Home – New Forums Logistics Does it worth to start business based on dropshipping suppliers? Reply To: Does it worth to start business based on dropshipping suppliers?

  • Total posts: 873

I looked at this recently, as an option to add an additional revenue stream, using ebay.

I used all ex-GST sums for my calculations, and ebay’s calculators to work out insert/final value fees etc.

what I determined was, with my current relationship level with my supplier,

if I was to list a Desktop from my supplier, (who charges no shipping and delivers direct to my customer with my branding) I could buy it at, let’s say, $500.
after ebay’s listing & FVF, I ended up needing to add almost 15% just to make a couple of dollars. That’s before considering the time it would take me to do all the listing and customer management etc.
even at that 15%, it’s definitely above what other vendors have the exact same product on ebay for.

to keep prices at or below the exact same model from other vendors on ebay, I needed to use a minimum of some type of storefront, and lower markup. Even then, I needed to sell 3 a month to break even.

it’s definitely doable – there are people out there with very profitable drop-shipping ebay stores.

it’s probably more do-able if you had a credit account with a supplier so you could:
1. accept money from client on day 2 of the month
2. ship item direct on day 3 of the month
3. have all revenue in a high yield account.
4. pay supplier at EOM.

so you make a tiny bit more off the interest.

it does require alot of work though is what I took away from a few hours research. If it’s your only line of revenue, it’s probably ok to spend time on it.
but in my case I can’t justify the time I’d need to spend in terms of listing things, monitoring auctions and replying to questions, then providing post-sales support

plus, you really need a point-of-difference. there were many vendors selling the exact same thing as the options I was looking at.. so you need a way to stand out (or a very specialist product)

if you’re running your own ecommerce store, it’s probably different.

what you really want to do is get everything systemised:
– storefront (ebay, own ecommerce, whatever)
– automatically adding/changing/ending listings
– linking storefront to your accounting system
– linking storefront and accounting system to dropshippers system via xml whatever

to try and reduce what you actually need to do.

ideally, I visualise a middleware layer that, on monday morning, gives me the latest price list from my two suppliers, lets me go through and tick a bunch of options to add to a listing queue, have it automatically pull the relevant specs from the distributor and add to the listing
then all you’re doing is, once sale finalises and you receive payment, ticking “Send-order” to the distri and following up with the customer in a week.