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Dropshipping for ebay and Amazon.
Dropshipping explained, examples of where to look and the pros and cons.
Tracy’s Tuesday Tips: Dropshipping Pros and Cons for ebay and Amazon FBA
Dropshipping means selling an item that you don’t physically own and you have the company send the product directly to your customer. You find the buyer and you have the company connection that dropships to your buyer/customer and you don’t have to physically handle any product. There are companies that gladly do this business model.
You have to find a legitimate distributor, there are scams out there as you may already know. Make sure it is a distributor who actually has the product you are looking to sell. There are middle men out there that don’t physically have the product, they in turn contact the distributor and have the product shipped for you which will cost you more because of it being a middleman.
You have to be mindful of the profit margin as it might be narrow. You have to research each product.
So after you research a product and find one that has a good profit margin, next you list it on the platform you choose to use, such as eBay. Then you sell the product for your asking price and collect the money from your customer and you then place the order with your distributor to have the product shipped directly to your customer. This is basically how dropshipping works in a nut shell.
There are some cons to dropshipping.
Things are out of your control. You have no control over how soon your distributor ships the product to your customer. You don’t have control how well they pack the product for shipping to ensure it doesn’t arrive damaged to your customer.
You could end up with a high cancelation rate with Amazon. You might sell the product then order from your dropshiper and come to find out the dropshipper doesn’t have any to ship to your customer. In some cases it could be a few weeks before they receive a new shipment of the product. It this happens to you then you would need to cancel the order because of the timing and not having the guarantee the distributor will be getting anymore in to be able to ship to your customer. If you have a high rate of canceled orders then Amazon and eBay could cancel your account. You have to be on your game and make sure you do your research.
Another con to dropshipping is the competition. You are not the only one looking for dropshipping products to sell.
Pros to dropshipping
You don’t have to spend money upfront for the product you are selling. You don’t have to take the risk of buying inventory and hoping it will sell. You could use dropshipping as a test for a product you are considering buying.
You could also attend trade shows to gain contacts for companies and manufacturers of products. You could establish relationships with these companies and try to negotiate for exclusive rights to sell on eBay or Amazon.
Another option is to private label a product to sell. It would be your very own product. You can search on Alibaba.com for possibilities of products. Again you have to do your research into the companies and the products to make sure you are able to sell for a profit.
Here are some helpful websites you can check out for products to sell……
Liquidation.com
Gardensunlight.com
Trademarkcommerce.com
Worldwidebrands.com
Rexdistributor.com
Here is an example of a letter you can send to a distributor/wholesaler.
To Whom It May Concern,
I came across your _________ products that you exhibited at _______. I am a reseller and would be interested in carrying your line of __________. Please send me a catalog and your requirements for minimum orders.
Thank you,
Your Name
Your Company Name
Sales Tax Number XX-XXXXXX
Your street address
Phone Number
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