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Today
we will talk a bit about the topic of Drop Shipping, and I will let
you in on some of the closely held secrets that Ebay course
promoters do not want you to know! To start with I will give you all
a brief description of what exactly Drop Shipping is and how it
normally works.
Drop Shipping is a very popular
sales concept in today’s market place, and if done properly can
result in huge profits for the sellers. Drop shipping is a process
that allows you to sell a large variety of merchandise and no need
to carry any inventory at all. In general the drop shipper is a
large manufacture or surplus merchandise liquidator. They generally
have much more merchandise in inventory that they can possible sell
or wholesale themselves. They provide potential sellers information
about the merchandise they currently have in stock. This information
would include a description and photo of the individual items and
the wholesale price for the seller. The seller will then use this
information to market the items at whatever price they choose to
sell it for, The difference between the wholesale cost of the item
and the final sale price, is the profit for the seller. Then once
the sale is made, the seller forwards the purchasers shipping
address and wholesale cost to the drop shipper. The drop shipper
then ships the item directly to the purchaser. The seller never has
to even touch the item. The benefits of this type of selling are
enormous, and result in very little overhead expenses. If done
properly drop shipping is the Gold standard for selling on Ebay,
unfortunately it is very rarely done properly.
Many Ebay course packages out
there actively promote drop shipping and use that as a dangling
carrot to try and sell their particular course. They tell you that
if you purchase their course, they will give you exclusive access to
their drop shipping warehouses or partners (either for a for free or
for an ongoing monthly charge). They will also allow you to use
their prewritten item descriptions and photos in your Ebay auctions.
Some even set this up for you to do with a single click of the
mouse. They promote that you now have exclusive access to thousands
of different items and that your potential profits are limitless,
with very little work and no inventory. If all this sounds too good
to be true, well guess what? It is to good to be true! Just use some
common sense and think about it for a few minutes. They are selling
you this exclusive agreement that will allow you to make 50% profits
on every item of theirs you sell. How exclusive is this arrangement,
when they are giving this same deal to everyone who purchases their
course?
Sure the first person to sell
one of their items will easily make 50% profits. But the next day
someone else from the program will see that item sold and will say
to him-self that he would be happy with only a 25% profit. He then
lists the same item, from the same drop shipper, for the lower
price. Your only option is to lower your selling price or not sell
that item. Then the next day, someone else thinks they would be
happy with only a 10% profit, and then someone else thinks that a 5%
profit would be fine. Then you get an experienced power seller
coming on board and thinking that since he can sell so much volume
of that item he would be happy making only 1% profit on each item
sold because he will make up for it on the volume he sells.
Suddenly you are now doing all this work and making next to
nothing on the sale. Is this really what you signed up for when you
bought your course package? The only people making any money on this
situation are the course promoters, and the drop shippers who now
have thousands of people selling their items.
The other negative aspect about
drop shipping is that you place your entire fate and reputation in
the hands of somebody you have never met. After you sell the item,
you send the money and buyer information to the drop shipper, and
then you hope and pray that they actually send out the item to the
purchaser. Since the drop shipper handles thousands of different
items you also have to hope and pray that they send out the correct
item and that it actually works properly when the purchaser receives
it. If there are ever any problems in the process, you are the one
the customer will complain too, and you are the one that will get
the negative Ebay feedback.
Also, when so many people are
selling the same items from the same drop shipper, there is no
guarantee, that the drop shipper will not run out of merchandise
before he gets to your orders. You are then left holding the ball
and have to explain to the customer how come they will not be
getting the item they paid for.
There are ways to properly do
drop shipping but we will leave this topic for a future article. For
those of you that have been asking about my Website www.buckaru.com,
please check the site sometime after July 15th, as that
is the date it will become open to the public. So in conclusion,
good luck and good trading.
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