Why Drop Shipping Sucks

Drop shippers thrive on people who want the easy way out when starting an
eBay business. They know that many people don't want to stock inventory
themselves. The appeal of drop shipping is that you don't have to absorb the
expense and hassle of inventory in case that it doesn't sell.

But is drop shipping right for you? This Platinum PowerSeller says... avoid drop
shipping at all costs.

Drop shipping sucks because:

  • Even the best suppliers sometimes run out of stock. There's a great
    danger when you sell something on eBay nowadays and can't deliver --
    it's called feedback. You will get a negative feedback score because
    someone else promised you inventory that isn't there and you can't
    deliver to your client. If you sold something that you can't deliver, even if
    you returned money to the client, you will likely get a negative feedback
    score and a bad reputation along with it. What's more, low buyer
    satisfaction will reduce your standings in the Detailed Seller Ratings, which
    ties directly to eBay's algorithms. In short, your items will get reduced to
    the bottom of the search when buyers rate you negatively and even if the
    next buyer finds you, s/he won't have confidence in your ability to deliver.

  • You won't make much profit on drop shipping items. The margins are,
    well, marginal when dealing with drop shippers. That's because the drop
    shipper is the middle man and takes a bigger cut of the profit.

  • You will have back end problems as returns are inevitable. There's a lot
    of red tape to deal with when you use a drop shipper. If you choose to
    drop ship, make sure you understand how the supplier handles returns
    and go only with a supplier that lists the inventory on hand. Check their
    return policy, and make sure you highlight these details in your auction
    listings. Then be specific to your clients to set their expectations about
    returns. Knowing the stock levels will help you control the backorder
    problem. But again, it is inevitable in the new eBay climate that even if you
    are able to deliver on a backorder, the buyer will give you a negative
    simply because the package arrives late.

A better option by far is to buy in bulk (wholesale). When you buy wholesale,
you are in charge of your inventory and you will make the most return on
investment. Buying wholesale requires a seller's permit and some wisdom. Do
your research before you stock up on a product that no one wants. Start with
eBay's WANT IT NOW section. You may be able to discover trends. The true
key is to buy niche items yourself retail and then sell them 25-30% above
wholesale. Buyers want a deal and they're looking to you for the savings when
they shop eBay.

Want more tips on eBay? Visit our eBay Sellers page and visit again to get
our free eBay guide: Confessions of a Real Live eBay PowerSeller, coming soon.
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