Clearing up the grey area ?

[Rainee Bows]

i was doing a litle research earlier and came accross this article i thought it may help our new members distinguish between some of the 'dropshippers' they may encounter during their research ......


http://www.allbusiness.com/specialty-businesses/home-based-businesses/4057589-1.html

i have mailed the author to see if he wouldnt mind the forum reproducing the content in full for its readers ... with credits of course


Rain
xxxx

[DGTG Wholesale]

Very Interesting read indeed, I think some of us would fall into dropship arrangement while others are definately dropship service. I think it would be very helpful for newbies researching to be able to identify between the two. Well done for finding such a useful article!

[Grifter]

It's very funny he describes how he doesn't use a dropship service but then stuffs his affiliate link to just exactly that at the end 

[Rainee Bows]

true enough but it also explains how people are getting away with claiming they are dropshipperss when in fact they do not actually hold stock ........

which is the point i was getting at


Rain
xxxx

[Rainee Bows]

Just got permission to reproduce the whole article save people hitting the link , obviously this is aimed at the American market I'm sure you can substitute UK equivalents if necessary


Using the Drop Shipping business model is one of the best fits for home-based business because you don't have to carry any inventory. You can sell any number of items from your home and not have to worry about filling up your basement with goods because someone else stocks the product and does the shipping. However, there is a lot of misinformation and confusion about drop shipping and how you can best build a business out of it.

A lot of confusion can be cleared up by distinguishing between what I call a 'drop ship service' and an actual drop ship arrangement with a supplier. In a drop ship arrangement with a supplier, your customer orders from you, you order from the supplier and the supplier sends the product to the customer. Three parties involved but it's transparent to the customer!

When a drop ship service is used, there is a fourth party involved. Your customer orders from you, you order from the drop ship service, the drop ship service orders from the supplier, and the supplier ships to your customer.

Here are some websites that are drop ship services:

    Doba
    Drop Ship Direct
    Drop Ship Design
    MegaGoods
    Net Drop Shipper
    Online Supplier

A major distinguishing characteristic between the drop ship service and the drop ship supplier is that the service does not actually stock any product. They're set up with online product feeds to various drop ship suppliers who actually do stock and ship the product.

You may be wondering why not just go directly to the supplier? Well, you can go directly to the supplier and bypass the service entirely. So now you might wonder why use a drop ship service at all? Are they scams?

To be fair to these drop ship service businesses, they do provide a service. Sometimes they're referred to as 'aggregators' because they are able to aggregate tremendous amounts of product from a wide variety of sources all into one system (their website). It would take you a long time to do the research and setup they have done to get the amount of products in place they have.

However, a big downside of using a drop ship service is that your costs will be higher. The fact of the matter is, they are another party in the transaction (a 'middleman' party) and they will markup each product because they have a business to run. In addition, they all charge membership fees - usually by the month. For example, Doba charges $39.90 per month.

Another downside is that when you use a drop ship service, you have access to the exact same group of products that everyone has and therefore it's difficult to carve out a niche. These reasons are why I never utilize them myself. I prefer to select my own niches and find my own drop ship suppliers. Saves me the middle-person layer and adds more profit for my business.

How do you find drop ship suppliers to deal with directly? Find a supplier and ask them! Oftentimes, the only thing that separates a wholesale supplier who drop ships and one that doesn't is the minimum order. If they are willing to ship 'one' of something, then they'll probably drop ship. Also you can use the Worldwide Brands OneSource directory to find drop ship suppliers (link here). I use OneSource myself to find drop ship suppliers.




*reproduced with kind permission of the author ~ Frank Ross

[gordym75]

Your url tags be broken rain. Missing an l in the opening tag.

[Rainee Bows]

ooopsie not missing but at the wrong end of the tag ......... 

[conran]

Interesting read.

I have always believed that the most successful businesses operate in a niche, therefore it's in a sellers interest to use a supplier of products (dropshipper) who focuses on that particular field.

When I was looking into who to use for dropshipping I found plenty of these middle men, and a look at their policies makes them pointless to use. One (which I won't name) stated that the seller is responsible for returns, refunds and so on. As a retailer, I am sure this is illegal. You are buying products from a company, and then selling them on, if that product is then fundamentally faulty it is the suppliers responsibility to repair/replace.

There are other issues too, such as the returns address, and the requirement to supply contact details on a retail site. If that company doesn't accept the returns, you have to, which means opening up your home address to an internet audience.

Always, ALWAYS go directly to the manufacturer or a niche supplier IMO. Even if they don't advertise a dropship service, there's a good chance they'll consider a deal with you on that basis if it means more income for them.

[Baa]

When I was looking into who to use for dropshipping I found plenty of these middle men, and a look at their policies makes them pointless to use. One (which I won't name) stated that the seller is responsible for returns, refunds and so on. As a retailer, I am sure this is illegal. You are buying products from a company, and then selling them on, if that product is then fundamentally faulty it is the suppliers responsibility to repair/replace.

You have basic rights under the sale of goods act (which I think has changed it's name) but as regards to returns, it really is only for faulty goods, cancelled orders are purely part of a customer service policy as suppliers aren't subject to DSRs.

Always, ALWAYS go directly to the manufacturer or a niche supplier IMO. Even if they don't advertise a dropship service, there's a good chance they'll consider a deal with you on that basis if it means more income for them.

I've never encountered a manufacturer who will dropship individual orders unless they are a very small company, in which case the items are usually made to order and delivery times can be extremely sketchy if you want to dropship direct from them.

[faze3]

There are other issues too, such as the returns address, and the requirement to supply contact details on a retail site. If that company doesn't accept the returns, you have to, which means opening up your home address to an internet audience.

So you don't believe you should have a contact address on your website? Totally against the DSRs I'm afraid. Not only that, I for one would never buy from a website that didn't show their full postal address.

Alan.