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Drop shipping vs UPS, FEDEX, & USPS

by johnnyblaze1009
4 replies
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So I been doing some research on this drop shipping & I'm trying to see the advantage of doing that rather than getting the product yourself and mail it yourself. Some of these guys on ebay/amazon are selling the product for a very low price, use drop shipping. I can't see them making profit for such a low sale price combine with website fees. Now a person using the postal system pay the shipping fee or have the customer pay but if product is sold at a high reasonable price, I would think the margin would be better or break even (which why do you want to break even) If there is a problem like, long wait, damaged or a return:rolleyes:, you can take care it yourself, other than the possible red flag from amazon or ebay. I know I'm new here but maybe someone could explain it s little bit better, than me......
#drop #fedex #shipping #ups #usps
  • Profile picture of the author bawel
    did you make dissertation or thesis johnny? lol..... research market about drop shipping vs fedex....... that's very nice,,... but dropshipping means individual different with fedex (company )

    responsibilty both of them so far..... if your stuff broken, payment , and many things
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  • Profile picture of the author OnlineStoreHelp
    Originally Posted by johnnyblaze1009 View Post

    So I been doing some research on this drop shipping & I'm trying to see the advantage of doing that rather than getting the product yourself and mail it yourself. Some of these guys on ebay/amazon are selling the product for a very low price, use drop shipping. I can't see them making profit for such a low sale price combine with website fees. Now a person using the postal system pay the shipping fee or have the customer pay but if product is sold at a high reasonable price, I would think the margin would be better or break even (which why do you want to break even) If there is a problem like, long wait, damaged or a return:rolleyes:, you can take care it yourself, other than the possible red flag from amazon or ebay. I know I'm new here but maybe someone could explain it s little bit better, than me......
    You will almost always make a better sales margin when you buy inventory versus drop shipping. Just the volume breaks a lone can be worthwhile at times.

    The issue you have is then buying loads of inventory that may or may not sell, as well as having to buy multiple variations. Can you imagine (as an example) 10 iPhone 5 cases with 5 colors each, you are looking at 50 different options and then buying 5 units each of those, next thing you know, you are putting real money into inventory. And that is for cheap products. Now if your average selling price is $100 or higher, your out of pocket for inventory gets much higher.

    Add on top of this you have storage and shipping issues. Do you have an extra room to store products? A storage unit? Then many drop shippers have better rates through Fed Ex and UPS due to their volume.

    I think many drop shippers want to get to a point where they can eventually take inventory on at least some of their products they sell but even some brick and mortar stores here use drop shippers to "special order" products for their customers.

    Hope this helps.

    edit: I know this doesn't capture fulfillment services but that is another conversation all together...
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    • Profile picture of the author JadeAllen
      Speaking of the USPS, the U.S. USPS continues to be wracked by monetary problems, as the agency is regularly short on funds. The USPS fund payment, a $5.5 billion deposit, is going to be defaulted on and the agency is scheduled to run completely out of funds later this year.
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