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Turning your merchant into a dropshipper

Anyone doing it?

9:53 pm on Apr 13, 2005 (gmt 0)

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When I use to have a regular job, we found a guy who had copied our site and had basically marked up our prices and then used us as a drop shipper. Not a bad idea, I thought at the time.

I have a drop ship site that does pretty well, at least it makes a good cut and because of it, I have turned my thoughts to my merchants.

For example, I have a merchant who has a fantastic product, great niche but a god awful site as far as usability. While the CTR to the site rocks, the CR once they get there is bad, bad, bad. It may have alot to do with the fact that it is near impossible to figure out how to checkout. I was thinking, if I took their feed and made a usable site taht took the order then placed the order myself on their site (with cookies intact) I'd have a darn good deal going.

Any thoughts as to this line of thinking?

3:06 pm on Apr 14, 2005 (gmt 0)

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If the merchant is small enough, I'd call them and discuss what you could do for them with a private label affiliate program.

Give them a solid proposal and tell them that you're going to be in that sector .. either with them or one of their competitors.... you know how the sales pitch goes. :)

I personally do not like drop shipping as it involves way too many variables and I do not like handling credit cards unless it is for one of our local stores.

4:05 pm on Apr 14, 2005 (gmt 0)

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Yep, I'm with shri - in fact I just completed a call with a whlesaler looking to become a drop shipper as their online sales are looking so healthy.

Your way would work, but it's kinda unethical and also very labour intensive as u are completing each order manually. If the merchant finds out what you're doing, he or she may well take a dim view.

Worst case scenario, you end up doing it the hard way and the merchant is happy with the new business. Best case scenario, they have you help them improve their site and become their first affiliate, leaving you to build traffic without the extra work of the other approach.

7:39 pm on Apr 14, 2005 (gmt 0)

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Why not take the money yourself and get them to fulfill and then invoice you?
9:37 pm on Apr 14, 2005 (gmt 0)

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This is a big part of our business model. We deal with many suppliers who drop ship items direct to consumers. It is MUCH more labour intensive than an aff program but at least you are building your own customer base, control your own promotions, and building value into your own 'brand' or domain. Running a warehouse and stocking inventory is an expensive part of an online operation.

In fact this is Amazon's new model as well. They are dealing with 100's of dropshippers all over the country and taking 15pts instead of the 5-8% most affiliate programs are offering.

I'd say if you are generating more than 20k per month in sales for a merchant/product than it is worth persuing this angle. Provided there are 3-4 merchants/products you are doing this for.

You are in for a world of hurt at first dealing with merchant accounts, shopping carts engines, fraud detection, phone support, refunds, datafeeds, etc etc.

But once you are running smooth, you are headed up a road paved with gold. We did 3.5M in sales last year and never bought a peice of inventory until after we sold it. Had we stuck with the aff model, we probably would have done 1M is sales and put 8% of that in our pockets. (mind you my children might know what I look like... so there is an advantage there)

But I highly recommend it if your have tenacity, capital and LOTS of time.

11:05 pm on Apr 14, 2005 (gmt 0)

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otc: where do you find dropshippers for your products. I've been thinking of doing this for a certain niche but can't seem to find dropshippers. I've found quite a few sites that seem to be doing what I want to do, but none that do it well. Right now I am signed up one of those sites affiliate program, but I rather just find a dropshipper and start my own affiliate program.

How do you recommend finding a dropshipper for a specific niche. It seems the people in the niche now have inventory, although I may be wrong as this is how I would want to appear if I were dropshipping.

Any hints for the newbie?


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