Drop Shipping Sucks - Dont Kill Your eBay<sup>®</sup> Business


Drop shipping allowed companies to have people selling their products by distributing their catalogs, knocking on doors, and recommending their products to friends, family, and neighbors...  Without the overhead costs of traditional employees. With drop shipping, companies wouldn't have to provide benefits such as insurance, retirement plans, etc. and companies would only pay out per-sale (commissions).  This was ideal because a company would never have to pay for a salesman who wasn't producing results and could grow a huge sales force without any financial risk. Companies like this still exist today.  Mary Kay, Kirby, PartyLite, Lia Sophia, etc are all examples of drop ship companies that still run the "old-school" model of business.  Catalog & door-to-door sales driven by real people. But the key element to drop shipping was, and still is, a secured market.  The companies above sell products exclusively through personal sales reps and do not sell in retail outlets, to wholesalers, to the public.  This is what makes them work.  The prices, distribution channels, and markets are all tightly controlled. This is not true with the drop shipping companies that litter the internet with claims of huge profits selling popular items such as iPods, laptop computers, jewelry, etc.  Any product that is not controlled by the manufacturer and sold exclusively through personal sales reps (AKA. drop ship sales) will not be profitable online.  Why?...  TWO SIMPLE REASONS Reason #1 = Buying Power Resale (buying and re-selling for a profit) is all about buying power.  And with drop shipping, you have none.  Zero.  You are often buying just one of an item, and thus, have no buying power.  Because true wholesale pricing is all about quantity. A huge established retailer, like Wal-Mart for example, has extraordinary buying power.  They don't just buy one iPod at a time, they contract to buy thousands.  Let's look at the numbers using a gold necklace as an example... Let's say a wholesaler's cost on a gold necklace is $10 and the wholesaler sells the necklace to a famous department store for $11.50 each (cost +$1.50) with a quantity of 10,000 pieces.  The wholesaler will profit around $15,000 on this sale. If you want just one necklace for $11.50, the wholesaler will profit less than $2.00 and have to breakup a case of merchandise.  No serious company is going to make this sale.  Not even a drop shipper. Would you bother selling items...

On the Subject

On the SubjectWe are working in web development and print media. If you have a project that needs some creative injection then that’s where We come in!