Hi,
I've been doing some research regarding maybe moving my site towards becoming a dropshipping site, or actually working with dropshippers.
Some pros/cons I see regarding this below:
Pros: - Don't need to carry any inventory less overhead.
- The manufacturer/distributor does all the fulfillment work relating to orders.
- My site will then mainly be responsible for sending orders to the manufacturer/distributor, customer service, SEO, and promoting the website.
- Usually, no order minimums when dropshipping.
Cons: - I would have to pay the "retail" shipping rates outlined by the manufacter/distributor. [This is a big con for me because I get great discounts for shipping rates.]
- I would have to pay for any fulfillment fees they might have.
- Higher customer prices due to having less control over shipping rates and fulfillment fees; plus including my own markup percentage (%).
I also found this company "<EXAMPLE>" that own over 200 ecommerce domains, and they basically seem to work with manufacturer/distributor dropshippers. Based on their about page it seems like they have done very well as operating like this with over $200 million in sales. However, I'm sure not every niche will have these same results.
What are your thoughts on having an ecommerce site that mainly deals with manufactors/distributor dropshippers?
It definitely interests me, but having less control over the customer's price is something that does bother me because it will probably make my prices higher compared to other competitors.
Thank you,
olimits7
[edited by: buckworks at 10:20 pm (utc) on Mar 11, 2010]
[edit reason] Removed specifics [/edit]
