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Problem with shipping/getting started.

by Audarah
6 replies
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I was wondering if someone could lead me in the right direction here with words or even with a WSO. I am SO confused.
Ok, so here is my situation. I have my store up in one of three niches, got the back end almost completely done and understood ( what a steep learning curve that was), and I have a list of prices from one of my suppliers. Since I am just starting out, I am pretty much just putting any supplier products on there right now, with the hopes of getting approved by the bigger brands once they see my website. So, this is all new to me and I am super confused ( either that, or thinking the correct thing).

I get the list, start the pricing and product sourcing. Peeking on google and on google shopping to see what other people are selling it for, to see if I can beat that. Keep in mind, WHY in the world I picked such a niche with MANY products for my first store is beyond me- butttt that is kind of what I did. So, I have MANY products in this niche. The thought of pricing of them is exhausting- but the good news is, no matter what product from my niche I type in, I keep pulling up the same stores as competition ( sometimes even in google shopping, versus just google).

BUT, one of those competitors I just CANNOT beat. I was looking at product X for example. From my distributor, that product is 14.50. The shipping on that product is 13.98 ( yeah makes no sense) for a two lb product. That right there totaled is 28.48. This site was selling that product for 27.49! (included shipping) I mean they already have it beat right there. Knowing that, I had to take a real good look at my distributor again (its simpledistributors.com). Almost 14.00 bucks to ship a two pound product GROUND? REALLY?

My general guess then is that the owner of this website with whom I cant seem to beat his prices- do you all think he has a cheaper wholesaler/getting the same products somewhere else cheaper? I'd like to know where because I have searched my rear end off.

Can I beg attention for another question here? Say I have product x,y,z on my store. Someone comes to my store and they order all three products. Little do they know, all three products are from three different wholesalers. I do NOT want to charge three different shipping prices to the customer, but I have to have that cost figured. So in my opinion, I want to just have the cost of the product INCLUDE the cost of shipping so that we do not run into this fiasco. I dont want to pee off any potential customers. I have actually had that happen to me a few times... went to a site

ordered a bunch of thing and then seen more than one shipping charge. I left that site and went elsewhere where I ended up not having the same problem. I think that generally is very bad practice, either charge one shipping price or wrap it up in the cost.

Am I ok in thinking this or am I REALLY far out there in left field? Also, if anyone knows wholesalers cheaper than simpledistributors ( who also dont seem to have a CVS file), please let me know! I am sourcing my butt off here, but just to get started, I have to have some initial products on the site and I am not sure that their shipping price ( plus 2.50 "handling" fee) is reasonable at all.

I just need to know I am going in the right direction with my thinking here. Anyone?
#problem #shipping or getting #started
  • Profile picture of the author Silas Hart
    Regarding the competitor pricing and shipping.

    Your "wholesale distributor" is probably a 2nd tier distributor/dropshipper, which means they have found the original company who is selling these goods, then they take those goods put them on a new website and offer the goods with a dropshipping option. It's a zero risk business model for them. To put it simply, your distributor/dropshipper has pretty high prices.

    99% of all "wholesalers" who don't require a minimum order quantity are guys who order the items for you and send your order to the actually company who holds the inventory on these, and then forwards them either your address or your customers address and then the package is sent by the actual distributor. The Big and Tall leather biker jacket below is likely purchased in a low MOQ (due to its size) of around 10 or up to 50, for around $20 - $30 USD - I only quote these because I've seen similar information from suppliers here in China.

    Something such as this:
    Big and Tall Leather Jacket (Size: 50) - Simple Distributors - that is a retail price.

    Now regarding shipping. With dropshipping, which is what you are doing, you are at the mercy of shipping fees. FedEx for example, is so big because they work a lot with businesses to offer reduced shipping. I don't know off of the top of my head what I pay for a 2 lb package, but it isn't $14.00. You will never be able to take advantage of lower shipping rates offered by shipping companies - which could put you in a price range to undercut your competition, because you don't ship your own products.

    This kind of ties in with your 2nd question regarding combined shipping. Unfortunately, you would Have to charge a customer for shipping 3 times. This is one of the other things with dropshipping from different distributors. In fact, I am willing to bet that even though a customer might purchase 3 of the same item from the same distributor, they would still have to pay 3x the shipping because these items are not actually being shipped from the distributor and have the company has factored their profit into the amount of shipping.
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    • Profile picture of the author Audarah
      Thank you for the information! When you say:

      "Your "wholesale distributor" is probably a 2nd tier distributor/dropshipper, which means they have found the original company who is selling these goods." ... I assuming that when you say they have found the original company selling these goods that they found a 1st tier wholesaler, bought from them and then resold? Which of course that would explain the high price. Ugh, Im sort of getting confused but sort of not.

      99% of all "wholesalers" who don't require a minimum order quantity are guys who order the items for you and send your order to the actually company who holds the inventory on these.

      Ok, now I am getting it.

      Something such as this:
      Big and Tall Leather Jacket (Size: 50) - Simple Distributors - that is a retail price.
      Which is why I am having such a hard time with pricing. Basically my distributor isnt all that great, for the reasons you listed above.

      This kind of ties in with your 2nd question regarding combined shipping. Unfortunately, you would Have to charge a customer for shipping 3 times. This is one of the other things with dropshipping from different distributors. In fact, I am willing to bet that even though a customer might purchase 3 of the same item from the same distributor, they would still have to pay 3x the shipping because these items are not actually being shipped from the distributor and have the company has factored their profit into the amount of shipping.

      Yikes- and how do I get around this? Either find MOQ Distributors or go straight to the bigger companies?

      Someone else said is there high end products in my niche? There can be, but it would take a heck of a lot of work, which I am not afraid to do. When you say if I focus on price I am going to hit bottom what do you mean by that? Shouldnt I be the one offering a better price, or offer a higher price but say why my higher price should be considered first ( and better? )

      Gonna do some more research, think I am still a bit confused here!
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      • Profile picture of the author Julia Russo
        Find other drop shippers for your product--then settle on fewer products and have them basically with the SAME drop shipper instead of 3. If the products are significantly different and customers are not likely to buy them together, you shouldn't have a big problem if you have more than one drop shipper but by having too many sources for the products on your site, you will encounter multiple shipping charges.

        You are new at this so I hesitate to recommend that you have more than one site and separate your product lines--that is what I would do--but you need to start simple and let the learning curve smooth out.
        Signature
        Wholesale/drop ship tutorials--LEARN HOW and where to get drop shippers
        http://www.storkandveil.com/wholesale-drop-ship-info/
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      • Profile picture of the author Importexport
        Originally Posted by Audarah View Post


        Ok, now I am getting it.
        Something such as this:
        Big and Tall Leather Jacket (Size: 50) - Simple Distributors - that is a retail price.
        Which is why I am having such a hard time with pricing. Basically my distributor isnt all that great, for the reasons you listed above.

        Yikes- and how do I get around this? Either find MOQ Distributors or go straight to the bigger companies?

        Gonna do some more research, think I am still a bit confused here!
        Hi Audarah,
        Just a quick word of warning: Earlier today I posted on the thread: "Is Worldwide Brands Worth The $299 Membership Fee?" and just happened to mention leather jackets. Probably worth your while checking it out, because some suppliers describe their product as leather, when it is actually plastic.

        I would suggest you consider a small niche, preferably in a field you know a lot about. Is there any subject you could talk about for 10 minutes without notes because you have a passion for it? Have you been employed in any industry?

        Just think about what items are used in your area of interest, or the industry that you know. Ever had trouble getting supplies, or has your boss had that problem? Presto! You have a niche product.

        Dropshippers and wholesalers will still take a lot of the profit that you could make if you bought direct from the factory, that is why I always bought straight from the factory. Don't let people scare you into thinking you have to buy huge quantities and that importing is too complex. My book written from 22 years experience will show you otherwise.

        I have been forced to retire because of heart surgery, so I sold my importing business, but it gave me huge profits compared to the best I have seen quoted by advocates of dropshipping.

        The best I ever did was $18,000 net profit on a $21,000 sale, but that was exceptional and never repeated. Usually I was happy to make $60 on a $100 sale, and there were plenty of those, although I often did better than that. Many shipments valued at $100 - $500 came in, so don't believe it when people tell you that you have to order big quantities.
        Signature
        Use emotions and perceptions to build a great brand. Ask me about my book LabelsThatExploit. For safe sourcing and easy importing from 41 countries globally, see https://provenglobalsourcing.com
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        • Profile picture of the author Audarah
          Thank you guys again for all your help. I have to say I greatly admire the people that can do this. I am sure I am right now where you all were when you first started and I am sure it came easier to alot of people. It does seem to come easy to me in some vices, but the only thing hanging me up is what salas had said- I keep running into 2nd tier distributoors or their prices are just too high so I will try and try again. Plastic? Oh wow! I would never want to see that happen to my customer. Being one myself I would be so highly upset. My plan is to start small like this and hopefully be able to import some day with some of the profits. Again, I have to remind myself to take baby steps and not go all gung ho. My industries are in business, believe it or not. have a paralegal degree, business book keeping degree and business sales marketing and management degree- so this is sort of up my alley. It interests me, and I like trying my hand at things but never at the expense of the customer. I want to be able to provide quality goods at a reasonable price, not junk at an extrodinarry price!
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  • Profile picture of the author DWolfe
    I would recommend looking around this section of the Fourm and read from the posters that make money here. Instead of buying WSO's I would read recommend doing a search on MAP Price in this section.

    Trying to compete on price is going to be a race to the bottom. Try to foucus on only a few products in your niche. Have you thought about the High End products in your niche? You could be come the expert on these few products and charge a higher price.
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