Ecommerce Still Going Strong?

even retailers do that with private label products, once a branded product sells well on the shelf, out pops an identical package next to it with the store brand on it, at a cheaper price.

the only ways you can protect yourself is try to get a written agreement from drop ship supplier in hopes to deter them. tough to do. Buy your own product through them so you are on the list so you can see if they start direct marketing to your list. As mentioned take on inventory, or if price could handle extra shipping charges, have them ship to your location, then forward on to customer

What he said. Spend money to make money. Genius answer.

This is precisely what I tell would-be retailers. The entire dropshipping/reselling industry strikes me as "superficial" and very fragile- you'll get easily wiped out by a wave of technology. You have no real scarcity power, and you're not particularly providing a useful service.

I suppose people's motivations vary. But I think it's so important to have some conviction behind whatever it is you're selling. I like Seth Godin's heuristic: Will they miss you when you're gone? If not, why bother, really?

The figures you hear in the media are always gross- you have to dig into the financials to see the net revenue, but I disagree with the notion that only the net revenue matters.

First, it depends on how you allocate the cash. I had a company I sold in 2005 that grossed a little over $750k a year but technically never turned a profit. Was that business a "failure"? No- because out of that $750k I also paid myself a $130k a year salary, along with salaries for my staff, and rolled every extra penny back into marketing. And when it was acquired by a larger company, who already had their own offices, could absorb the company's technology requirements into their own infrastructure, and already had people on payroll to do the work MY operating costs didn't matter to them- all they cared about was the gross income because for THEM it was all profit.

So don't get hung up on gross vs net figures, gross figures are more important. Remember even the oil companies only actually "profit" about 26 cents on a $100 barrel of oil. That sounds like a terrible deal for them, until you do the math and realize they make that 26 cents about 18 million times a day.

And the companies that "operate at a loss" can sometimes be due to accounting requirements and the way revenue is booked. Especially with telco and internet providers or any subscription services, if you accept any kind of prepayment you can't book that revenue until after the service they paid for has been fulfilled. A company like Magicjack or nettalk that sells annual prepaid phone service can have millions of dollars sitting in the bank that they can use to run their business, but they can't actually put it on the books as income until the service has been rendered. If a million people signed up and paid them $30 today they can't put down $30 million on the books, they can only log $2.5 million per month for the next 12 months, even though there is $30 million in the bank. So what can appear to be a loss is really just deferred revenue.