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?

[thatsallfolks]

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@christmasdiscountdeals wrote:

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!

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That response was about dropshippers in general, not you in particular.

[christmasdiscountdeals]

Thank you for replying... truly appreciate it! However, we don't allow ourselves to get caught with OOS ever! We manually check our inventory 3 times a day, plus we use a third party monitoring system that also checks stock from our vendors 3 times a day. Please reply again if you actually have a response that is relavent to my query.  Again, thank you for taking the time to respond in the first place. 

[christmasdiscountdeals]

Thank you for your reply... truly appreciate it! However, how is it you think that our delivery is going to take TWO WEEKS longer than if the buyer ordered it from Walmart themselves? Our delivery time is EXACTLY the same every time. Just FYI....

[christmasdiscountdeals]

Oh... OK! LoL!!!

[midohioimports]

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@christmasdiscountdeals wrote:

Why do you think I would get their item to them in August???

Because that's the delivery timeframe I was shown when I clicked on your listings.

So, what exactly are you referring to with our being in Texas. Please advise because I don't understand your reply. Thanks!

Texas is the location shown for the items I clicked on. The lengthy shipping/handling time made me wonder if the items were even in the US. 

You need to have the actual location of the items you're selling in the listing. If you are in Texas and the items are elsewhere, the location in the listing shouldn't say Texas.

As far as having a relevant response to your question, that was covered multiple times by multiple people. What ISN'T relevant here is your "business plan", since you invited the snark.

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[goodluckselling]

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@needfulthingsdiscountemporium wrote:

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?

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Not all sellers on the same item like you described are drop shippers.  I would think nearly every credible drop shipping company also have a wholesale division. 

Registered businesses with the proper tax ID's can buy at much lower wholesale prices than a drop shipper.  We also can negotiate dating on our wholesale purchases and probably also get preferred treatment at the warehouse end to get our orders out quicker than a dropshipper.   I might go so far as to say we also might get untouched inventory send to us versus opened, returns and or seconds stock that is commonly used for drop shipper orders.

Good Luck Selling!

[994john]

I would never dropship.

I think it is true that there is a sucker born everyday.

Is there a reason my product @ $15. is still unsold when another seller sold one identical @ $50. ?

[muttlymob]

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.

Seems like your real question should be:  why are you trying to sell something that is so widely available at a price that is already at or below what you can make a profit?

[luckythewinner]

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@needfulthingsdiscountemporium wrote:

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. 

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Let's say your dropshipper acquires an item for $45, sells it to you for $60, and you sell it on eBay for $75.  

What is to stop your dropshipper from also selling it on eBay, and charging just $59?  The more people he can convince to list it for $75, the better his listing looks in comparison.  

He has the inventory, he has better pricing, and he knows how to pack and ship. You may be competing against your own sources 🙂

[vintagecraze50]

Dropshipping is THE WAY for many sellers, includinf some major dept stores type sellers. It is a wave of the future for retail sales. NPR had a program a few days agao focusing on how these retail stores are closing their brick and mortar units in favor of dropshipping items without a physical store where they have to stock and buy items before they sell them.  Many factors in turning a decent profit. Some depend on your dropshippers prices and how much of a discount you can get from them by buying a certain amount of product up front. Negotiate and negotiate more. Shipping costs another issue. Profit margain for each item. Some make it up in sheer mega volume sales.

[annabelles-attic]

Someone once said charge three to five times your price you paid including fees. I usually go four times. Works for me. Sometimes I get much more. Just depends on the item. I could never survive or make it worthwhile with a small profit.

[a_c_green]

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@vintagecraze50 wrote:

Dropshipping is THE WAY for many sellers, including some major dept stores type sellers. It is a wave of the future for retail sales. 

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It's not the dropshipping process that's at fault here; it's the fact that dropshipping companies are simply recruiting as many sellers as possible to all compete against each other. The dropshipper is charging them all the same price for whatever they manage to sell; it's the sellers who are struggling to turn a profit.

If you're a major department store with a warehouse full of stuff to unload and you've set up your own (singular) dropshipping account on eBay (such as the Saks Fifth Avenue one we were discussing this morning), that's fine, because you are your own dropship operation.

It's different if you own the warehouse full of stuff, but you then go out to try and recruit umpty-hundred others to sell your stuff for you using their own eBay accounts. You may be able to unload your stuff fairly quickly that way, but you'll enjoy a lot more profit than all your interfighting, intercompeting subordinates tussling over the same universe of buyers. There's a saying I'm fond of: "It's more fun to own the casino." 

[fiftee5chevee]

I bought 100 Manila 12x9 envelopes from an Amazon listing...11 bucks...w/free shipping. a great deal . the seller shipped them very fast. about 2 days....it was delivered from SAM's Club. So I guess they are using their SAMS Membership to DropShip. how cool is that?...my question though; what did they profit ...about 50 cents????

[yuzuha]

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@a_c_green wrote:

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@vintagecraze50 wrote:

Dropshipping is THE WAY for many sellers, including some major dept stores type sellers. It is a wave of the future for retail sales. 

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It's not the dropshipping process that's at fault here; it's the fact that dropshipping companies are simply recruiting as many sellers as possible to all compete against each other. The dropshipper is charging them all the same price for whatever they manage to sell; it's the sellers who are struggling to turn a profit.

If you're a major department store with a warehouse full of stuff to unload and you've set up your own (singular) dropshipping account on eBay (such as the Saks Fifth Avenue one we were discussing this morning), that's fine, because you are your own dropship operation.

It's different if you own the warehouse full of stuff, but you then go out to try and recruit umpty-hundred others to sell your stuff for you using their own eBay accounts. You may be able to unload your stuff fairly quickly that way, but you'll enjoy a lot more profit than all your interfighting, intercompeting subordinates tussling over the same universe of buyers. There's a saying I'm fond of: "It's more fun to own the casino." 

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That also isn't really dropshipping, either-- if you own the warehouse and the goods, you're just operating a standard mail-order business without a physical storefront.  Dropshipping generally implies ordering through a middleman (unless I'm mistaken) and having them do the shipping to the buyer without you ever being in possession of the item in question.

[grasshopperx]

Giggle 50 cents. Is that after the ebay fees have been taking out? Gosh I cant see how sellers stay on here, pay the fees, put up with the hassles and make such tiny profits. Unless they are doing mass volume. but even still, factor in their time in listing the item, the tracking, etc. It still is alot of WORK