Starting a Dropshipping Business

PierreF_2

Hi,
I have a great supplier that offers me a lot of products at a great price. The only problem being he doesnt offer dropshipping which would make my life a lot easier. But i am considering on striking a deal with the supplier for me to dropship his goods.
Would this sort of business survive? Items include, shavers, branded watches, headphones, kitchen equipment and childrens games. Basically everything!
I sold these items on ebay and sold close to 200 a week! Making 10% per item, so theres a good margin, even with ebays ridiculous fees!
I was also not buying in that much bulk so wasnt getting the biggest discounts, but this way i should be able to.
Feedback would be appreciated.
Im just trying to get a few answers from maybe people who are in this industry. Do i need a website? Should i limit the amount of memberships e.t.c
Thanks
Ps Didnt know if this should go on ebay forum or up my income. So if in the wrong one could a mod please move it

Hintza

Dropshipping is not a great idea unless you have a cast iron legal clause with your supplier not to sell in any of your markets. If a customer buys from you and the item is drpshipped the supplier will enclose their contact fetails so why would the buyer not buy direct (from your supplier) the next time.

Save your pennies and if possible increase your order size to maximise discounts and potential profits.

Other things to consider is what happens when your supplier oversells leaving your customers unsatisfied.

PierreF_2

My supplier doesn't offer drop shipping, what i mean is that i would buy the stock from them at discounted prices, and then drop ship the items for customers. Therefore there would be no sign of the official supplier e.t.c
The stock would be controlled, as they have a live stock update, so as soon as an item is out of stock i can notify my customers.

StaffsSW

You need to have rock solid trust in the abilities of your supplier, as they will be the ones who have most contact with your customers - the one who will rate you on dispatch time, packaging, communication etc. In effect, you personally will be rated on the performance of another party.

You also need to consider returns - where does your customer return faulty or unwanted goods back to? As a business seller you will be responsible for Distance Selling Regs compliance, not your dropshipper.

It's not an area of business I would feel completely at ease dealing with, especially in the commoditised marketplace you are considering. There is a lot of competition on those products you've mentioned, and as a dropshipper you will struggle to compete on price, and most of the customer service issues will be handled by the 3rd party, so what will your Unique Selling Point be? How will you distinguish yourself against the dozens or hundreds of other sellers in the same market?

payless

even with ebays ridiculous fees

Why do people say this -
you could pay less and use one of the less exposed sites OR pay to advertise in newspapers, havbe a shop - all come with fees

PierreF_2

As stated in previous post, i would buy bulk from my supplier of goods, so i would hold a lot of physical stock. Im not planning to do drop shipping myself but to offer drop shipping services to other people. So i would become seller to drop shippers.
The prices are competitive, I managed to sell a lot of these goods when i used to sell on ebay. And i spoke to my supplier and i will be offered a reasonable discount, meaning that i should be able to supply goods at the price i used to pay.

cyberbob

If your only making 10% per item I find it hard to see how it could be a viable business

PierreF_2

When i was selling on ebay i was only making 10% per item, but i sold around 200 items a week.
Now if i was to do the dropshipping, i would charge a membership fee, and because i would be buying more stock in bulk, i would get reduced prices. Which would make it financially viable.

cyberbob

If you can get enough people to supply. Its all a bit risky

Hintza

Why would you dropship the items? Surely if you got organised you would make more by advertising and fulfilling orders yourself.

The manufacturer has to make a profit
Your supplier has to make a profit (and if he is not the importer then add another leg)
You as the dropshipper have to make a profit
Your customers have to make a profit

You are starting to cut the cake awfully thin. Have you factored in VAT and tax? How much are returns going to cost you?

StaffsSW

10% margin is not worth getting out of bed for on that sort of product range. I'd be wanting closer to 100% to make it worthwhile after all costs - tax, returns, admin, my time etc.

10% though on Plasmas, high end PC's, luxury goods - that's a different story.