Dropshipping On Ebay - The Drawbacks

Dropshipping On Ebay - The Drawbacks
On the face of it, dropshipping seems the perfect way to do business; no stock to carry, no packages to wrap and mail, minimal paperwork - how good is that?

In reality though, things are never so simple. Dropshipping is a great concept but making a profit from it, isn't so easy.

One drawback is the upfront fees that some dropship companies charge, you can see their point, it puts people off from ordering stuff for their own use at reduced prices.

But for resellers it's not so great, you have to fork out the fee before you get sight off their prices - before you know what the profit margins are. There are some dropshippers who don't charge upfront fees but the drawback here is; loads of other ebay traders are offering the same products and that leads to another drawback - the amateur element who price products at a little more than cost price.

To test this, check out the free dropshippers, choose a product that you fancy selling then estimate how much you could sell that product for on ebay and make a reasonable profit, taking into account ebay and Paypal fees.

Go to ebay and type the product into the search box and in all probability, loads of other people will be offering the same product at a lower price than you would. I do this excercise regularly and am amazed at the prices people list at. I do the maths, total cost price including shipping cost, eBay final value fee and Paypal's slice of the pie and often see that the seller is only making a few cents profit - have thay failed to consider final fees or are they just stupid and happy to work for nothing and in doing so, kill the market for everyone.

I've found products at free dropship sites that are not being offered by anyone else on ebay and I've listed them with reasonable profit margins and sold plenty until noticing that sales suddenly dry up. A quick search usually reveals that someone as listed the same product with a tiny profit margin and cut out the competition (me), what's the point? At this stage, I stop selling the product - I'm not prepared to work for nothing, I'll leave that to the idiots, there are plenty about!

Another problem with dropshipping is the pricing, that is to say, the price dropshippers charge for the products. In a lot of cases, when you check out the selling prices on eBay, you'll find that you can buy products from sellers on eBay cheaper that from the dropshipper. Usually in this case, the sellers are not fools or amateurs, they are people who buy at wholesale prices or job lots or import the products direct. If you've got the buying power, this is where the profits can be. Not everyone has the buying power though and that's why dropshipping looks so attractive.

Dropshipping can be profitable but you have to do your homework and be prepared for someone to jump on the bandwagon and steal your profits in an instant! Your homework should consist searching out lesser known dropshippers. Check their products and prices and check their reputations. If you find lesser-know suppliers you have a better chance of holding on to your place in the market and your profits. The amateurs won't take the trouble to find sources, they will use the well-known companies, you will have the edge.

So, dropshipping can and does make money but you have to be on the ball and keep one step ahead - never take anything for granted. For more info about dropshipping and finding products to sell CLICK HERE.