How Do Dropshippers Compete?

[needfulthingsdiscountemporium]

We dropship using various internet sources. We provide exceptional customer service and the lowest price possible to make a small profit after fees. How is it that most items we try to sell are selling for the same price as the lowest price we can find on the internet. "hypothetical ie": specific model of coffee table found for $50.00 on Amazon, Overstock and Wayfair. Selling on eBay by several sellers for $50.00 or less..... ???? How do they do that? In order for us to sell these items, we would have to charge $52.00 to break even... and that is only if our vendor doesn't charge sales tax and shipping. So how do so many sellers get the same pricing as the major vendors?

[bubbleman2010]

Drop shipping is just a suckers game the majority of participants don't have enough cash to even get a sniff of the pie just a money mule for someone farther up the food chain...

[thatsallfolks]

Maybe:

• They negotiated a better deal
• They get a bigger discount due to their volume
• They're willing to work for a smaller profit than you
• They charge more for shipping
• They're clueless

What's a "small profit"?

[needfulthingsdiscountemporium]

$3 -$5

[needfulthingsdiscountemporium]

What are you saying specifically? That our business model of dropshipping is pointless???

[needfulthingsdiscountemporium]

***TYPO*** (meant "we would have to charge approximately $60 or more to break even"

[a_c_green]

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@thatsallfolks wrote:

Maybe:

• They negotiated a better deal
• They get a bigger discount due to their volume
• They're willing to work for a smaller profit than you
• They charge more for shipping
• They're clueless

What's a "small profit"?

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Agreed... I think that if you're studying sellers who appear to be selling for even less than you do, you should also take into account how long they've been doing exactly that. They might have been circling the drain since Day 1, but have enough of a cash cushion to stagger on regardless for a while, in the hopes that Things Will Get Better.

Most likely they won't, because as a dropshipper, you're probably selling the same stuff with the same stock photos and the same stock descriptions as countless other sellers, all fighting over the same universe of potential buyers on eBay.

It's not as if you were, say, operating a McDonald's franchise in Springfield, and your nearest rival McDonald's franchise is down the road in Shelbyville someplace, so you'd have one pool of customers and Shelbyville has another. Here, as a dropshipper, you're fighting over the same pool of customers as every other dropshipper of the same items. It's like owning a McDonald's on a street containing nothing but other McDonald's. How are you supposed to get ahead with that?

[thatsallfolks]

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@needfulthingsdiscountemporium wrote:
$3 -$5

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OK, so you've sold 74 items in the past three months, which would generate a profit of around $300. To do that, you're paying for a store, and doing the work to keep around 250 listings active. One sale gone wrong would wipe out nearly an entire month's profit.

From a business perspective, evey if your prices were competitive, would it make sense to do this?

[midohioimports]

Dropshipping is also a great way to get kicked off Ebay for something like out of stock defects. Also, I don't consider it great customer service if I buy something that's supposed to be in Texas and don't receive it until August...and I would be really ticked off if In ordered something supposedly in Texas and it came from, say China. Dropshipping inventory is typically generic Chinese merchandise where the same item is often sold to the public under multiple brand names often at different price points.

[midohioimports]

For example, your laundry room organizer is currently being sold by Sam's Club with free shipping for $109....it is the EXACT same item. Same photo and everything.... except theirs is $57 less than yours. Your Hoover Carpet Scrubber is $137 at Walmart with free 2 day shipping...$60 less than you and delivered two weeks sooner.

https://www.samsclub.com/sams/8-cube-organizer-black/prod19860207.ip

https://www.walmart.com/ip/Hoover-Power-Scrub-Deluxe-Carpet-Cleaner-FH50150/23703441

[tdumonde2014]

It is if your forced to sell for a loss to compete or perhaps you need a new source for inventory. The person selling you your inventory is selling to your competitors as well, and your not all paying the same price.

[geotouloupos]

Drop shipping is dangerous and would not recomend in any way and to anyone.

Personally i would not feel OK if someone else controls my stock packaging and time of shipment.

But for your question the answer for me is simple:

seller No:1 sells 10 items (from same source) in a month.

Seller No:2 is selling 1000 items in same period (from same source).

Who can ask for better price? Seller No:2.

And example 2:

Seller 1 goes directly to source and asks for shipment only when an item sells. 

This means one by one and item with different currency rate every time.

Seller 2 buys once 1000 items and has someone to store them in source location.

This someone is doing the job when seller asks. Items bought for much less and with a different probably "on time ideal" curency rate.

Who is winning? Seller 2.

[a_c_green]

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@midohioimports wrote:

Your Hoover Carpet Scrubber is $137 at Walmart with free 2 day shipping...$60 less than you and delivered two weeks sooner.

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As the owner of two large dogs, I can safely say that if I need another carpet scrubber, I'm not going to mess about with ordering it on-line; I'm just going to drive over to Walmart and get it. Some things you, ah, just don't want to wait for.

[fuzzface50]

The others are getting the items for less than you by  some other source or by buying in quantity.

i was messaged once about this. i had a competitor asking me to raise my price to at least what he wanted because he knows i was paying $20.00 for this one item because that is what he was paying directly for it  and after ebay fees i wasn't making any money selling the item for $25.00. sorry but i was making money on it, i was buying them for $5.00 each but was buying it in bigger bulk then he was .  He couldn't believe i was only paying that much for them and basicly became his supplier for a while.

my dad would buy in quantity too at once  but took delivery whenever it was convenient for the other co. His competition wanted the same price that he got from the vendor  and was willing to buy half or a full semi load to get it.  Vendor told us about it that he kept insisting that they pay the same price as us. what the other competition didn't know was my dad orders 25 semi loads at once and not half or 1 semi at a time. then he would have a semi come in whenever they had a chance to as long as we had all 25 loads in before winter season started.  worked well  for both of us letting them deliver like that. we always had an extra guy in the shop anyways that could unload when they showed up. 

[christmasdiscountdeals]

Why do you think I would get their item to them in August??? Our metrics show that we have items delivered within 3 days on average, unless it is a freight item. Regardless, our metrics show that our buyers receive their items WELL before our "stated time frame". So, what exactly are you referring to with our being in Texas. Please advise because I don't understand your reply. Thanks!