Forum Moderators: buckworks
Our goal is sell digital cameras and equipment. I personally believe this is a huge wave and will almost kill out film cameras in the upcoming years. But we dont wanna limit ourselves to that so we may move to a different nice if we need to.
My question is a multipart then:
1) Why would you buy from a dropshipper when the dropshippers prices arent even better than what someone can get on their own free will online?
2) Is dropshipping the way to go?
3) If this other drop shipper falls through what is a good place to find a drop shipper? If i wanna sell Canon or Olympus cameras how do I go about finding a good drop shipper or becoming a reseller for that?
4) Any other information you can provide about dropshipping that i might not have found out in my regular reading online. I've read about 30 sites and the information has started to get repetitive.
Thanks for your time and information.
[edited by: NFFC at 6:15 pm (utc) on April 17, 2003]
[edit reason] Specifics removed [/edit]
2) Is dropshipping the way to go?
Are you using a fulfillment house to pack your inventory? Or do you plan to have zero inventory and have a third-party warehouse ship the item? Dropshipping has its obvious advantages... I think its important to receive consistent and reliable service from a drop shipper so order inquiries from your customers are minimized.
3) If this other drop shipper falls through what is a good place to find a drop shipper? If i wanna sell Canon or Olympus cameras how do I go about finding a good drop shipper or becoming a reseller for that?
I doubt retailers will reveal their sources. It takes research and time to find them. You can start with the manufacturer as a point of contact. Find out where upcoming industry conferences are being held for your industry. Go dumpster diving at the camera shop or go visit the major electronic outlet on their restocking day.
in other words, buyer beware!
One of the problems facing you is that the camera business (digital, film, etc.) is one of the most competitive mail order businesses. Margins are squeezed very tight by competition, and the lowest price vendors often advertise BELOW cost and use unethical tactics (mandatory add-ons, excessive shipping, etc.) to boost the final price. You may also have to compete against gray-market product, refurbs, etc. Another factor is your distributor - my guess is that in this product area, your distributor is probably your competitor, too.
In short, you are hoping to compete in one of the most down & dirty areas on the web. To get an idea of the competition for a particular product, go to price aggregators like bizrate.com, mysimon.com, epinions.com, etc.
I just bought an Olympus C4000 camera a couple of months ago and was pretty amazed at how cheaply some vendors were selling them. On the web, the lowest prices for this camera were almost $100 below discount vendors like Best Buy, Sam's, etc. Big-name online retailers like Amazon were comparable to the electronics stores or a bit cheaper. While the very lowest web prices were from vendors that seemed a bit shady, by paying an extra 20 bucks I was able to buy from a well-rated, seemingly reputable vendor. In fact, it worked out just fine - no hard-core upsell, prompt delivery, good product.
BTW, since you are interested in this area, I can describe my shopping approach. First, I read online reviews of many brands and models. I asked around (even here), but the reviews were the most useful source of data - there are some very detailed, seemingly impartial review sites. After narrowing my choices to a model or two, I shopped local retail stores a bit. The prices were high, and the counter help not knowledgeable, so this was a wasted effort other than actually being able to evaluate the size and weight of the camera.
I went back to several comparison shopping sites, as well as several vendors that I knew or had done business with, and started serious price comparison. I found a coupon for OfficeDepot (or was it Max?), got all the way through order placement, and then bailed out when the coupon code didn't reduce my final price as expected - apparently, the coupon worked for everything except eletronics. Then I got to the point of adding the product to my cart in Amazon to see their secret price, but it was too high. I ended up dealing with a relatively unknown firm that had a reasonable number of user reviews at Bizrate and was well-rated. The firm either didn't carry or was overpriced on Olympus memory cards, though, so I bought one from another vendor.
I don't know how typical my procedure was - it took a few hours, and I'm sure some people are less diligent. However, the criteria I used (rock-bottom price from a highly rated reseller) would not favor a startup entrant.
One last caution - the camera biz is perhaps the most fraud and theft-prone mail order business. Many vendors do telephone verification of all orders and employ other stringent safeguards. It's also wise to ship in unmarked boxes, with a return address that doesn't sound like a camera/electronics business. Requiring delivery signatures is mandatory, too - you don't want to leave your $800 camera on someone's porch. Unfortunately, the merchant ends up holding the bag for all fraudulent orders and often for stolen shipments, too.
Good luck, though, and let us know how things go!
We're still scouring around looking for a good dropshipper with good prices. We're also looking for a good market niche as well.
What is considered to be a healthy margin for consumer electronic products? I was expecting a 20% profit margin, but seems like I have been expecting too much?
The items I sell, I scrapped selling about 30 lines - each cost around £200-£300 and I was making £3-£4 profit from each order (after all costs). After taking all costs into consideration, you would be lucky to get 10% from selling these items yourself, drop shipping and the company will want to make at least as much as you, so 5% may be about the right figure.
