<div class="bbWrapper"><b>Q & A 17. </b><br />
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<b>Q.</b> Can your book be used to find dropship wholesalers? The dropshippers I have found on places like Doba and WWB don’t leave enough meat on the bone.<br />
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<b>A. </b>Sorry but you are asking the wrong person. For a start I don’t supply lists, I teach how to source supplies direct from the manufacturer. Secondly, I don’t recommend dropshipping as a business model, but because I get so many questions about dropshipping I will explain why. It is a long explanation but it answers a lot of the questions that I am so often asked.<br />
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<b>Pros and Cons of Dropshipping</b><br />
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I think that most members of the Fastlane forum know how dropshipping works, but in case Rip Van Winkle is online, here is a brief description:<br />
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Dropshipping is a business model that allows you to retail goods without holding any physical stock. Without any goods in your possession you advertise for sale those products that your dropship supplier has in stock.<br />
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When you make a sale, you send all the sale details to the dropshipper who then ships the item out on your behalf. Your profit will be the difference between what you charge your customer and what the dropshipper charges you. Don’t forget to allow for your selling costs, including Ebay fees, PayPal fees, postage etc. Some people even have to pay a dropship fee.<br />
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<b>Pros:</b><br />
<ul>
<li data-xf-list-type="ul">Dropship wholesalers offer a vastproduct range for you to sell.</li>
<li data-xf-list-type="ul">You do not need to outlay money for inventory.</li>
<li data-xf-list-type="ul">Your dropship supplier does most of the work for you, including packing and postage, although you still have to handle the sales and administration work</li>
<li data-xf-list-type="ul">Theoretically your bigger product range <b>could </b>lead to higher sales.</li>
<li data-xf-list-type="ul">You don’t even have to worry about storage space.</li>
<li data-xf-list-type="ul">You can automate the process.</li>
<li data-xf-list-type="ul">Your dropship wholesalers might have photos that you can display on eBay or Amazon.</li>
</ul><b>Cons:</b><br />
<ul>
<li data-xf-list-type="ul">You have no control over your own business. That can lead to very unhappy customers.</li>
<li data-xf-list-type="ul">You might keep selling not knowing that the supplier is running out of stock.</li>
<li data-xf-list-type="ul">Your supplier may even discontinue a product line without informing you. That can result in bad feedback that will damage your business.</li>
<li data-xf-list-type="ul">Dropshippers make mistakes, but <b>you get the bad feedback</b>.</li>
<li data-xf-list-type="ul">Those who promote dropshipping boast about their huge turnover, but they don’t tell you how low their profits are. Dropship resellers posting on business forums generally report a profit margin of 20% or <b>less</b>, but there are a few who say they get 30%.</li>
<li data-xf-list-type="ul">Many sellers on Amazon and Ebay use the same dropship wholesalers, so there are often hundreds of sellers flooding the market with the same product.</li>
<li data-xf-list-type="ul">When you buy from dropship suppliers you are engaging in a business to business transaction and in almost all western jurisdictions that means you do not have protection under consumer protection laws. <b>Your customers do.</b> Even if they did not, they still get favoured treatment from eBay and PayPal and credit card companies, which means they can, and do, return the goods for any reason and claim a refund. If numerous customers do that, perhaps simply due to a recently announced product update, you now have an inventory of returned goods whether or not you have the funds to finance an inventory. Your suppliers will not give you a refund unless the items are faulty. Those selling via the dropship business model should not do so unless they have funds available to finance a large number of returns. <br />
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<li data-xf-list-type="ul">In order for an item to sell successfully especially on Amazon or Ebay, it has to be either unique, or a very desirable item. If you browse through dropshipping directories you will find it almost impossible to find items that meet these criteria except for those very desirable hot selling products that every man and his dog are selling at ridiculously low prices.</li>
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