Developing a plan of action

by tbuck
15 replies
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Hi all

This is my first post here and I just discovered warrior forums recently. I've been reading non stop trying to get as much insight as possible on how to run a successful and PROFITABLE e commerce business.

I've been an eBay top rated plus power seller for a little over 5 years. I have about 3500 feedbacks and my fb rating is 100 percent positive. I'm a thrift store seller, and generally have a few hundred items up. I deal in women's clothing.

The past couple years sales have slowly decreased to the point where I'm no longer making money to sustain beings full time ebayer. I use to make a decent living doing eBay full time, but times have changed on ebay.

I've been looking into drop shipping. I have found a few good companies through my online google searches (none that I can tell have been mentioned here which may be a good thing) and am awaiting my business license in the mail so I can apply to some of these companies.

How risky is it? I have such a great feedback rating I worry that if I suddenly list all this new product I could be flagged by ebay. I worry about customers not receiving their items or slow ship times. I don't want to risk my perfect fb score but chances are it will happen. I can't continue using ebay like I have in the past, the profits are not there. I need access to inventory and that can only be done by drop shipping (I don't have the Capitol available to buy in bulk)

Any advice for someone in my situation? Things to look ou for? What to expect when becoming a drop shipped? Auto drop ship software/services?

Thanks in advance
#action #developing #e commerce #ebay #plan
  • Profile picture of the author tbk125
    I am rather new to IM and drop shipping myself, but I believe the answers to your questions largely depend on who your supplier is. Making sure you know every step of the process perfectly before you start selling will take some of the risk away.
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  • Profile picture of the author ibas
    Respect for retaining a 100% score over 5 years and 4 digits FB's.

    As for using a third party shipper the opinions go far apart. Some swear by it and others got in a pile of the brown stuff to high they could not find a big enough shovel to dig themselves out of it.

    It depends not only on the shipper or the product - ask yourself this question:

    How much control are you willing to give away after spending 5 years establishing an account you are 100% in charge of ?
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  • Profile picture of the author Rankright
    Hello,

    EBay has definitely gone down fast in terms of quality and fees. If you have been on eBay for this long with this much feedback and sales, then you should be able to transfer those customers to a website. With an eCommerce website you can keep so much more profit for yourself.

    How would you do this? It's quite the journey but with help it can be easier.

    When you sell stuff on eBay try and ship things out with a note or link to your self-hosted eCommerce website. You can offer deals on your website that are actually LESS expensive to the buyer than eBay and will actually make you MORE money.

    You can still drop ship through your eCommerce website. By doing this gradually you'll avoid losing customers and sales while planning for the long-term.

    I could talk all day about this stuff so maybe I'll just stop here. If you're interested in talking feel free to send me a private message. Good luck!
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  • Profile picture of the author PaddyM
    Tbuck, With a mature ebay account like you have, you have many opportunities to make money. My current issue is getting high limit accounts on ebay, I have to spread out products over many accounts and it's still not enough. Send me a PM, I may have a decent offer for you.
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    • Profile picture of the author tbuck
      Thanks for all your replies!

      Rank right: I don't know how I could transfer my customers to my own site if the merchandise isn't the same. Selling used clothing on eBay and directing customers to drop ship types of merchandise would be difficult, but it's something I could try!

      Ibas: that's a concern of mine - giving up control of one or some of the aspects of doing business. But at this point I don't have much choice. The only way to minimize risk is: research, research and more research in both products and selecting distributors to work with.
      I'm not new to online selling, and obviously see glaring problems with sites like doba - so I am not planning to jump into that type of drop shipping resource. It will take a lot of time in finding a source of product with a good margin and reliable distributor.
      Paddy M: I can't PM you as I'm a new member, but feel free to PM me

      5 years ago I could easily spend 4-500 a week at a thrift and flip it to 2k a week in sales. That figure has gradually gone down hill to the point that my sales
      Have dropped to about 2-3k a month (before fees and inventory) not to mention the work involved in buying,washing, taking pics, measuring, editing pics and listing AND sourcing my inventory at thrifts. It's now too much work for such little to no profit. I haven't bought inventory in 2 weeks and I plan to just sell off what I have while switching over to a supplier of other types of merchandise.
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      • Profile picture of the author tbuck
        And paddym, I don't think I have much in the way of selling limits. Nothing is listed on my seller page in regards to limits. However from what I've heard " everyone has limits" so I assume I haven't reached mine yet, they must be just higher in relation to my listing habits and sales etc.
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  • Profile picture of the author GregB123
    Hello tbuck, I think there may be another way of looking at your problem. Since you have already proven yourself to be a capable online retailer, you should not fear looking for an additional way to do online retail. You already have the skills and experience and proven drive.

    Keep your current eBay store rolling to cover your basic living expenses, but start an additional online retail opportunity.

    There are many possibilities... It may be in clothing, or it may not. You must already have the ability quickly photograph and describe and package individual unique items, so it could be another line of used items. Or it could be brand new items, either stocked or drop-shipped.

    You should consider starting a completely new eBay store to sell the drop-shipped clothing you found (which would protect your current store from bad feedback) AND AT THE SAME TIME start a conventional ecommerce website to sell the same exact drop-shipped clothing. If the website succeeds, you could delete the second eBay store.

    I have two ecommerce websites, and used to do eBay. We started the first store on a shoestring, then used an eBay shop for a year just to help keep food on the table. After the first website was steady and successful, we added a second completely unrelated store. So I am a fan of diversifying since it provides some protection to changes in the market. But if clothing is where your passion and skill is, then it is fine to diversify within the clothing realm. Doing both new and used is pretty good diversification.

    Good luck!
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    • Profile picture of the author Daniel J
      Originally Posted by GregB123 View Post

      Keep your current eBay store rolling to cover your basic living expenses, but start an additional online retail opportunity.
      Sorry to hear that sales are down. Greg123 has a good point- if it were me, I wouldn't abandon what you've worked so hard for. Keep it going as long as you can, but create some additional income streams. I would highly recommend looking into selling on Amazon.com. They have a program called "FBA" (fulfillment by Amazon) that if used correctly, can create another income stream virtually on "autopilot". This would allow you to still focus on thrift store shopping for Ebay. In fact, the used market is pretty huge on Amazon as well! There are lots of sellers doing very well with used books and media as well as used toys and other general merchandise. It's worth looking into!

      Personally, I don't do a lot of drop shipping due to the low profits, but a girl who works for me as an Ebay trading assistant runs her own ebay store this way. She says the key is finding suppliers that are RELIABLE. Personally, I would build up the capital you need and buy inventory, ship it to Amazon in bulk and let them do the boxing, shipping, returns and customer service. I know you can't PM, but if you need help, you can contact me on my blog (check the signature). Good luck!
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      • Profile picture of the author tbuck
        GregB123 & Daniel: I am definitely going to keep my eBay store up, while unloading the merchandise I have. For me, buying inventory, and the time it takes to list it, isn't worth the small profits that ebay offers at this point in time. It takes me about a week to source and list approx 100 items. It takes a while to find that amount, wash, measure, take pictures etc. Thrift Stores are raising their prices, and items are going for much less on Ebay than what they did 5 years ago. hence, with all the work involved, I'm working for less than minimum wage lately. My time is more valuable, than to continue doing what I've been doing. As far as living expenses: I solved that with getting a second job - I'm waiting tables at the moment and have been doing so since the summer. That's how bad eBay has gotten. Finding a second job was what I needed to do.

        I do have 2 distributors that I've found that are somewhat local, and offer pick up. They do have minimum orders - approx 200 dollars which is quite low, and something I could swing. I thought it would probably be beneficial to start this way. I could list from their catalog, and when a sale comes in, pick up the merchandise myself and ship it. Or buy some merchandise to start, then list. This would solve a couple issues: I would be dealing one on one with the warehouse - getting the product I am ordering without worrying that the distributor is playing games or is unreliable. I would have more control on the product getting to the buyer in the appropriate amount of time, I would be getting the product for less cost than it would cost for it to be drop shipped - and obviously be able to build a more personal relationship with the distributor (if they met me in person, if I was there a couple times a week picking up product). This would also save on the cost of shipping wholesale goods (if I ordered their minimum quantity, and picked it up instead of having it shipped to my home). They have many products that are on MAP pricing - which is something I would like to stick with.

        What do you think of this method, in minimizing risk?
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        • Profile picture of the author GregB123
          Hi tbuck. That sounds like a good plan. Having control over your items is very valuable. As long as they are items that will sell well online. Have you scoped out the competition? Maybe placed an order with them and been a chatty customer who slips in a few questions like "About how many of these do you sell each week?" , "Who buys from you?" etc...
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  • Profile picture of the author KentyMac
    I would suggest "testing" a few of the items on Amazon and seeing how they sell. If you find a few winners, then you could purchase a larger stock and use FBA as Daniel J suggested. I like FBA for several reasons including:

    1. They store all of my inventory for me for pennies (free for the first 30 days).
    2. They handle the entire order process - taking the order, processing payments, shipping the order, handling customer service, dealing with any returns, etc.
    3. I get a check every 2 weeks.

    So I basically ship ALL of inventory in to Amazon, set my prices, and they take care of the rest. No more handling individual orders! It's beautiful!

    The other advantage, is that once the items are in Amazon's warehouses you can list them on multiple channels such as eBay, Buy.com, Rakuten, Sears.com, etc. and have Amazon fulfill them using Multi-Channel Fulfillment. For example, you might sell an item on eBay or Buy.com but actually have Amazon ship it for you. The advantage here is you get to use Amazon's deeply discounted shipping rates. They do not charge a final value fee, just a flat weight-based fee. I've done this to increase my exposure on multiple channels while still centralizing all of my inventory.

    Hope this helps!
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    • Profile picture of the author tbuck
      I just wanted to give all of you an update.

      I've been searching high and low for drop shipping companies, I signed up for a few just to see pricing - and while the product selection looks great, the margin's are slim to none. Selling something for 250, just to barely make 10 dollars seems like too much risk if there is a problem with the product (having to go through the returns process etc) I may list a few things just to test the waters, but nothing that would put a dent in income that needs to be made.

      What I DID DO - yesterday I bought my first bulk wholesale lot of store returns. I got 250 items for around 480 dollars, I have to pick the lot up at the warehouse in the next few days - so that saves on the shipping costs. I looked at the manifest before purchasing and went though each item and checked the completed auctions on ebay to determine selling price (if used), also current auctions to determine competition. It looks like on the surface I can easily price most items between 10-12 dollars, and some much higher.

      I did buy things that are already in a saturated market (I know) branded cell phone cases, branded printer ink, branded ear phones etc - so it wont be easy to unload things quickly, but I can easily undercut my competition.

      I know I bought customer returns - meaning some stuff may not be sellable as I don't know the condition of each item. But I think my source gets good reviews so it shouldn't be a loss.

      I figured I would test the waters this way.

      Taking pics of these items is much easier than clothing that's for sure! No washing, ironing and measurements - so it will save me a lot of time!

      Plus I like the fact that I have complete control in shipping and the description.

      I will be listing this stuff next week, I'll let you know how it goes!

      And Kenty - I will put some stuff on Amazon, although I have to figure out labeling for FBA. The STR if I do FBA would be much higher than selling as merchant fulfilled on Amazon thats for sure!

      THanks again for all your responses and advice!

      I'm not really sure --after all my research - that drop shipping is for me.
      Thanks again
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  • Profile picture of the author Daniel J
    Hi tbuck,
    Sorry I haven't been on the forum for several days. I'm quite impressed with how hard you work at this! It sounds though, like working this much for such little profit could end up burning you out fast! I've only drop shipped a couple of products in my "online selling career" and only when it made sense, but yes, you'll find in most cases, the profit margins are horrible with that type of business.

    Buying returns/liquidations/closeouts can be a GREAT opportunity, but again, it's a lot of manual work sifting and sorting through boxes or pallets of stuff- some of which you'll probably end up throwing away. I do some liquidation stuff, but only with brand new items. I find that selling new sealed items is the least labor intensive model and leads to the least amount of customer complaints and feedback.

    Have you considered retail arbitrage? The business model can be really lucrative and if you use FBA, it will save you a lot of time! Hope this helps!
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    • Profile picture of the author tbuck
      Originally Posted by Daniel J View Post

      Hi tbuck,
      Sorry I haven't been on the forum for several days. I'm quite impressed with how hard you work at this! It sounds though, like working this much for such little profit could end up burning you out fast! I've only drop shipped a couple of products in my "online selling career" and only when it made sense, but yes, you'll find in most cases, the profit margins are horrible with that type of business.

      Buying returns/liquidations/closeouts can be a GREAT opportunity, but again, it's a lot of manual work sifting and sorting through boxes or pallets of stuff- some of which you'll probably end up throwing away. I do some liquidation stuff, but only with brand new items. I find that selling new sealed items is the least labor intensive model and leads to the least amount of customer complaints and feedback.

      Have you considered retail arbitrage? The business model can be really lucrative and if you use FBA, it will save you a lot of time! Hope this helps!
      THanks Daniel!

      Yes I've considered retail arbitrage, but have yet to put that plan in place. I want to be able to have more of a consistent supply of inventory. Retail arbitrage definitely can make you money! It's just a question of being able to score the right product - frequently.

      I agree about new items. I'll get my first lot of store returns on Tuesday (I hope there are not too many surprises with the lot - I know the condition is "returns" which can mean anything really. I'm not expecting new product)

      But in reference to buying new - I am purchasing a new lot tonight which should do well. About 80 items that are "in demand" - new in box etc.

      I initially didn't have the funds to start purchasing wholesale, but I decided I better "find them"! So I've been picking up extra shifts waiting tables so I could prep/save for my first whole sale order. That is HOW MUCH I didn't feel "right" about drop shipping (not that there is anything wrong with it - it's just I am a control freak when it comes to my Ebay ID/reputation)

      Once things are listed, I hope to get the ball rolling where I am able to purchase more.
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  • Profile picture of the author bigcat1967
    Just curious, why is eBay the place not to be? I would stick to it and keep grinding.
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