Question about Dropshipping fees....

13 replies
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Hey guys,

I found a niche I'm interested in possibly doing drop-shipping with, and am in touch with a potential partner, but wanted to ask you guys about some of what he's asking to see if these "requirements" are normal.....

- He is wanting "drop-shipping fees" of 20% over their "wholesale" price....but this includes international shipping to the customer. (shipping for this product should not be very much, as the product is very light-weight, and pretty small.) The typical product sale price should be around $50-$75 (not wholesale price).

- He also wants me to sign a letter of understanding before he will even show me the "wholesale" pricing of their products.......I'm really not comfortable signing this, since it's basically an agreement that I'm going to work with them. Should I have to sign something like this just to see pricing? I would understand if it was just a non-disclosure agreement or something like that....

- Also within the letter of understanding, it states that they want me to pay a ~$1200 deposit to the company up front that they will "draw against" for customer orders and fullfillment services. Is this a normal practice? I feel leary about making a $1200 deposit to a company in another country....though I do kind of understand the reasoning behind this....I am just curious as to if this is a normal practice in the Dropshipping arena.

Any thoughts that anyone with some experience with this stuff is willing to share would be very much appreciated!!
#dropshipping #fees #question
  • Profile picture of the author seminars82
    Hi, when you are working with a dropshipping companies, you are actually helping them to promote their products.

    So far, almost all the dropshippers I have contacted with never ask for such a high fee. Are they offering some sort of franchising which demands such a high initial fee to setup.

    I suggest to verify the company and how many years they have in operation and what the customers say about them. Sounds fishy.

    Jerry
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  • Profile picture of the author OnlineStoreHelp
    I wouldn't put a deposit down. Now, 20% fee is not bad if it includes the international shipping as that can get expensive. If it is 20% plus shipping costs, that could get expensive. I would tell them I am more then happy to put a credit card down but never would I put a deposit down. This is not MLM!
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  • Profile picture of the author pavv
    Some suppliers might also get you to apply for 30 days term credit to ensure they are not left short. That is however a big deposit they are asking for, you really need to see their pricing first before you can ensure it will even be profitable so I would look for another supplier then.
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  • I agree with Julia Russo on this one.

    Always look for 'true dropshippers' that make money on the markup of their products price correctly to the market trend and data.

    When they charge for memberships and deposits, it's an automatics 'no go' for me.

    They are stuck in 2002-2007 in that pricing model that didn't work.

    Many times a dropshipper WILL have a processing charge (which I still hate, and don't charge myself, but it does happen with others) but this is just worked into your cost to acquire per unit when you're doing your profit margin estimation calculation against the markets.

    (Just an fyi)
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  • I respectfully disagree, OnlineStoreHelp,

    I think 'making money on the shipping' is quite unethical.

    A lot of times people say 'well, it's 'HANDLING' that you're paying for --- so that's why it's higher and you get to pay it.

    Frankly, 'handling' is an outdated charge from the Pony Express days when it was a valid charge.

    Back then, when you sent mail you actually had to pay for the food and lodging and security of the mail being sent by the courier. Nowadays --- that's not the case. 'Handling' is now an outdated sales gimmick used to gouge consumers out of more money.

    Making money off the sale of the product is fine, and ethical. I got rid of my first dropshipper when I found he was gouging me in shipping charges over the top of his product price.

    (He didn't like when I left because of that and apologized profusely--- like a girl begging for her boyfriend back)
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    • Profile picture of the author Julia Russo
      Don't complain about small drop shipping fees--we charge $2 to cover the cost of the box, packing material, tape, MY TIME PACKING the box. This Is NOT included in the price and should not be. Each product has to have a calculation for markup and the BOX + is a separate item (aka:fee).
      If you see a fee that is unreasonable to cover the S&H, then don't use that drop shipper. But do understand that shipping and HANDLING is a legitimate cost that has to be covered. And paying up front to draw upon money on deposit has to be a scam.
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      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 kurtbai
    it smells fishy, mate! If your product is not too exotic, you should be able to find alternative dropshippers that are legit, i.e. low or no dropship fees, and definitely no deposit...
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  • Profile picture of the author Cnklin
    You can find some dropshippers that ask for no additional charges.There are many sites that provide dropshipping service without any money,such as ankaka
    You can create a free account at this site and only pay for a product after you have already completed a sale and collected the money from your customer.
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  • Profile picture of the author Kevinhoss
    I haven't came across any dropshipping company that asks for a deposit. Do a background check first.
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    • Profile picture of the author Julia Russo
      Just FYI--to those who have come looking for me to drop ship--my apologies for the broken link--we had an extra character in the address. Fixed now so check the signature link again for more info.
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      Wholesale/drop ship tutorials--LEARN HOW and where to get drop shippers
      http://www.storkandveil.com/wholesale-drop-ship-info/
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