Dropshipping - Good or Bad?

[coxdabd]

I'm in the process of starting a childrenswear business online. My original plan was to purchase all of the stock, etc and then start trading. Though I have recently found a drop-shipping business. They ship the products for me.

Is this something which could work well or is it something you'd recommend me to stay well clear of?

 

[brownie]

Do the maths, can you make a profit?

 

[coxdabd]

Yes of course I make a profit - why else would I be starting a business?

I'm trying to determine if the general idea of drop-shipping is looked upon as a really good solution of something to avoid.

 

[brownie]

Businesses have used the principle of drop shipping for years so obviously it works.

Here you go, the search function must have been broken earlier when you tried it;

http://www.ukbusinessforums.co.uk/forums/search.php?searchid=4578178

 

I'm in the process of starting a childrenswear business online. My original plan was to purchase all of the stock, etc and then start trading. Though I have recently found a drop-shipping business. They ship the products for me.

Is this something which could work well or is it something you'd recommend me to stay well clear of?

It can work very well if you choose the right product ,rhe right dropshipper and the margins are decent.

Earl

 

[coxdabd]

Thank you Paul.

Though I think you misread my topic.

Your manor is both inspiring and incredibly helpful.

Regards, Kriss.

 

[coxdabd]

Hi Earl,

Thank you for your post. Indeed, they appeal to me because I won't need to hold any stock, resolving the issue of having to put items difficult to sell 'In Clearance'.

I believe the margins are very good, I'm awaiting a telephone call from them.

Thank you for your message.

Thanks, Kriss.

 

[Barnie]

for us as a distributor it doesn't make to much difference if we ship to a dealer or consumer although we dont promote drop-shipping

whilst i say it doesn't make to much difference, if a dealer orders a bulk load its logistically easier and more cost effective so margins are bigger for stock-holding stores

for this reason i would ask about discounts for bulk orders, get to know some fast turnover lines and then see what deals you can get



clearance lines are always good for a site, it will bring customers back and encourage to buy other lines at full price

 

[Paul Norman]

For us, we prefer to buy stock and sell from stock, so that we can control our availability, and secure the styles we want.

But that does not mean drop shipping is bad - it is not. It does have some commercial advantages, not least, cash flow! So provided the margins are right, and the support from the supplier is spot on, it is a good idea.

 

[brownie]

Yes of course I make a profit - why else would I be starting a business?

I believe the margins are very good, I'm awaiting a telephone call from them.

You started off very confident and then changed your tune, why do you think everyone has mentioned profit/margin? Because in drop shipping, as there is obviously extra work for the drop shipper/distributor, margins are eroded. Potentially this is one of the biggest downsides of drop shipping and needs careful attention to succeed.

I gather from your first reply you knew this anyway.

 

[SillyJokes]

You should also check that the profit margins you are offered are actually achievable.

Other people who are drop shipping with them are your competitors and may drive down prices and make it unprofitable. They may even compete directly with you themselves and you'll never be able to beat their prices.

You should also be sure that you are getting acurate stock levels so that you don't over sell as this will potentially lead to a high level of customer service problems.

It would be a good idea to keep stock of your best lines because of this as stated above.

How are you going to handle returns which will be quite high in clothing?

Drop shipping is a good way to start but I don't think it is a long term solution. when you decide you no longer want to do it, remember you will have to remove all the product images provided by your drop shipper - no mean feat should you decide to move away from them.

 

[Barretts-Selfstorage]

Hi,

We offer a fulfillment service where we can pick, pack and dispatch your orders for you. If this is something that you are interested in and would like some more information please let me know.

Regards
Adam

 

How are you going to handle returns which will be quite high in clothing?

That in my experience is the dropshippers problem ,I would not entertain a company that did not take responsibility for faulty goods..

agreed that in clothing this could be quite a problem though .

Earl

 

[Paul Norman]

The ability to individually check each dispatch is one of the reasons why we carry our own stock. We quality check at the point of arrival, too, as just some times, manufacturers send out defective stuff.

 

[websitedesign]

THere are many non reputable dropshippers out there so be very cautions that you do not get ripped off.

Make sure all payments go through escrow

 

[Tomasd]

If you are selling to retail customers, in our experience drop-shipping puts customers off. Also, you have no control over the shipping, but will be held legally responsible for it. There are also problems in the event of returns, refunds etc. Check the Distance selling regulations very carefully as drop-shipping can land you in trouble.

 

[rainbow3]

There seem to be many that charge for you to see their price list. This is probably because that is the only way they make money.

The ones that are showing prices are generally no cheaper than buying a single item as a consumer.

I suggest go to the manufacturer first and if you dont have volume ask them to recommend some distributors.

 

[MH1]

Dropshipping is easy, making a decent profit through dropshipping is the hard part.

The most important thing is to find a quality dropshipper who will give a quality service and as mentioned you need to allow for possible high return rates where clothing is concerned. The returns are not always brand new when returned either, many clients use and return for a full refund.