What do dropshippers expect?

[Paul9]

One of our businesses is an importer/wholesaler.

Our product is quite niche but unique. We already sell to trade customers but would like to create sales channels direct to the public, this isn't something we want to get involved in as I am a firm believer that a wholesaler shouldn't place themselves in direct competion with their loyal trade customers.

Our plan is to approach a select few retailers within our industry and offer a dropshop package. Although the concept is straight forward it is not something we have been involved with before so we are currently researching what a great dropshipping offer would consist of.

So my question is, what concepts should we explore including in our package that would make it a great deal?

Our product is quite high value and very cumbersome to handle/store/ship so lends itself to droppshipping quite well.

We plan to offer retail partners things like free samples stands for their showrooms, a free sampling service for their ecommerce customers but any other ideas people with experience may have would be great.

Thanks for your time,
Paul

 

[UKSBD]

I used to drop ship large awkward shaped items

One off delivery costs if I delivered from stock were £60+ but my supplier delivering direct was about £10.

Most important thing for me was we had a deal that they would not only deliver direct but also accept returns and arrange the collection.

They did have a 10% restocking fee but never actually charged me this.

It meant I was only really losing about £20.00 on any returns

 

[Paul9]

I used to drop ship large awkward shaped items

One off delivery costs if I delivered from stock were £60+ but my supplier delivering direct was about £10.

Most important thing for me was we had a deal that they would not only deliver direct but also accept returns and arrange the collection.

They did have a 10% restocking fee but never actually charged me this.

It meant I was only really losing about £20.00 on any returns

I haven't really delved into returns, so it's something I really need to think about.

Our delivery costs are £120 plus about £60 for packaging.
I would make about £120 on an average order and the dropshipper would make about £80 so any profits could easily be swallowed up on a return order, although it is a very basic product with nothing to fail so I would expect returns to be very low.

 

[UKSBD]

I haven't really delved into returns, so it's something I really need to think about.

Our delivery costs are £120 plus about £60 for packaging.
I would make about £120 on an average order and the dropshipper would make about £80 so any profits could easily be swallowed up on a return order, although it is a very basic product with nothing to fail so I would expect returns to be very low.

It's the reason I only sold the top range premier products

My supplier had 2 ranges

Premium which retailed at approx £300 which I would make £100 on

Budget range of same product £100 which I would only make £30 on

Just wasn't worth the risk dropshiping the budget range, even with my supplier handling all delivery and not charging a restocking fee.

I wouldn't have even bothered selling the premium range had they not agreed to organise all deliveries and returns.

 

[fisicx]

Might be basic but people return for all sorts of reasons. And then there are all those who claim it never arrived.

I read a thread here where they were getting up to 40% returns.

 

[UKSBD]

Might be basic but people return for all sorts of reasons. And then there are all those who claim it never arrived.

I read a thread here where they were getting up to 40% returns.

With the product I sold, I didn't sell many Online without 1st speaking to and advising people 1st, many a time I wouldn't accept an order if I thought there was a possibility of a return, just wasn't worth the risk. This was when I took returns back rather than supplier.

When we had the agreement that supplier handled deliveries and returns I was less strict, as we were sharing the risk

 

[Paul9]

Might be basic but people return for all sorts of reasons. And then there are all those who claim it never arrived.

I read a thread here where they were getting up to 40% returns.

People might be disincentivised to order with the possible intention of returning when they are made aware that return postage is going to cost them £140.

 

[Paul9]

With the product I sold, I didn't sell many Online without 1st speaking to and advising people 1st, many a time I wouldn't accept an order if I thought there was a possibility of a return, just wasn't worth the risk. This was when I took returns back rather than supplier.

When we had the agreement that supplier handled deliveries and returns I was less strict, as we were sharing the risk

I am pretty happy to sort out returns, the shipping end is what we are set up for.
I had briefly contemplated the issue but never understood the importance from a dropshippers point of view so thanks for making the point.

 

[fisicx]

People might be disincentivised to order with the possible intention of returning when they are made aware that return postage is going to cost them £140.

You need to read up on consumer law. The buyer can claim return postage for a number of reasons.

 

[Paul9]

You need to read up on consumer law. The buyer can claim return postage for a number of reasons.

I already have, pretty much boils down to the point that if they change thier mind, even within the 14 day right to return, they can still be required to pay the return postage.

If there is damage or a defect then I wouldn't have an issue paying although it is a requirement.

 

[wayzgoose]

I already have, pretty much boils down to the point that if they change thier mind, even within the 14 day right to return, they can still be required to pay the return postage.

If there is damage or a defect then I wouldn't have an issue paying although it is a requirement.

And there's the problem. Tell them it's £140 to return and they'll damage it.

 

[Paul9]

And there's the problem. Tell them it's £140 to return and they'll damage it.

I have considered that to be fair.

 

[Paul Kelly ICHYB]

£180 p&p?

What sort of product is it and what's the retail?

 

[Paul9]

£180 p&p?

What sort of product is it and what's the retail?

Laminated plywood panels that are used for campervan furniture.

Oversize pallets 1220mm x 2500mm

Retails around £150-£170 per sheet.

Average dropship will probably be 3-5 sheets.

Trade customers usually buy them 10-100 sheets.

 

[Paul Kelly ICHYB]

Aha!

First, I would really look at your P&P costs! £150 for a sheet and £180 to ship would put a lot of smaller buyers off!

I think either setting up an independent sales company to handle direct sales or selling direct, but with a premium for small volumes are the best routes..

BUT, offer an affiliate sales scheme so that recommenders can make something out of their efforts, rather than drop shipping..

 

[Paul9]

Aha!

First, I would really look at your P&P costs! £150 for a sheet and £180 to ship would put a lot of smaller buyers off!

I think either setting up an independent sales company to handle direct sales or selling direct, but with a premium for small volumes are the best routes..

BUT, offer an affiliate sales scheme so that recommenders can make something out of their efforts, rather than drop shipping..

The only other options for the public to buy similar products right now is from a couple of companies who charge similar P&P.

It is a 3 sheet minimum order.

I understand our industry, we already ship over a 1000 sheets per month and I know that we can offer drop shipping and our retailers can still be cheaper than the competition for a similar product, delivered.

My question wasn't about my costs, I want to understand what makes a good dropship package offer so I can design a system that will be attractive to businesses when I pitch them.

 

[Paul9]

Aha!

First, I would really look at your P&P costs! £150 for a sheet and £180 to ship would put a lot of smaller buyers off!

I think either setting up an independent sales company to handle direct sales or selling direct, but with a premium for small volumes are the best routes..

BUT, offer an affiliate sales scheme so that recommenders can make something out of their efforts, rather than drop shipping..

I will look in to affiliates, it isn't a topic I know much about, thanks for the suggestion.

 

[UKSBD]

As someone who used to dropship similar size items most important for me was

Relationship with supplier, trusting supplier, reliability of supplier, knowing if I told someone something was going to be delivered on a set day it would be, knowing if something wanted returning my supplier would contact customer and arrange collection (not mentioning who they were, so customer assumed I was sorting it)

I liked having one point of contact at supplier, getting very quick confirmations if sending an email order in, instantly told if there was a problem.

I liked the fact my supplier provide top quality images, descriptions, technical documents which I could use on my website

I liked having 30 day from end of month credit (meaning 95% of the time I was paid before paying)

I only ever dealt with their top quality products, made sure people ordered the correct item and actually had less than 1% returns a year

 

[Paul9]

As someone who used to dropship similar size items most important for me was

Relationship with supplier, trusting supplier, reliability of supplier, knowing if I told someone something was going to be delivered on a set day it would be, knowing if something wanted returning my supplier would contact customer and arrange collection (not mentioning who they were, so customer assumed I was sorting it)

I liked having one point of contact at supplier, getting very quick confirmations if sending an email order in, instantly told if there was a problem.

I liked the fact my supplier provide top quality images, descriptions, technical documents which I could use on my website

I liked having 30 day from end of month credit (meaning 95% of the time I was paid before paying)

I only ever dealt with their top quality products, made sure people ordered the correct item and actually had less than 1% returns a year

Exactly the info I am after, thanks for taking the time


We already deliver our products through a fulfilment center who are really on the ball, orders are usually picked and shipped within a couple of hours, so we have a really well established delivery system that I am confident will be able to lend itself to drop shipping well.

Customer relations is something we take seriously so I value what you say regarding the relationship and response time, I understand that we will be representing our dropship customers reputation.

I plan on labelling shipments with the retailers branding and no sign of ours, the only link may be a return address.

Our pallet network can offer tracking the end user.

I plan on supplying retailers with showroom displays and a free postal sampling service so their prospective customers can be sure they are choosing the correct designs before purchase, hopefully this should cut down on returns of which I can't see there being a great amount because it is a peice of plywood at the end of the day, very little not to like about it.

I have had a good look at returns this morning, I would be happy to deal with all returns as long as the paying customer covers the return cost, this seems allowable with distance selling regs even in the 14 day cooling off period as long as it is made clear on purchase, this should cut down returns too.

Obviously if we are at fault due to damage/defects I would replace without question as quickly as possible.

I hadn't thought about offering credit, so another good suggestion, I suppose that is easy enough to sort out.

Again, thanks for your time.

 

[UKSBD]

I have had a good look at returns this morning, I would be happy to deal with all returns as long as the paying customer covers the return cost, this seems allowable with distance selling regs even in the 14 day cooling off period as long as it is made clear on purchase, this should cut down returns too.

That shouldn't be anything to do with you

The customer is the dropshippers, the contract is between them and the customer and deliveries are between them (even if it is you doing it)

The dropshipper will then want a separate contract with you and as that is B2B, returns, restocking, etc. need to be in that contract.

Edit to add: if the end customer is a business, the dropshippers contract with them is a b2b contract, so regs you are researching may not apply anyway.

 

[fisicx]

Just spoken to a bloke who fits out camper vans and he gets timber delivered for £60. He wouldn’t even entertain paying £140. And it’s not palletised. It’s just sheets they pull off the flatbed by hand. Doesn’t have room for a forklift.

 

[Paul9]

That shouldn't be anything to do with you

The customer is the dropshippers, the contract is between them and the customer and deliveries are between them (even if it is you doing it)

The dropshipper will then want a separate contract with you and as that is B2B, returns, restocking, etc. need to be in that contract.

Edit to add: if the end customer is a business, the dropshippers contract with them is a b2b contract, so regs you are researching may not apply anyway.

I understand this, I listed it more for verification that I wouldn't be responsible for the return postage cost if a customer changed their mind although I would be happy to take the stock back, it just seems like a good level of service.

Incidentally, I have checked the T&C's of 3 ecommerce businesses that I plan to approach and they already state that shipping on any returns in the cooling off period must be covered by the end user so that links up pretty well.

 

[UKSBD]

Incidentally, I have checked the T&C's of 3 ecommerce businesses that I plan to approach and they already state that shipping on any returns in the cooling off period must be covered by the end user so that links up pretty well.

One thing to think about, be careful that you don't create a new competitor.

If they successfully start selling it they may try and cut you out if you are not the actual manufacturer.

Edit to add: Apologies if that comes across like telling your granny how to suck eggs

 

[Paul9]

One thing to think about, be careful that you don't create a new competitor.

If they successfully start selling it they may try and cut you out if you are not the actual manufacturer.

Edit to add: Apologies if that comes across like telling your granny how to suck eggs

I am importing from Asia.
Currently there is only one other manufacturer in the UK of a similar product, my product is superior to theirs on their main usp by quite a margin.

Half of the reason it makes a good dropship proposal is because retailers don't have to stock hundreds of sheets of plywood (we stock thousands), it is a massive capital outlay at over £100 per sheet to them, there is big storage issues because of its volume and its an issue to ship for them.

Most ecommerce websites that currently stock my competitors product don't offer it for delivery, it is collection only

My competitor doesn't offer dropship and for retailers to buy their product at a price they will have reasonable profit selling to the public they need to buy 40 plus panels, I don't think my competitor could offer dropship at a price where everybody could make money because there supply chain looks expensive compared to mine.

My competitor is one of the only businesses in the country that supply direct to the public.

Currently, retailers don't seem to want to get involved in the faff of stocking and shipping my competitors product so I would think if they were offered a drop ship option for a superior product that they could sell for cheaper than the competition, they would easily see the value.

I could be open to building a retail website but part of the drop shipping idea is about creating brand awareness, currently most ecommerce sites that sell the items a campervan self builder needs have product pages with my competitors product, I want my product on their pages so the public start to see my brand, my objective is for my product to become the new industry standard.


Somebody moving in on your business is always a risk I suppose but I think most would be put off by the outlay, required storage and the fact it took us nearly 3 years to source a suitable product.
Although I am sure at some point it will happen.

Again, thanks for your time, it is nice to bash out ideas with somebody who understands the objective.

 

[Paul9]

Just spoken to a bloke who fits out camper vans and he gets timber delivered for £60. He wouldn’t even entertain paying £140. And it’s not palletised. It’s just sheets they pull off the flatbed by hand. Doesn’t have room for a forklift.

I dont know where your bloke is buying his lightweight ply from but there is only 2 real sources in the UK, we charge £140 delivery and our competitor charges £110.
If you go on to any ecommerce website that delivers the cost is between £110 and £150.

As somebody who sends it in bulk I would much rather pay to have it properly palletised and protected rather than have £150 sheets of wood floating around on the back of an open top flatbed.

My guess is that your bloke either has a deal with somebody local who is buying bulk or he isn't buying the industry standard material and is buying some sort of laminated material from a local timber yard that isnt really suitable for the job.

Infact I deal with many professional converters on a daily basis who pay these delivery fees.
I can provide you with their phone numbers so you can ask them directly how much they pay if it matters that much to you.

 

[fisicx]

He gets it from a local supplier.

 

[oDynamics]

One of our businesses is an importer/wholesaler.

Our product is quite niche but unique. We already sell to trade customers but would like to create sales channels direct to the public, this isn't something we want to get involved in as I am a firm believer that a wholesaler shouldn't place themselves in direct competion with their loyal trade customers.

Our plan is to approach a select few retailers within our industry and offer a dropshop package. Although the concept is straight forward it is not something we have been involved with before so we are currently researching what a great dropshipping offer would consist of.

So my question is, what concepts should we explore including in our package that would make it a great deal?

Our product is quite high value and very cumbersome to handle/store/ship so lends itself to droppshipping quite well.

We plan to offer retail partners things like free samples stands for their showrooms, a free sampling service for their ecommerce customers but any other ideas people with experience may have would be great.

Thanks for your time,
Paul

Quick delivery & better return policy

 

[antropy]

So my question is, what concepts should we explore including in our package that would make it a great deal?

As well as building online shops, we have a few of our own that we dropship.

An easy way to connect to import products/stock levels, and an automated way to send you the orders.

Plus pricing cheap enough where we can make a decent profit.

We're looking for new products to dropship actually so feel free to email me: [email protected]

Paul.

 

[Paul Kelly ICHYB]

@Paul9 Apologies, it is easy to go off topic on an interesting subject.

Whilst what you are doing is essentially is nowerdays called drop shipping, traditionally, it isn't! It sounds like you want them to sell from a 'display model'.

Even if you don't, lots of traditional retailers might not know the phrase.

Offer a good margin on a few display sheets and the ability to sell with direct delivery.

they could sell for cheaper than the competition

I would suggest increasing the selling/retail price and reducing the shipping price, as this could increase perceived value and profits.

BTW, what you are looking at doing has been around for many years, especially in areas such as major appliances, furniture etc.