Dropshipping

fish89

Hi,

I'm 22 and graduate this year from a Business Management degree. Due to the economic climate and the fact that progressing my career is proving very difficult at the moment I need to earn some more money.

I have my own house; but it is small and my partner would hit the roof if it became more like a storage container but I want to sell things online.

I've been reading about dropshipping recently and was wondering if anyone has found it profitable? I was wanting to build up my own website as opposed to eBay to cut down on listing fees and I appreciate this will cost.

Thanks.

InsideInsurance

Certainly known people that have done a good business from it but you need to be careful on who you select so firstly you understand the whole process, where liabilities sit, who owns the customer and who the customer sees

fish89

I have a friend who is a web designer and can build an ecommerce site plus improve searching with Google.

I don't have the experience but I don't need the business to kick off immediately. I will use social media and hopefully, so long as I can get products at a good price, sell at a minimal profit so that my prices are very competitive.

I've seen wholesaledeals.co.uk but can't afford the £70 to register just yet. These seem the only company (along with e-Source) that don't appear fraudulent.

am

It's worth reading about blinds.com and other dropshipping startups that appear to be doing quite well. In essence, one of the most famous ecommerce websites - Zappos.com - is a dropship business. Essentially, they ship in many cases direct from manufacturers to end users. And when they do warehouse, they use automation and other efficiencies to ensure a fast and profitable operation.

Mistral001

My impression is that dropshipping reached its peak about 2 years ago. You might be getting into somthing which is on the decline and unless you can do something bigger and better than the people doing it at the minute, you will have a struggle.

Thriftee3

As mentioned previously, Zappos.com is still going from strength to strength in their business and they provide dropshipping facilities. Another option is to apply to Amazon to become an associate and set up a site catering for a specific niche. Doing this is a business in itself, and you would be leveraging the huge amounts of traffic and also the trust that Amazon already have built up.

Typically, going down this track though, you would need to set up a few sites to be profitable - and there will be a lot of work ahead in terms of niche research before setting up a site.

It's work, but it can be very profitable if done correctly.

Good Luck!

Baking_Mad

Thriftee3 wrote: »

As mentioned previously, Zappos.com is still going from strength to strength in their business and they provide dropshipping facilities. Another option is to apply to Amazon to become an associate and set up a site catering for a specific niche. Doing this is a business in itself, and you would be leveraging the huge amounts of traffic and also the trust that Amazon already have built up.

Typically, going down this track though, you would need to set up a few sites to be profitable - and there will be a lot of work ahead in terms of niche research before setting up a site.

It's work, but it can be very profitable if done correctly.

Good Luck!

Hi, I've just had a quick look at Zappos website. Am I right in thinking they only offer free USA shipping? And also if you were to dropship from abroad you would have to clearly advise your buyers of the potential imprort tax implications and the length of shipping time. That's where it gets complicated.

Baking_Mad

OP, sorry to hijack the thread.
I've been thinking of dropshipping for a while as well. I've done quite a bit of reading on the dropshipforum and had a browse through some free dropshipping sites.

Unfortunately, I'm not in the position of building my own e-commerce site yet and ebay is my only option. This, therefore, leaves even less profit margin. By simply scanning a few randomly chosen products on dropshipping sites and comparing the competition on ebay it seems there is either no mark up in it at all or a very small profit of 20-50p to be made. And in fact I've come to the conclusion (please correct me if I'm wrong) that you would have to be VAT registered right from the outset in order to claim VAT back from HMRC to even get to that 20-50p profit. :eek:

InsideInsurance

If you are selling to consumers rather than businesses you do not want to be registered for VAT unless you are selling 0% rated products.

If you buy from your supplier for £1 and sell to the consumer for £1.50. If you were VAT rated you'd be able to claim back 17p from what you bought but have to pay HMRC 25p so you actually reduce your profit by 8p

Things are different if you sell predominately to companies that are themselves VAT registered because they dont care if it is £1.50 and no vat due or £1.50+vat.


If you sell on ebay the margins are very thin and you need to either sell very large quantities or have very cheap supply. Problem with drop shippers is you have another mouth in the supply chain to feed.

fleetco

I would suggest having a look at the Dropshipping Forum ( http://www.dropshippingforum.co.uk ) - it's run by professional dropshippers and they offer very good advice to anyone thinking of starting up and they aren't biased.