Posts Tagged drop shipper scams
People being scammed by dishonest companies that promise to help them make money only to take their money and give absolutely nothing, or at least nothing at all resembling what they have promised, has been a common theme lately in the news. This will certainly give you a reason, if you are a business owner, to question whether it is possible to find a legitimate dropship business online.
Using b2b model drop shipment makes doing business easy. What you do is find items that your wholesale drop shipper has in stock, advertise those items for sale, and sell them to your customers. Now you just need to pay the drop shipper what you agreed to pay them and they will ship directly to your customer. Your customer has absolutely no idea that you aren’t responsible for them receiving the item they purchased; by utilizing the b2b model drop shipment process you have made money and saved time.
You can see why so many people are attracted to doing business in this manner. You don’t need a lot of equipment or storage space, you get to work out of your own home, and there actually isn’t too much work involved. If you use the b2b model drop shipment, all that you will need to get started with your own successful online business is a computer with internet connectivity.
In fact, the hardest part is going to be finding a reliable, high quality supplier. Considering all the people who have stories about fake online companies offering their “services”, it’s only to be expected that you would ask yourself whether you would be able to find a legitimate dropship business online. There actually are online companies who are use drop shipping as a legitimate part of their wholesale supply business and not just as a way to make quick money off of people; these companies are able and dedicated to offering high quality services to their customers and, ultimately, to yours.
There should be good and open lines of communication between the retailer and wholesaler using the b2b model drop shipment; the respective roles should be clearly defined and understood by both parties. While expecting the wholesaler to drop everything else they have to do and make your retail order their priority is unreasonable, it is not at all unreasonable to expect them to package and deliver the items you order out to your customer in a timely and professional manner.
The responsibility of making sure that your wholesale supplier knows about the drop shipment that you need to have delivered is, however, entirely yours. You should notify your wholesale supplier and make payment for the items that you need shipped within 24 hours of your customer placing his or her order with you. If your customer complains of a lengthy wait for delivery, it is NOT the fault of the wholesale dropshipper that you failed to notify them in a timely manner of the transaction.
As long as you are aware of your responsibilities; the work actually required, and the necessity of good, clear communication, there is no reason that you cannot have a good relationship with a wholesale drop ship supplier.
Drop shipping has garnered quite a lot of attention over the past few years, presenting an easy way to become an Internet retailer. Is it just another get-rich-quick scheme? Multi-level pyramid deal? Flash in the pan? Not really. Like anything, you do have to put some energy into it. When you first consider the concept of drop shipping, it seems remarkably simple. You don’t have to carry any inventory, and you don’t have to do any shipping. You just put up a web site, send the orders to the drop shipper, and collect the checks.
Well, it’s not really that easy, folks. Successful drop shipping involves successfully doing two things: Making a good product selection, and marketing. On the product selection front, it’s easy to just load up everything the drop shipper has to offer into your virtual catalog, but a more effective method is to create a niche for yourself—specializing in one particular area. Don’t try to be everything to everybody, because the customer will just get lost. Specialize in one area and position yourself as the expert in that area. On the second front, marketing—again, it’s easy to just put up a web site, but will anybody see it? How many web sites are out there today? With no marketing, again, it will get completely lost.
That said, drop shipping can be an effective management technique, especially for handling inventory.
Drop shipping, for the uninitiated, is a form of inventory control whereby the retailer sells his items to the customer, but instead of having a supply of the item on his shelves for immediate delivery, the retailer orders his items directly from the manufacturer or the wholesaler, who then ships them directly to the retailer’s customer. In this way, there is no need for the burden of carrying inventory. The retailer still retains his profit margin as a difference between the wholesaler’s or manufacturer’s price and that of the retailer.
Often, the final customer never knows that the retailer is drop shipping his merchandise because the retailer chooses not to disclose this up front, thereby hiding his inventory control from view. There are several ways to hide the drop shipping from customers. The best way to do this is to have the manufacturer or wholesaler ship the product with the retailer’s name and logo on the packaging slip.
The benefits are obvious: no inventory means less cost can be passed on the retail customer, and the retailer retains positive cash flow throughout the entire process. The potential downside is that it may take longer for the customer order to be fulfilled, since it’s going through a third party, there may be a backorder that the retailer is unaware of, and the retailer’s markup will not be as high as if they were sourcing, warehousing, and shipping the product direct.
In part two of this article, I will explain a few of the positives and negatives of drop shipping in more detail, and how the retailer who drop ships can benefit in the end. To be sure, there are negatives to the drop shipping idea, but they are manageable if you know how to navigate the drop shipping maze.
If you’ve been thinking about starting a business that uses wholesale suppliers to drop ship products to your customers, make sure you don’t miss the first, and most important step. You need to decide, in the beginning, what niche you want to choose for your business. The niche you choose will impact everything about your business, from the wholesale suppliers you choose to the type of marketing plan you decide to implement.
You see, an entire market is too broad for all but the largest of companies to try to take on. For a small business, especially one that’s just starting out, it’s best to divide the demand in the market into smaller, more manageable niches. By operating your wholesale business in a specific niche, you can focus your efforts on a specific type of buyer who’s looking for certain specialized goods.
One of the most important components in choosing a niche for your wholesale business is doing a market survey. You need to do a market survey in order to understand what products are being sold in a niche, as well as the areas that your competitors are already entrenched. By taking a look at the market, how much product is being sold and who is selling it, you can figure out where you belong. Ideally, you’re looking for an arrangement of factors including price, service, quality and product type that will maximize your sales while facing the least amount of direct competition.
You also need to consider your own interests and abilities when you’re choosing a niche for your wholesale business. For example, if you have no interest whatsoever in consumer electronics, it probably isn’t a great idea to start a consumer electronics drop ship business. The fact of the matter is that your desire and passion are a key element in being able to see your business succeed. Choose a niche that you know something about, and that you have some interest in.
As you go through the process of finding a niche, try to avoid thinking only about wholesale suppliers and costs. You might be able to buy products at a wholesale price that’s extremely competitive, but if you can’t find someone to buy those products or you can’t effectively market those products, your business won’t succeed. In addition, low wholesale prices also mean that your competition probably also has access to that kind of pricing, meaning you’ll have to find another area, whether it’s service or marketing, in which you need to offer something to your consumer that your competition can’t offer.
One of the best way for retail establishments to expand their offering of products is to utilize drop shipping wholesalers. Utilizing drop shipping wholesalers also helps the retailer to reduce their on-hand inventory, thereby lowering some of their overhead costs.
For a retailer to make effective use of drop shipping wholesalers, you need to first understand the process. Drop shipping is a different sort of business process from traditional retail sales. In a drop shipping arrangement, the retailer markets the product, collects payment for the product from a customer, and then orders the particular item from the drop ship wholesaler. The wholesaler then ships the supplier directly off to the customer.
The profit margin is different when you’re using this type of process than with the traditional retail supply chain. Your profit on any given product is the difference between the amount that you collect from your customer and the amount you pay the drop ship wholesale company. You don’t hold inventory, and you are not involved in the shipping process at all.
One of the great benefits to this arrangement is that it doesn’t require a large cash flow. The retailer is paid by the customer before they have to purchase the goods . In a traditional retail arrangement, you have to purchase the goods prior to being paid by the customer.
One of the key components to success is choosing a reliable, reputable and dependable drop ship wholesaler. There are several ways you can find a good supplier. You can start with your current list of vendors, and see if they offer drop shipping. You can also go directly to the manufacturer, to see if they drop ship. An online drop ship wholesaler directory is one of the best places to find reliable suppliers, as the directory does much of the legwork for you .
It’s also important to choose your product or products wisely. You should use the same kinds of criteria for selecting drop ship wholesale products that you would use when you were finding products for your retail stores. You want to choose a product that will be on demand, and you need to choose a product that you can sell at a profitable mark-up.
You’ll also need to plan for returns and other customer service problems. While some drop ship wholesalers will handle returns, many do not. These issues are easier to deal with when someone walks out of your retail store with a product, but become more complex when using a drop ship wholesaler. Make sure you know the supplier’s policies in regard to returns before you commit to doing business with them.
If you have a business on Ebay, you may be able to increase your profits and expand your business by using wholesale suppliers. Many wholesale suppliers will drop ship products for you, allowing you to focus on what you do best: getting people to bid on your Ebay auctions. Still, there are some important things to keep in mind if you’re going to successfully integrate wholesale suppliers into your Ebay Business:
First of all, you need to keep a close eye on what your fulfillment times look like. Don’t be afraid to send your customers emails asking them for feedback, or even filling out some sort of customer survey regarding the time it took to fulfill their order. If your orders are taking longer than you think they should take to get to your customers, chances are you’ll hear back pretty quickly. Because your feedback score, and the reputation of your Ebay business rely so solidly on shipping issues, this is key. Ebay and online customers often expect better service in terms of shipments, and if your shipments are regularly being delayed you’re going to have payment reversals and negative feedback that are going to severely hurt your business in the long run.
You also want to keep a close eye on stock. It helps, in this regard, to choose a drop ship wholesale supplier that allows you access to stock level information. When you’re selling items on Ebay, there is a time delay between the time you advertise the item and the time you receive payment for the item, and when you order it from your wholesale supplier. If your supplier runs out of the particular product you’re looking for in that time, you’re going to find yourself having to issue refunds and risk negative feedback. Remember, too, that Ebay sales are a contract. You’re not allowed to cancel an Ebay sale due to a product being unavailable. In fact, if you can’t provide a product to a customer, the buyer can petition Ebay to give you a seller nonperformance violation. When you get a certain number of these, Ebay will shut down your seller account.
You also need to be prepared to mediate returns. If a customer isn’t satisfied with the exchange or return process, you risk negative feedback that can hurt future sales. In some ways, you may wind up having to mediate the return process.
The success of your business relies, ultimately, on how good your drop ship supplier is. If your drop ship supplier is completely unreliable and provides products that aren’t of a sufficient quality, your customers are not going to be satisfied and your sales will drop like a lead balloon. Knowing how to find the best vendors is integral to the success of your business.
Before you can find the best drop ship suppliers, of course, you need to know what products you are going to sell. You need to figure out what products are in demand, an what products you can sell at a profit. It doesn’t hurt to also have a good idea of how saturated the market is for those products, as high competition usually means smaller profit margins.
Once you have selected a product, you need to start looking for a vendor. Finding the right best drop ship supplier can be a challenge. Fortunately, there are some shortcuts you can take. For example, one of the best ways to find a vendor is through word of mouth. You can talk to other small business owners, for example, who may be able to make recommendations. Obviously your competitors may not be able to give you this kind of information, but you might be able to get it from people selling products in a niche that’s similar to yours.
Another great way to find the best drop ship suppliers is through a directory. There are many online directories of drop ship suppliers. Of course, not all of these directories are the same. Some are more current than others, for example. Some are more extensive than others, too. Choosing the right directory is key if you’re going to be able to trust the information in that directory.
You may also be able to find drop ship suppliers at trade shows in your niche. Most market segments have some form of trade show or another, whether it’s a regional meeting or whether it’s something on a much larger scale, such as the E3 Electronics Expo that takes place in Las Vegas each year.
Ultimately, the success of your online business relies heavily on your drop ship supplier. If you have a good drop ship supplier, it doesn’t guarantee that your business will be successful; however, if your vendor is unreliable, your business is almost certainly doomed to failure.
Unfortunately, one of the realities of the world we live in is that there are scammers out there who hope for nothing more than separating you from your money, and who offer nothing in return. This is as true in the world of drop ship wholesalers as it is in any other type of business. Whether you’re just starting your drop ship wholesale business or whether you’re considering changing suppliers, knowing how to avoid drop ship wholesale scams is essential.
The key here is being both cautious and skeptical. Regardless of how well designed a website is, for example, it could be a drop ship wholesale scam. Just because you’re more comfortable looking at a larger, well-designed site doesn’t mean they’re any more legitimate than the poorly-designed two-page site.
In this regard, one of the most helpful resources you can have is a drop ship wholesale directory. A reliable directory will not only help you to find wholesale suppliers, it will help you to weed through them. Some directories offer reviews of specific suppliers. Other directories have a feedback sort of rating system set up that allows members to rate the various suppliers. In most cases, the vendors listed in directories are free from wholesale scams because the directory is able to weed out the scammers.
You can also do some legwork on your own. For example, a reliable wholesale supplier will be able to provide you with a street address and a phone number. Look up the street address, to make sure it’s legitimate. Call the phone number, and talk to the supplier directly. Make sure you also check the phone number and address online, to verify that there aren’t reports of the business scamming people.
Word of mouth is another great way to weed through wholesale suppliers and avoid scams. You can talk to other business owners about their experiences. Find out what wholesale suppliers have been reliable, and which ones haven’t been as reliable.
You might consider checking with the Better Business Bureau, as well. While not every company has a listing with the Better Business Bureau, you can bet that companies that are scammers have probably had complaints filed against them. In some instances, you might also be able to check with the attorney general in the state where the wholesale supplier is located to see if there are pending cases against the supplier.
If you have a business that relies on wholesale drop ship distributors, then you know how important it is to choose the right one. It’s your reputation that goes on the line with each sale, and every customer that is unhappy with the product sent by the wholesale drop ship distributor is, ultimately, unhappy with you. To insure the success of your business, there are some things you need to keep in mind when trying to find the right vendor to deal with in your business.
One way to find a wholesale drop ship distributor is with a simple web search. You simply put in the name of the product that you want to sell and then put “dropship” or “wholesale” after that product name. However, this is one of the worst ways to find a distributor. When you find a vendor in this fashion, you do so without any context. You have no references and no information from previous customers. All you have is whatever the company says about itself on its website. This information is limited, at best.
Another way to locate wholesale drop ship distributors to work with is by checking out online classified ad sites. Sites like Craigslist often have ads for these kinds of companies, as well. Here again, your frame of reference is limited. Unless the company is involved in an outright scam and has been banned from the online classified ad site, you again have no way to know how reliable they are.
Word of mouth is one of the best ways to choose a drop ship distributor. The difficulty here is that you don’t always have access to someone who’s dealt with a given supplier. Other businesses who are selling the same products as you probably aren’t going to readily give you supplier information. You can, of course, get information from businesses who deal with a supplier in a related niche, in hopes that the supplier will also have products that you’re hoping to sell.
An online directory of drop ship distributors is often the best way to go. With a directory, you are able to compare drop ship distributors side by side. Many directories offer a ratings system, so you can see what other customers’ experiences have been like. Make sure you choose a directory that is reputable, and that has all of the specific features that you’re looking for.
If you’re new to the world of drop ship business, it can be a little bit overwhelming. You might, for example, look through a wholesale drop ship supplier database and not even know where to begin in terms of what kinds of products to sell. Taking the time to choose the right niche for your drop ship business is critical, and will have a direct impact on how successful that business will be in the long run.
Still, how can you know what the right niche is for your drop ship business? There are several factors you need to consider:
First, you need to think about your own interests and abilities. Do you like to plan parties, for example? Then you might start a drop ship business that sells party supplies and decorations. Are you an audio lover, always tinkering with your stereo and buying the latest audio equipment for your home? Then your business might revolve around entertainment electronics. If you have interest or background in computers, you might decide to start a business involving computer parts or laptops.
Why is it important to find a niche in an area you’re interested in? One of the biggest factors in whether a business succeeds is passion. If you’re not passionate about what you’re doing, you’re not going to make very much money doing it. To succeed, you have to love what you’re doing.
Next, you need to think about wholesale suppliers. Some niche markets seem to have a large number of wholesale suppliers, while other markets have very few. Weeding through those suppliers can be a full time job, if you let it. One of the best ways to save time at this step is to enroll in an online wholesale supplier database site, and let the site do much of the work for you.
Finally, you need to think about the market. Sure, you might find a wholesale supplier that can give you excellent pricing on a particular product. However, you may find that not many people actually are interested in buying that product. If the particular niche is very small, you’re not going to have much success.
The opposite is true, as well. If the niche market you’re considering for your drop ship business is very popular, it’s likely that the market is already saturated. There may be dozens, if not hundreds, of competitors out there who are selling the same products, sometimes at a better price.
Regardless of what you might have heard in the news, there is plenty of opportunity for the enterprising individual to make money online with drop shipping. There are constantly new products being released on the market, and someone is always discovering a cheaper way to make an existing products. Some businesses fold, and some businesses change their focus, creating gaps in the market that, just a few months ago, you might not have been able to take advantage of. Truly, there has never been a better time than now to get involved in an online drop shipping business.
However, there are some things you need to keep in mind when starting your online drop shipping business. For example, you need to watch out for those that offer to help you make millions of dollars in just a few months with little or no effort. The fact of the matter is that success requires hard work and dedication, and is rarely instant. It takes time and sweat to build a successful business.
This isn’t to say that you can’t get rich with an online drop shipping business. You absolutely can. However, you still have to work at it. The time and energy that you would otherwise spend dealing with issues like inventory and shipping will need to be spend dealing with things like sales and marketing. An online drop shipping business doesn’t mean you don’t have to work, it just means your work is different than if you ran a different type of a business that didn’t utilize drop shipping.
That actually brings us to the next point: if you’re going to have a successful online drop shipping business, you need to be an expert at marketing. You need to have a marketing plan mapped out, and be able to execute that plan as designed. You also need to be able to change things in the process. If something isn’t working, you need to be ready to drop it in favor of a different marketing tactic that will work.
Finally, perseverance is the name of the game when it comes to building a successful online drop ship business. It’s going to take some time to get people to start buying from you. In many cases, it may even take months before you really begin to turn a profit. If you’re not willing to stick with the business for the long haul, this probably isn’t the right business type for you. If, on the other hand, you can be dedicated to the task, you might find success isn’t nearly as far down the road as you thought.