dickbaker - 10:12 pm on Aug 5, 2010 (gmt 0)
Threads like these tend to generate rather strong responses from forum members who have competitors undercutting their prices by using drop-shipping, not charging MAP, or engaging in other practices. That's understandable, but it's wrong and probably not wise for those folks to paint their competitors with such broad brushes. If you dismiss the competition as idiots, you may miss the methods they're using to overtake you.
I just had a call minutes ago from a customer wanting to know if I had an Acme model XYZ in stock. He said that most of the sites he went to didn't have it in stock. Of the five distributors I deal with, two had the XYZ in stock. That distributor has at least three dozen of each of the fifteen or so different models Acme makes in stock. That's over $200,000 in inventory just for one small manufacturer. Hard for a small online store to match those resources if they're selling from their own inventory, and a great resource for someone who sells by drop-shipping.
As for drop-ship retailers not knowing their products, that's not something exclusive to drop-shipping, that's everywhere. There's morons in the brick and mortar world just as there are online. You have to know your product, whether you stock it or not.
Manufacturers sell to distributors because they're in the business of manufacturing, not wholesaling. Distributors sell to retailers because the retail business is entirely different than wholesale. To be successful, the retailer has to use a variety of means to get customers to buy. That's true whether it's a brick and mortar store, a stocking online store, or an online store that drop-ships.