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dropship fulfillment question

by birclore
13 replies
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Hey guys,

So the two options I have right now with my eCommerce site:

1) Supplier/manufacturer who is willing to ship product directly to my customer (standard dropship model). Problem is the products are more expensive and worse quality (for my particular product).

2) Purchase from a supplier/manufacturer in bulk and they will send me the order and then I have to send the orders to my customers. Very good price and high quality.

Problem is that I would rather poke out my eyes with a fork than go to the post office every other day spending my life sending mail orders and stocking products in my house (not that there's anything wrong with people who like that).

SO here is my question. Can I have the supplier/manufacturer send the products to some generic warehouse/fulfillment agency who will do the storing/mailing for me? Do these companies exist? How much do they usually cost or what type of volume would you need to be doing to make it worthwhile?

thanks
#dropship #fulfillment #question
  • Profile picture of the author pavv
    Hi Birclore,

    While the prices are not as good for dropshipping it is generally still worth it. With the amount of time packing and sending orders, paying double postage, buying packing materials etc. your profit margins and time/value go down quickly. I've done this in the past.

    While I have not used fulfillment centers (I stick to dropship) I have looked into them and I think you really need a good volume of sales for it to be worthwhile. Just think of it as shipping the orders yourself except now you are paying someone to do the work instead of doing it yourself. Great if you have a lot of sales, but if it's low volume low profit margin your not going to make money.

    So to answer your question, this is what I would do if I was you:

    1) Start out dropshipping, work on marketing and building up sales volume
    2) When you are selling enough, do some further research into fulfillment

    Hope that helps
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    • Profile picture of the author birclore
      Originally Posted by pavv View Post

      Hi Birclore,

      While the prices are not as good for dropshipping it is generally still worth it. With the amount of time packing and sending orders, paying double postage, buying packing materials etc. your profit margins and time/value go down quickly. I've done this in the past.

      While I have not used fulfillment centers (I stick to dropship) I have looked into them and I think you really need a good volume of sales for it to be worthwhile. Just think of it as shipping the orders yourself except now you are paying someone to do the work instead of doing it yourself. Great if you have a lot of sales, but if it's low volume low profit margin your not going to make money.

      So to answer your question, this is what I would do if I was you:

      1) Start out dropshipping, work on marketing and building up sales volume
      2) When you are selling enough, do some further research into fulfillment

      Hope that helps
      thanks a lot, very helpful
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  • Profile picture of the author agmccall
    Originally Posted by birclore View Post

    Hey guys,

    So the two options I have right now with my eCommerce site:

    1) Supplier/manufacturer who is willing to ship product directly to my customer (standard dropship model). Problem is the products are more expensive and worse quality (for my particular product).

    2) Purchase from a supplier/manufacturer in bulk and they will send me the order and then I have to send the orders to my customers. Very good price and high quality.

    Problem is that I would rather poke out my eyes with a fork than go to the post office every other day spending my life sending mail orders and stocking products in my house (not that there's anything wrong with people who like that).

    SO here is my question. Can I have the supplier/manufacturer send the products to some generic warehouse/fulfillment agency who will do the storing/mailing for me? Do these companies exist? How much do they usually cost or what type of volume would you need to be doing to make it worthwhile?

    thanks
    So the way I see it is you want a business but do not want to work, You are destined to failure.

    If you were to fulfill your own orders for a year or 2 then you would be able to hire people and be your own fulfillment center as well as a dropshipper yourself.

    If you do not plan on working every aspect of the business you want to start then do not plan on success
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    • Profile picture of the author birclore
      Originally Posted by agmccall View Post

      So the way I see it is you want a business but do not want to work, You are destined to failure.

      If you were to fulfill your own orders for a year or 2 then you would be able to hire people and be your own fulfillment center as well as a dropshipper yourself.

      If you do not plan on working every aspect of the business you want to start then do not plan on success
      That's a little catty. Of course I plan on working but it's not the area of the business that I am interested in or think that I can provide the most value in.

      Thanks for the input.
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    • Profile picture of the author Faisal Karim
      Originally Posted by agmccall View Post

      So the way I see it is you want a business but do not want to work, You are destined to failure.

      If you were to fulfill your own orders for a year or 2 then you would be able to hire people and be your own fulfillment center as well as a dropshipper yourself.

      If you do not plan on working every aspect of the business you want to start then do not plan on success
      Very well put.
      Absolutely the strategy I used to build a business I started from a one-bedroom apartment, which ending up having multiple employees, and which I sold later for multiple six-figures payout.
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    • Profile picture of the author pavv
      Originally Posted by agmccall View Post

      If you do not plan on working every aspect of the business you want to start then do not plan on success
      While I think it's great to understand the nitty gritty bits of business, you can't be good at everything. What if you're awesome at sales but suck at technical stuff, or vice versa? IMHO you need to take a step back and look at the bigger picture to achieve success (my definition of success anyway).
      Signature
      Let Me Build Your Ecommerce Store!

      New to eCommerce? Please take a look at my product which teaches you how to find and research a product/niche, then how to build your own store.
      [WSO]I Made $70,689.71 Sales In The Last 31 Days, Let Me Show You How To Do It Too
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    • Profile picture of the author Jesse L
      Originally Posted by agmccall View Post

      If you do not plan on working every aspect of the business you want to start then do not plan on success
      A good leader knows how to use their time where it most matters and not try and do everything themself.

      Yes, there are instances where you do have to wear many different hats, but why on Earth would you want to spend $150 worth of your time for something someone else could do at a fraction of the time and cost?
      For me, I prefer to work smart, not hard...

      JL
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  • Profile picture of the author derekwong28
    Originally Posted by birclore View Post

    Hey guys,

    So the two options I have right now with my eCommerce site:

    1) Supplier/manufacturer who is willing to ship product directly to my customer (standard dropship model). Problem is the products are more expensive and worse quality (for my particular product).

    2) Purchase from a supplier/manufacturer in bulk and they will send me the order and then I have to send the orders to my customers. Very good price and high quality.

    Problem is that I would rather poke out my eyes with a fork than go to the post office every other day spending my life sending mail orders and stocking products in my house (not that there's anything wrong with people who like that).

    SO here is my question. Can I have the supplier/manufacturer send the products to some generic warehouse/fulfillment agency who will do the storing/mailing for me? Do these companies exist? How much do they usually cost or what type of volume would you need to be doing to make it worthwhile?

    thanks
    There are a number of fullfilment houses in the US that will do it for you. Amazon offers a fulfillment service itself.

    Boost your sales with Amazon’s world-class fulfillment.
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    • Profile picture of the author Allen Lundy
      Derek is absolutely correct.

      Not only will Amazon actually store your physical products in their warehouse (you can have your drop shipper mail directly to them), they will box it, insure it and send it for you for a LOW fee compared to your own personal time involved.

      In addition, you can promote your products through Amazon and if someone purchases your product off their website, they will notify you and then complete the fullfilment.

      Just a thought.

      Originally Posted by derekwong28 View Post

      There are a number of fullfilment houses in the US that will do it for you. Amazon offers a fulfillment service itself.

      Boost your sales with Amazon's world-class fulfillment.
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      • Profile picture of the author bscbscbsc
        Thanks for the tip on Amazon, will they do that in the UK does anyone know
        Brian
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  • Profile picture of the author Virtualghost
    I think the question to ask.Is the product your product your having made by someone then fulfillment may be good.If your buying someone elses product and they offer dropshipping then dropshipping is only option as your not going to dropship to fulfillment and have them ship and charge you having added costs fee to profit margin.If it's your product ship it to yourself,rent a storage space hire someone to package and ship lot's of people need work.
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    • Profile picture of the author malia
      I've done in-house fulfillment, drop ship, fulfillment center and Amazon. Amazon is great if it works for you. Where it fails is shipping to other countries from one country. Amazon is a big company set up like a big company so if you are in the USA (or UK) forget about having them ship a package to Canada or Singapore, etc., if you are offering international shipping.

      But it's superb on price, especially shipping rates (many fulfillment centers try to get a profit on shipping), efficiency and reliability.

      If Amazon doesn't work, a fulfillment center is also good. Many different kinds, many different sizes.

      As far as shipping yourself- it is only efficient up to a point:
      1- you can spot opportunities in your shipping (for example, more efficient packaging or different shipment methods), fulfillment centers usually don't do this type of thing for you.
      2- you can pick up on issues with the product
      3- Seeing your inventory can give you ideas about better marketing, promotion or purchasing

      I don't think you should get a space and hire people. You'd be responsible for payroll taxes, workers comp because if you are shipping have scissors and other sharp objects you are then classified at "warehouse" rates instead of office rates, it doesn't take all day to ship orders (unless you have serious volume), and you don't have staffing flexibility during peak and off-peak times.

      When you're paying about 1.5-2X in fulfillment fees than you would pay for a FT employee, then it's time to consider bringing it in-house, but only if you have efficiencies to gain by doing so and don't need to invest in expensive order management software (or computers) to manage it smoothly.

      Also worth consideration is WHAT you are selling in terms of size and weight. Just figuring out what box sizes I need to fit the product, fit multiple products and still optimize dimensional weight shipping rates gives me a headache. If you need multiple box sizes, fill (peanuts, air paks), reinforced tape, special handling (i.e. oversize), it's easier to use a fulfillment center or amazon.
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  • Profile picture of the author StanTman
    @malia Thanks a lot, you got many interesting points. Indeed drop shipping is the easiest but it it also depends on what products you sell and where you ship.
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