fair you that you get your cut of the profits. The wholesaler is happy as his sales skyrocket and your customer is happy as they receive a professionally packaged brand new item directly to their door. You are happy as you slowly watch that $100 you had put away for that trip to the casino turn into $1000 virtually in a couple weeks. Jackpot. Even Uncle Sam’s happy as money changes hands in the “Hoover Dam” of economy boosting donations we call taxes. So why the stigma?
Well for starters it sounds rather felonious don’t you think? Drop shipping. Or you may call it Arbitrage, which is just as chilling. Can’t we call it something nice like “Stay At Home Retailing For Moms, Agoriphobic Persons, or Socially Handicapped”? Its a long name but less likely to arouse suspicion on a resume that you excelled as a previous drug mule. (I have aspergers. Thus I am allowed to reference social inabilities. I was the awkward one who didn’t cry at the end of Titanic at 9, and have the social grace of a former biker-gang member turned military coach.) The other reason that it has such stigma is that it seems like trickery. If you can find such good prices online for these products shouldn’t your buyer be aware of, and have the ability to use, these sources too? Well, they do, and they can. Then they would gleefully spend countless hours doing their own research, communicating with a wholesaler and managing to weed through the false advertising in order to buy one product. Nobodies going to do that for just one item. These good deals don’t just fall into your lap, and you as a Wholesaler/Consumer liaison have that duty. That is why you get paid.
Any profession involves work, be it physical, mental or technological. Think of K-mart. Would you become enraged if you discovered they paid only $10 for that tablet you are buying for $150? No, because you have neither the space or the finances to order 4382 of them at a time. (Mild exaggeration.) So imagine yourself as K-mart, without employees, or a fluorescent light filled electricity bill equivalent to the cost of your home. Also you will be much smaller scale. But equally, if not more so, deserving of compensation for your brilliant ideas and hound-like abilities to sniff out a bargain.
But don’t be fooled there are cons to this situation, and you do need a source of capital to start. How much capital you begin with ultimately determines how far in over your head will inevitably get, the first time you get excited at the opportunities that lie ahead. We all do it. I did. I got caught up in the hype of selling amazon gift cards via email on eBay for twice their worth, which is the going rate. Come on, I should have realized the only reason someone pays twice its value for an amazon gift card is for money laundering a hijacked account and cashing it out. Stupid, stupid me.
First I will get into wholesale product suppliers. I’m really not an advocate of Drop Shipping Online Services as, in my humble opinion, they are the key reason we all do that “in over your head” face plant the first time around. You want to start with one item at a time and develop a consumer relationship with one provider at a time, even if that means stalking their product page for a month. When I search the internet for corporate services and whole sale source providers, I often see the same company masquerading under different titles. They all want to sell you solid gold at about 10 cents a gram. Something’s wrong in that scenario, and even I knew that, the one who thought Gift Cards were just hard to find in some areas where they just fly off the shelf and sell out. See I’ve signed up with these companies, and in exception for a few, I found them all to be at least retail priced. Some were even more costly than retail and usually swimming in fees. How might one identify such sites? Well they aren’t rolling the dice when picking out their HTML Template, if you know what I mean. If you look closely their sites all have the same generic design and products, usually only changing in color scheme and price. Here is a list of some Drop Shipping friendly wholesalers that I trust, with reasonable prices. Let’s start with:
14k.co Drop Ship Program
Just provide a few personal information snippets and you’re good to go with their program, if you must settle for a program. But you don’t even have to enlist in their program to benefit from their prices, which are already very reasonable in my opinion. If you are a Gold connoisseur then you’ll be able to sniff out their specific items that are perfect candidates. I won’t tell you which ones because then I won’t have a monopoly on it, and trust me its hard to find a product that 100 people before you haven’t already broadcasted all over eBay. I prefer independent sourcing and I believe, in my experience, if you brag about your opportunity it becomes a national opportunity. That is when you learn your “Jackpot” just got split with 20,000 other winners.
By far, Sarraf simply has the cheapest chains and solid gold jewelry you can find retail online, plus free shipping. They’re not even paying me to say that. I just know from months of scouring at 3am for the cheapest Gold Hollow Figaro, without a merchant account, you won’t find gold jewelry cheaper. No account is required to purchase from them and I’ve never seen them run out of stock. They’re selections, explanations of various chain styles and sizes, and straightforward browsing style really makes me feel secure. If I had an online fireplace to cozy up to, with a hot cup of “No Gimmicks” hot cocoa, Sarraf would be my home. (You didn’t know an E-commerce Article could be so packed full of cheesy metaphors, did you? Well now you know.)
Wait, don’t write me off on your list of credible sources of information just yet. It sounds weird, I know. Isn’t Groupon for finding cheap movie tickets? Or last minute, “I forgot our anniversary and went to the casino last night”, cheap dinner deals? Well not only does Groupon constantly have smoking wholesale type deals on solid gold, but they also tell you exactly what they have left in stock along with how many have been bought. With that knowledge combined with their countdown style end times of each promotion, I’ve had some good success with Groupon-to-eBay auction arbitrage. I mean, they have had, virtually for months now, 6mm solid 14k stud earrings for 9.99. If you can’t make a profit from that price, K-mart is disappointed in you, and I don’t know if you will ever be welcomed at the Hoover Dam, not even for a peek. I once spotted a Groupon deal for a name brand watch that goes for $159 dollars elsewhere, for $19.99.
Aliexpress is basically Alibaba, except it’s not an app on your phone. I’m not going to get into details, primarily because I can’t really figure it all out myself. I think by now its pretty clear from my my various Casino related metaphors that I like to indulge in a little gambling every now and again-next-week. And in my opinion this site could be a Jackpot or a face-plant, depending on your ability to stay strong under pressure and sales tactics. From what I can gather, having navigated the paths of purchasing an item once or twice, its a collection of wholesalers who have their own stores. They have minimum buying requirements and separate pricing. Its noteworthy that the pricing that they have on the site may be totally different then what they have in actuality, and they don’t mind a little bit of bartering.
- If you download the Alibaba app you can make requests and receive quotes at which point you contact the seller and work out a deal. Alibaba wholesalers can be very, shall we say, persistent. But they can also be tricky. Personally, I tend to explore other avenues since I work with jewelry, and apparently nobody is monitoring the requirements for listing something as “Solid 14k Gold”. That turns my “No Gimmicks” Hot Chocolate ice cold, I’m afraid. Although for something like electronics, you’re welcome, I just pointed you towards your new paradise. Be free and buy as many.10 cent cellphone covers as your heart desires. Just make sure you know the merchandise you’re selling well, and investigate the seller
eBay itself offers you the opportunity to have more than one account, the technical reason is so that your buyers can’t peruse your sources thus rendering you obsolete. So even eBay to eBay drop shipping is possible, although you have to keep a keen eye on your product and ultimately increase your shipping time by double, as no eBay seller is going to ship to a random address. And, lets face it, understanding and patience is a foreign concept on eBay. It’s a bit like Day-Before-Christmas shopping, but with more blackmail and threats because no one has to look you in the eye. It’s not for the easily virtually intimidated, nor is it for the digital doormats. My advice is to opt for sellers with expedited shipping in the US, and watch their stock closely. Most importantly, remember that people aren’t all honest, and if your “Genuine” item turns out to be fake a long drawn out process of return-refund-return-refund-report ensues. Ultimately you will have to exhume that old printer after all, and probably lose your e-commerce appetite. At the very least, your long sought after eBay reputation will be smudged. Check the sellers reviews. If all 349 of them are from the same buyer in the last 2 weeks, and they opened they’re account a month ago, don’t do it. They will be shut down in a week or two I promise you.
Doba is by far the most popular Drop Shipping Source Provider, and one that you might consider, if you want to jump headfirst in large quantities. But regardless of the advertising, no source ships first and gets paid later. You need to have the capital to buy the product and then wait the time it takes for your buyers PayPal transaction to settle into your account to get paid. Period. And companies like Doba offer free trials but ultimately charge a monthly or yearly fee. The benefits are being informed of stock supply and help with integration into your website if you aren’t going the eBay way, thus saving you the hassle of being on ‘Stock-watch”. They also supply you with up to date photos, but these are the same photos they have supplied to 300 other sellers so you must know how to stand out. Besides the point, the unbeatable truth of the trade is, unless you have a credit card, you need to have the means to buy the product.
- Everything I saw on Doba during my free trial I was able to find elsewhere, sometimes cheaper. But for companies to go with, its the most reputable company. And if that’s your hot cup of “Safety Cocoa” then give them a try and at least browse their supply. It will probably be slow to start, eventually leading to bigger profits, but you will come out on top. You will profit, one unbranded Bluetooth speaker at a time.
To summarize my comparisons list, I find it the most effective to stick with one product you know well, scour the internet yourself, and find an amazing deal. I prefer talking with the wholesaler directly. Usually they ship free and swiftly and there’s no hidden fees. Just go with your gut and stick with what you know. The most important thing is to watch stock. And you will do something silly at some point. You will get excited and accidentally face-plant yourself off eBay for life. (In actuality, they are very understanding I’d like to note, and very forgiving too. This is coming from an accidental accessory to “Who Know’s What” that still sells on eBay). This brings me to the potential pitfalls of this trade.
Perilous Face-Planting Potentials
- Well you ignored all my advice and you went on your merry way only to find yourself in a bind because you listed your product exactly as the supplier had it listed. Now your buyer is angry because you claimed to have an “Impressive” men’s bracelet chain that ended up being.5mm and nearly microscopic. Now refund them their money, slap your own hand and don’t do it again. No matter how the wholesaler describes the product, you are the one responsible. So you must know size, inches, centimeters, materials, wattage, capacity, compatibility and everything there is to know about the product. Shake it off. It’s just one sale.
- In the beginning I had a couple harrowing situations where an auction ended and my supplier was out of supply, leaving me scrambling. I was scouring Etsy and Poshmark for an exact pair of Dolce and Gabannas. At times getting my tush saved by other eBay sellers or Bonanza. Even the local Craigslist was my knight in shining armor when this Distressed Damsel had dug herself into a whole by not doing her homework. Most of all you want your customer to be happy and also protect yourself! Follow the 5D rule. “Don’t Do Digital Dumb Dumb”. Send everything via snail mail, (well, have your supplier snail mail for you, you’re too busy being a retail superstar in your own home to mess with postal problems).
- Don’t ever, and I mean EVER, I beg of you, sign up for a shopping line of credit to obtain your merchandise. These sites will pose as credit cards for the credit challenged but they are lines of credit for their online outlet only. You WILL NOT PROFIT EVER. Their prices are so beyond retail that Movie Theater Concession Stands are speechless with admiration. Not only that but there is interest, fees, and application fees. Plus sending email fees, emailing emails to email you fees, and fees for the metaphorical tissues to wipe your e-commerce tears when you drown financially. I’m not going to point any FINGERS at any particular place, but they always say no money down and promise a guaranteed credit limit of way more than anyone with your credit score should be allowed. What they mean is a credit line of 150 dollars, which may buy you a set of silverware, and 50 of that goes towards your initial fee. Then as a proud new member, all that you receive at this point is the joy of browsing. Once you go to buy your silverware there is a 35 dollar down payment leaving you with about 60 something to spend. Oh shoot, with the shipping costs of 33 dollars you can only afford a pair of socks. These socks will ruin you, and possibly anyone associated with you, for life when it comes to credit and you won’t be able to get a secured prepaid collateral payday loan without uproars of laughter. Don’t do it. If they say no credit check, no employment check, and no down payment they mean they’ve ruined people. They’ve pillaged enough swarms of people to be confident that they can ruin someone as high risk as your neighbor. The neighbor who hid his car in your garage to prevent repossession, and asked you to pretend to be his boss if rent-a-center calls. That kind of confidence is trouble my friend.
- You know how they say “If it fits it ships” for USPS drop boxes? (This is for you who have to unfortunately deal with some shipping). Well it doesn’t ship if you have to shove, is my unfortunate experience. In fact just avoid the drop boxes for USPS altogether. Out of the 30 or so times I’ve used them, only about 10 items didn’t end up in the Bermuda Triangle called the “Dead Mail Center” in Atlanta. This is a facility that is fictitious I’m convinced, as they have no number or e-mail and you will never get your item back. It’s just gone. I like to think these prodigal items are being distributed amongst the poor, but they are probably just sitting in a pile somewhere. And nobody but you and your buyer cares, so if you use eBay get that nifty pay-as-you-go insurance application, it’ll save you in the long run.
- The last pitfall will be brief, due to embarrassment factor, and it also has to do with the unfortunate jungle of shipping etiquette. I know there are new eBay sellers out there this will help, and I know I’m not the only one who has ever done this. So when you go to actually pay for postage through eBay of course you want to pick the cheapest option. And as you mindlessly peruse your methods you see the cheapest option. But be aware, Media Mail is not just a catchy name for Cheap Shipping, it actually needs to be Media related. And they will know. And you will feel like I do telling this story right now. Again, slap your hand, and don’t do it again.
Well that’s my take on the ever more popular method of Drop Shipping, a profitable yet pitfall riddled minefield. But it’s a whole new world of opportunity for those of you who are picking up the pieces of their credit like I was, (I’ll turn the FINGER around for a moment), and don’t have much capital to start a business. So if you’re like me, and the thought of seeing another human being is something you could live without, it’s enticing. If the end of the movie “The Notebook” seemed technically endearing in theory, but not personally identifiable and everyone must be told, then yes drop shipping is for you. And on a side note if you said yes to that last part, maybe you have aspergers. I’d look into that, but that’s just my opinion.
May your wholesale hunting be fruitful, and your face-plants and perils be few, as you journey onward in finding your home business niche. If you are hungry for success you will find it, just keep your eyes open and your wallet will grow fatter. Watch out Wal-mart.