Drop shipping - is it worth it on ebay? (need advice)

by 12 comments
Hey, I've been dropshipping for about a week or so now, and finding it really difficult to make any form of profit of items that's worth it. To put in perspective I've probably found 4 items so far that make about £5 ($7.64) profit when all the Fees, VAT etc has been included. Fees and VAT surely do take the majority of my profits out, I use eBay.

Would It be worth it setting up my own website to dropship items?
(I don't mean start a Dropshipping business, but to sell items using the drop ship method on something other than eBay)

Amazon doesn't work well for me as I'd have buy items out of my own money of which I don't have (to make like £10?) Because Amazon holds money for 14 days. Is there a way to withdraw money instantly?


regards,

Mike.
#ecommerce #advice #drop #ebay #shipping #worth
  • Profile picture of the author Steve B
    What you're talking about is kind of like selling tangible goods as an affiliate. You only get paid when you make a sale.

    But there is a difference - you have to handle the financial transaction and see that the product reaches the buyer.

    Do you really want to mess with those elements of the sale?

    For the minimal commissions you're mentioning, it's going to be a lot of work for a small profit.

    Yes, there are people making good money with drop shipping. But they have found suppliers and marketing systems that pay better dividends.

    Good luck to you.

    Steve
  • Profile picture of the author Auctiondebteliminator
    Honestly, it's all in the math.

    And before I get in the math, I have to give a bit of a disclaimer. I don't prefer droshipping on eBay, and I tend to steer people clear of dropshipping on eBay. However, there is such a huge demand for it, I still teach it - albeit reluctantly.

    Really, there are SOOOOOOOOO many more avenues of profit that they CANNOT be ignored. Why would you want to spend SO much time on items that yield NOTHING in profit?!

    It really doesn't make sense to me.

    I would rather spend my time selling FEWER items for MORE profit. But that's my beef.

    So, here's the math. (And really, numbers make all decisions)

    With many dropshippers it takes you 10 minutes to process the sale on the front-end. Then, at the end of the month (or whenever the dropshipper invoices you) it'll take another 10 minutes to process the sale.)

    Because you CANNOT pay ALL invoices in one bulk payment.

    That is NOT good accounting practices. Otherwise the dropshipper can say: "You didn't pay me for invoice # 5523 for 155.66 for Sally Boughtalot" pay me this much.

    If you just paid your invoice in bulk, you have no proof you paid it.

    You have to pay EVERY invoice one. at. a. time. for accounting purposes (and tax filing purposes as well.)

    In addition, that takes another 10 minutes.

    For a 5 dollar profit (typical) you're making 30 dollars an hour. Whoopee.

    However.

    How many items are you planning on selling per day? That's a lot of work for paltry profits.

    However, I advocate selling fewer items for larger profits. Say, 1-3 items a day for 100-200 dollars in profit. (All predictable, by the way)

    It's a LOT less work for a LOT more profit.

    I don't know why people flock towards the dropshipping model still - because it's STILL a lot of work. It's NOT 'convenient'.
    • Profile picture of the author Importexport
      Originally Posted by Auctiondebteliminator View Post

      Honestly, it's all in the math.

      And before I get in the math, I have to give a bit of a disclaimer. I don't prefer droshipping on eBay, and I tend to steer people clear of dropshipping on eBay. However, there is such a huge demand for it, I still teach it - albeit reluctantly.

      Really, there are SOOOOOOOOO many more avenues of profit that they CANNOT be ignored. Why would you want to spend SO much time on items that yield NOTHING in profit?!

      It really doesn't make sense to me.

      I would rather spend my time selling FEWER items for MORE profit. But that's my beef.

      So, here's the math. (And really, numbers make all decisions)

      With many dropshippers it takes you 10 minutes to process the sale on the front-end. Then, at the end of the month (or whenever the dropshipper invoices you) it'll take another 10 minutes to process the sale.)

      Because you CANNOT pay ALL invoices in one bulk payment.

      That is NOT good accounting practices. Otherwise the dropshipper can say: "You didn't pay me for invoice # 5523 for 155.66 for Sally Boughtalot" pay me this much.

      If you just paid your invoice in bulk, you have no proof you paid it.

      You have to pay EVERY invoice one. at. a. time. for accounting purposes (and tax filing purposes as well.)

      In addition, that takes another 10 minutes.

      For a 5 dollar profit (typical) you're making 30 dollars an hour. Whoopee.

      However.

      How many items are you planning on selling per day? That's a lot of work for paltry profits.

      However, I advocate selling fewer items for larger profits. Say, 1-3 items a day for 100-200 dollars in profit. (All predictable, by the way)

      It's a LOT less work for a LOT more profit.

      I don't know why people flock towards the dropshipping model still - because it's STILL a lot of work. It's NOT 'convenient'.
      Thanks for setting out sound economic and marketing principles people should follow rather than allowing emotion to rule their decisions. Too many just seem to follow the flock and hope they are going in the right direction.

      I am often asked how to choose products to sell on eBay. It is not my field so I can't really help, but I do wonder why people won't give serious thought to a system like yours, which does make sense to me.

      Now if I am asked how to market successfully in a B2B environment, that is a different matter, but nobody ever asks. Maybe I won't write my book on that subject after all because I see such little demand. Everyone wants to sell online.
  • Profile picture of the author adammorgan
    You'll be better off creating your own website and drop shipping from there. Did you know you can put your products on Walmart.com? Not too many people know that. Another tip is that it's worth it to sacrifice profitability in the short time to prove that you can get sales. Once you have sales under your belt, you can actually go to your dropshipper and negotiate lower price points.

    Good luck to you!
    • Profile picture of the author lastreporter
      Originally Posted by adammorgan View Post

      Did you know you can put your products on Walmart.com?
      Are you sure about this?

      Has Wal-Mart changed it policy? I thought they only allow pre-screen retailers sell on their marketplace. Do you have link to an update on Wal-Mart's policy?

      To my knowledge this is not the case, but I would love to be proved wrong. Give us a link.

      Thanks.
  • Profile picture of the author Auctiondebteliminator
    On eBay, your cost is done per ITEM as each item is calculated in its category from the market worth, minus deductions against its format.

    All of this, of course, is predicted BEFORE you sell the item as well to maximize your profits and unnecessary labor - that's not always possible with Amazon as there is no feature to predict the fair market value.

    If I can analogize that with another website, it would be MercadoLivre in Brazil. Sure items are for sale, but fair market values cannot be predicted, and maximizing a profit is more of a 'trial-and-error' through data collection and time, instead of just looking it up and knowing.

    That's another reason why I prefer eBay.

    As a disclaimer, though, I don't harangue about Amazon, or discourage it in anyway - but maximizing profit just takes longer as you have to data collect for a longer period of time to find a fair market value based on economic profit/cost curves.
  • Profile picture of the author linda dropshipping
    You'll be better off creating your own website and find some better dropshipper. a good dropshiping sulliper can help u a lot.No Stock to Buy or hold.
    • Profile picture of the author Importexport
      Originally Posted by linda dropshipping View Post

      You'll be better off creating your own website and find some better dropshipper. a good dropshiping sulliper can help u a lot.No Stock to Buy or hold.
      This dropship supplier has revived this old post to promote her business, but has clearly not even read any of the posts.

      In post #4 Auctiondebteliminator gave clear reasons why dropshipping as a business model is a poor choice.

      In the thread Looking for some product(s) to start my eCommerce I pointed out that there is a viable alternative to dropshipping and it is direct importing. The profit margins available would make the average dropshipper drool.

      Walter Hay.
      "If you think education is expensive - consider the cost of ignorance."

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