I’ve heard advertisements on the local radio for a program that supposedly teaches you how to make money on the internet selling products you don’t have to pay for, store, or even see.
I get how the scam works in a general sense: I give the company money, they send me a program that doesn’t work, and I’m out the money. Profit!
But what is the general basis on which they can claim that one can make money selling things they don’t own? My best guess is that the program teaches you how to set up a website with links to purveyors of worthless crap (like natural herbal remedies and patent medicines and the like), and you get a fraction of a percent of every sale. My boss has done this, he’s sure he’s going to start raking it in any minute now.
Drop shipping is where…I put a toaster up for sale, lets say, and you buy it…I don’t have a toaster of my own to send you, so I buy a toaster from a wholeseller and just tell him to ship it to you. Even though I’m selling the good, I don’t own the good or ever have posession of the good…I’m just acting as a middleman between you and the wholeseller (and marking the price up).
But it rarely works, ask any eBay seller. You’re at the mercy of the drop shipper. Suppose they no longer have the item. Tough on you or rather your eBay feedback. And there are tons of other reasons why drop shipping doesn’t work
Check out usenet’s alt.marketing.online.ebay and search for drop shipping. (You can access through Google groups if you don’t have a newsreader for Usenet.
In the long term, you can’t really profit doing this, because you’re not adding much, if any, value. Think about cafe press, as an example. How much value are you adding by uploading an image? It’s easy to overestimate but I believe the simple way to look at it is: you’d make more profit if you bought your own t-shits in bulk and printed them up (I think I can throw a small stick and hit three places around me that will do this). If you’re not willing to invest that to make money, you probably won’t be making much from cafe press. That doesn’t mean cafe press is a worthless venture, it just means you should be a bit realistic about what you could possibly get from it.
These people did find selling the information on how to make money by drop shipping was less profitable use of their time than selling the information package.
I don’t know about that, I’ve deliberately bought a couple of items this way through eBay because I generally feel that as long as the base price is competitive I’ll gladly pay a couple of euros extra to have someone else use his credit card to order the merchandise. Direct money transfer to the seller’s bank account is much more convenient for me and feels a lot safer.
I believe Amazon actually uses drop shipping for some of its products.
As an individual, however, it’s easy to fall afoul of it - especially if you’re selling somewhere like eBay - the cost and risk of listing/advertising is yours, as well, in fact, as the final accountability of supply - which is OK if all the items you list sell at the right price and are supplied promptly to the customer by your dropshipper.
If your items fail to sell, you lose the fees
If your dropshipper lets you down, you waste time and effort trying to put it right, and still get a bad reputation.
There’s also a quasi -fanchise variant on drop shipping where they essentially "sell’ you your own internet portal (ie a store website) where you have the opportunity to compete with thousands of other people who bought into the idea who have the exact same portal selling the exact same products. I’m trying to remember the name of this company but coming up empty.
Yeah, I’m fairly sure Amazon does. E.g. I ordered a cheap headset for my cellphone and it came from ABC electronics or something. The headset was like $.99 and $3.99 S&H. My sister remarked, “Yeah, it should be the opposite, but if they charged you that way, Amazon’s cut would be higher.”
The advantage for ABC to doing via Amazon would be that their dbase seems connected to Amazon—if it isn’t in stock, the customer knows when trying to place the order. They don’t tell you it’s ready for shipping and then find themselves unable to deliver.
