Drop ship is becoming increasingly more popular with hundreds of different "wholesale" suppliers offering you the chance to sell a product and generate income without having to ever hold the stock. Unfortunately as demand has increased for a dropshipping service alot of scammer have jumped onto the scene offering a simular service who do not live up to there promises. I have been doing dropshipping in the past and in my eyes it really is a dead end route with little or no profit to be made, why I have come to this reason;
You find a dropshipper who will distribute products for you. Fantastic those endless hours of search can now pay off!?
You list an item for example on eBay which costs you to buy £12.00 and you sell this on eBay for £24.00 giving a gross profit of £12.00 (before all costs are taken into account) NOT BAD! Then someone else sees this perfect opportunity to sell from the same supplier and make money. So they list there item on eBay at £15.00 undercutting your prices! Then another jumps on the band wagon and decides to sell at £13.00 there idea is sure there is little profit to be made but ill sell large quantities which will make up for the less profit. All this time this is happening profit margins for everyone gets slimmer and slimmer till there is virtually none!
What I have also noticed... THIS IS NOT all dropshippers but I have found that some actually do sell on eBay them selves! This isnt good as they can sell alot cheaper and under cut the prices you pay making no profit to be made for yourself!
What you need to be aware of -
Most of these so called "suppliers"are actually middle men who are actually purchasing large quantities of products and selling them at a marked up price usually a little less than retail price.
Alot of websites offer a drop ship service and ask for a membership fee, why? Ive heard stories like it keeps customers away, allows us to trade at cheaper prices etc these excuses do sound reasonable and sound justified but what these sites don't show you are there prices. They offer instead a profit margin percentage rate usually 30-50% profit, sounds great right? So you join and pay the fee then you get to see how they have justified these profit margins real are... They conclude that for example an apple ipod which costs at retail price for example £100 actually costs £150 and are willing to sell them to you at £95! If you was to sell your item (if your lucky) you will more than likely make a huge loss.
Don't sit hours on end emailing so called "dropshippers" or searching on search engines 9 times out of 10 you wont find one... Pick up the phone and ring manufacturers, ask who they supply to. You would be surprised that they are delighted to give you this information as it increases sales and job security etc. Then approach these suppliers and ask them if you offer a drop ship service, alot of the time they wont instead offer you a chance to purchase wholesale lots with them, but if you stick with it you will find someone who will offer you the chance to make some real money. You just have to convince them and make them feel its worth the investment!
Hopefully this as helped but if you still feel drop ship is suitable for you give it ago, I would actually love to hear some success stories