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I just joined this forum. I have been sourcing for a way to setup an online business selling wholesale products by dropship.
The one I finally signed up for gives away FREE E-stores loaded with 100s of dropship products. Which can also be sold on Ebay. you can either sell using their free online store or order wholesale and sell through ebay auctions.
I have not upgraded to their premium membership which supposedly offers good commission payouts for people you refer to them.
Question : Does this sound feasible? Why would companies give away free stores?
So far, they seem to be all they promised. With an EXCELLENT backoffice to manage the store with. I can even upload my own products to sell, if I upgrade to their Gold member. Which is only $50 a month. Cheaper than setting up my own online store.
Appreciate advise from the experts here before I try it. Thanks.
In case you wanna check it out for me, they are at :
Free Store Club
[edited by: DaveAtIFG at 3:22 am (utc) on Sep. 18, 2004]
[edit reason] Removed URL [/edit]
You really need to compare their prices to the prices others are charging then and only then are you able to work out if its likly to be a success.
One matter to consider is that the cart isnt likly to spider well.
The big problem with distributers or manufactuers, is that many of them are still stuck in the 'pre-ecommerce' supply change management, and are not willing to ship directly to the customer.
The advantage we have, is that we have already done a large portion of business with our various distributers and manufactuers, and are willing to work with us, rather than lose our account to the competition.
It is more difficult when you starting from scratch, and have no buying history with another company. You may need to use a second tier distributer, until you get a good volume of sales. You can then approach the first tier distributer, and depending on your volume and the industry; the actual manufactuer.
Some manufactuers may also claim that they don't sell directly to retailers, but this is ussualy a front to keep the distributers in the supply chain happy. Once you are big enough, they will deal directly with you, as they know that they could lose a large account to the competition.
As a result, your customer would blame you for merchandize that takes too long to ship.
Once you're set up, as long as your margins are working you can make money. The place you get hurt with drop-ships as well is in the split shipments. Say you have relationships with 5 different drop-ship companies and sell a bunch of different lines. You get an order that forces you to source your items from 3 partners. Then you're getting hit 3 times for shipping while you're charging your customer as if everything was coming from one warehouse. Orders like that will make you bankrupt very quickly.
Hope this helps.
(Note: I have no relationship to this website, I just found it a valuable source of info.)