eCommerce Tycoon

**maxlazer** · 01-22-2009, 02:11 AM

Drop shipping has three dominant scams and each has several variations only limited to the imagination of these opportunists. I call the three scams the list, the middleman, and the agent.

List

First is the decades old list of drop shippers the scammer wants to sell to you. None of the businesses or contact information has been verified for years and is completely out of date. These lists are usually offered for between £10 - £50. After handing over your money, you try contacting the businesses only to learn:

They have gone out of business
The contact information is obsolete
Stopped drop shipping years ago

Middlemen

Another common scam is the middleman posing as a drop shipper. This version does require that a real drop shipper exist. It is not the person you will be doing business with. He simply passes your order onto the real drop shipper, who packages and mails the product to your customer. Of course, the price he has offered you is substantially higher than what he pays the drop shipper.

Agents

These can be thought of as Multi Level Marketing (MLM) scams. The agent here charges victims a monthly fee to access the drop shipper. Quite often, they are also getting a cut from the drop shipper for any sales that you make.

**maxlazer** · 01-23-2009, 04:14 AM

A reputable drop shipper understands the business as well as you do and maybe a little better. They know that entrepreneurs can’t compete with the big discount houses based on price. Quality drop shippers offer unique products that people are willing to pay extra for.

Minimum orders and membership fees are to be avoided. Authentic drop shippers don’t charge either. Those that do are often struggling financially because their products don’t sell. Certainly, you don’t want to pay a membership fee to learn the product won’t sell.
They know that you will have trouble selling the products so they charge up front costs to be sure they will make money from you even though you can’t make money with their products.

The whole idea behind drop shipping is to pay for the product only after you receive an order. Any reputable drop shipper understands this and is structured to ship single items when you instruct them to. Requiring a minimum order indicates they are not properly structured to make single shipments. You don’t want your customer’s satisfaction left in the hands of these people.

Why would you pay someone to sell their products for them? That is what a membership fee amounts to. If the drop shipper has desirable products and is properly structured they should make their money when products are sold, the same way you do.

**witnesstheday** · 01-24-2009, 12:00 PM

why not just sell for affiliates? they are the "discount warehouses" you admit dropshippers can't compete with - plus they pay on performance so no membership fee. and they pay well, they really do.

**maxlazer** · 01-29-2009, 02:47 AM

Internet searches can be an effective way to find drop shippers. Especially when you know how to watch out for the scammers.

You can Google “crystal goblet drop shippers UK” to come up with a long list of suppliers to investigate. However, a quicker and more effective way is to find someone that is already selling items you are interested in. Email or telephone them and ask who the manufacturer or wholesaler is.

From there it is simple contact the supplier to ask a few questions that separate true suppliers from middlemen. Do you have a membership fee? Do you require minimum orders? Do you manufacture the product? Do you stock the products you sell? Do you have a drop ship programmer?

Trade shows are another excellent way of finding quality drop shippers. You get to look the supplier in the eye when you ask the important questions we’ve already discussed above. Trade shows also give an opportunity to go into detail about your requirements and learn if the supplier can really meet your needs.

Finally, a little known but effective source of unique products are government embassies or foreign government export offices. You can contact them for a list of suppliers and often they can provide a list of wholesalers already stocking products in the UK.

You now know what to look for in a quality drop shipper as well as what to look out for to avoid being scammed.

**$alesman** · 02-03-2009, 01:17 AM

I have yet to find one reliable. Seriously think before you do this and do your research.

**witnesstheday** · 02-03-2009, 03:22 AM

I'm about to start an extra business to help someone I know escape the ratrace inside 90 days. I have got everything prepared - it is to be a mailorder business, selling very few products but to a lot of people.

I shall get the products from wholesalers myself, package them and mail them out myself - and will thus make a tidy profit. I think this illustrates what you SHOULD do rather than this "dropshipping" option which is clearly just another way for a few muthas to exploit lots of sheep.

Of course I haven't decided on a product range for my mailorder business yet. I don't want a very big range - actually I want a particularly small range. Any ideas are welcome, but hey, in business one has to accept that one usually, perhaps always, fights alone.

**Briansaxon** · 02-17-2009, 11:54 PM

I think you're putting the cart in front of the horse. You should look for good suppliers with great products first. Then, ask about drop shipping.

If you use those worn out dropshipper lists, you'll be competing with everyone and their brothers. They'll be happy to list a product on ebay for a 2 dollar profit.

My advice is to find the manufacturers/suppliers that have a good niche product. You may not sell as much, but marketing will be easier and your profit margins will be larger.

**Dustin07** · 02-18-2009, 02:08 AM

Quote:

Originally Posted by Briansaxon

I think you're putting the cart in front of the horse. You should look for good suppliers with great products first. Then, ask about drop shipping.

If you use those worn out dropshipper lists, you'll be competing with everyone and their brothers. They'll be happy to list a product on ebay for a 2 dollar profit.

My advice is to find the manufacturers/suppliers that have a good niche product. You may not sell as much, but marketing will be easier and your profit margins will be larger.

I think you hit the nail on the head. Pick a product you want to sell, then find competitively priced suppliers.

It doesn't matter if they are middlemen. MOST dropshippers will be middlemen.

**toddGee** · 03-12-2009, 05:52 PM

I never had any luck using dropshipping because my profit margins were always cut back. It is very hard to compete with everybody else when somebody else is taking 25 percent of my profits. Shipping is a big part of B2C online retail, you want fast and accurate service to your customers.

I have recently changed over to a fulfillment company that allows me to use there warehouse and also do the shipping for me at a set price! On each order I have save about five to ten dollars, thats alot for my small company. Plus I have full control of my inventory, so there is no guessing game to see if my dropshipper has stuff in stock!