to ask someone to explain dropshipping to me?

[BlueNeighbourhood]

The way I understand it is that someone (person A) sets up a website and sells stock. However A never buys the stock and it's computerised to contact a wholesaler who will package and send it out to the customer. Meaning A is making money purely from a website.

-Is this how it actually works?
-Do people make much money from dropshipping?
-Surely the consumer could get around this by going on ebay or the like, as most of the products come from China?

I'm intrigued as a woman who lives local to me has set up a website, advertises like a Younique rep with multiple inspirational quotes (which isn't what LinkedIn is for) and is saying she's selling hundreds of products a day.

Surely it all sounds too good to be true?

I've never heard the term dropshipping, but recently ordered a book on eBay which swiftly arrived from Amazon. It was hardback not paperback which made me really confused so I ldid some digging until it finally dawned on me the eBay seller simply orders from Amazon Prime and has it despatched to a third party (me!) as a gift.

Wrong, but also quite genius...

It happens on Ebay. Someone sells an item, buys it elsewhere for less and has it posted to the buyer. Obviously the profit depends on the item and cost with postage, however they only pay postage once so must work for them.

This looks to happen on there more often than it does because when people think the seller has bought from Amazon they actually also sell on there but the buyer doesn't check out other options so don't realise.

It is a risk to dropship because the items may not be forthcoming.

Well one could list something on one website (eg EBay) and when a customer purchases the item, you order it from another website (eg Amazon) directly to their shipping address/name.

I doubt people make much money from this - it really depends on the popularity of the item and if profit margins are high for that particular item. For example I see trendy Instagram esque tops listed on eBay for like £10, and you see resellers on Depop listing them for £30-£45 with a shipping time of like 4-5 weeks which suggests they’re ordering it from China. Most items will have a lower profit margin though, eg a few pounds difference.

I bought a cereal dispenser from eBay, and it ended up being delivered by amazon prime complete with an amazon invoice - I wasn’t fussed as it arrived the next day and the price difference was only a few pounds.

Yes of course savvy shoppers can and will search around for prices.

There are risks involved. I’m not actually sure if this is allowed on certain websites like amazon and eBay. There might be a problem with the item and you’d never know, such as an incorrect item/damaged item etc as you won’t be involved in the shipping preparation to be make sure everything is correct. If the item isn’t being delivered by a tracked service you have problems there too. I imagine returns will be a bit complicated

I think a massive part of success here is your online reputation, eg high eBay feedback or Depop feedback/stars. People with a high following/rating will be able to get away with raking up prices

Lots of businesses use Amazon warehouses for logistics and fulfilling orders. This isn't necessarily drop shipping. The shop I work for sends hundreds of products to the Amazon warehouse for them to sell and also for them to send when we sell them through our website.

Yes it’s very popular with oversea sellers. My dh advertising wizz in India has just set one up and was asking him to be part of it

The buy of sites like Alibaba which is ridiculously cheap and suggests retail price for it and the site even sends it to the customer HOWEVER they don’t have a return address - that’s what my dh was asked - to give our address for returns. He got told to fuck off.

I don’t think younique is dropship I thought it was make up pyramid scheme shite

I think the Younique comment was just how this particular person comes across on LinkedIn - all these motivational quotes about working for yourself blah blah, and constant posts about their business and being awake 20 hours a day or whatever. It was reminiscent of seeing Younique posts.

I don't however think she's an eBay/Amazon type one. She has her own website full of jewellery and watches (most look like overpriced tat, i.e £65 for a watch looking slightly like an Ice Watch which is branded differently) but according to her sales are through the roof and she doesn't have any part in delivery or product fulfilment.

Maybe it's all just stealth boasts by her and it may not be doing well, people buy into success so could just be boasting to gain more website visitors.

It’s quite risky because if the item doesn’t turn up or is not as described then the customer can claim the money back from the drop shipper through eBay, but the dropshipper probably won’t be able to claim the money back from the wholesaler so will lose out

It is a normal part of business...
I bought a tumble-dryer (AEG) from John Lewis...
I was phoned by AEG to arrange delivery, and delivery was direct from AEG - So John Lewis was drop-shipping...

Ultimately it is a logistics solution - as a retailer online or bricks and mortar, it is difficult to have everything in stock, so you might arrange for your suppliers to send direct - equally if a large item, it is pointless to ship it twice, to you, and then from you as retailer to the customer, so you might save costs and send it once only

Also, you might not wish to open a warehouse with all the accompanying costs as your business grows - so you might arrange a mixture of logistics - some items in your shop, you send from you / some directly drop-shipped from the manufacturer or wholesaler / distributor and then you might use a fulfilment warehouse (e.g. Amazon or others)

Some businesses only drop-ship, in which case they may go one step further and use drop-shipping software / links so that when an order is placed on their website, the order goes directly to the supplier who sends out to the customer - it can even go as far as white labelling which allows the supplier to send it out branded as the drop-shipping company / public facing website

any combination is possible and all combinations are happening all the time across all websites / businesses...

One of my clients uses this as she designs and has a product made specifically for her then her manufacturers produce the stock and deal with the packing and dispatch on her behalf. She has no involvement in the process at all once a particular line is approved.

The ebay amazon thing happened to me and the item was advertised with a different description so I thought I was paying for a superior item. Then it came from amazon . Getting my money back has been a nightmare.

Drop-shipping was the easy internet 'business' trend before Younique. In theory you can make money out of it but only if you spend the time researching the product niches, optimising your website and having good marketing because you have to convince someone to buy from you rather than the hundreds of others selling the same thing.
I worked with someone who had a successful drop-shipping business but she spent a lot of time building it up.

I used to use dropshippers. It's a nightmare unless you have money to sink into it. Monitoring stock is an issue, the margins are slim and the market is saturated if you go with one that is known and easy to access. That said it did alright. I mostly used it to test product lines and buy wholesale on the ones that did well (much higher margins) so it's not all bad. I had to integrate systems myself and gave up when that wasn't possible on a new system. Many of my wholesale suppliers will dropship but only at high volume.

It is a risk to dropship because the items may not be forthcoming.

It isn't really a risk because they just cancel the order if they can't fulfil it.

I ordered a vacuum cleaner for my mum on eBay. About five days after I'd ordered it - by which time it should have been delivered - the seller contacted me to say they had had a mysterious fire in their warehouse and this particular vacuum was no longer available.

Look up Tesco Direct, they are not stopping all of the direct site which was mainly dropshipped lines from suppliers. They weren’t making money as they were having to advertise and compete against all other online retailers.

*now I meant

There are drop shipping sites..

So Redbubble, I have a Redbubble store, there are mock ups of products on there with the designs I've uploaded to the products they will get printed and ship, which I have selected.

You trundle a long and you want a mug with guineapigs on it, you search and find my Redbubble store, buy the mug with guineapigs on it...

Redbubble email me and tell me you've bought a mug with guineapigs on it. I do a little clap and then read the bit that tells me this earned me 23p.

They tell whoever prints the mug to do that, and to send it to your address.

They email me and tell me they did all that, and what the breakdown of costs was, and at the end of the month they send me all the money I earned.

So somewhere between 23p and a few quid.

I could heavily market my Redbubble store and upload thousands of items, bug the shit out of everyone I know, maximise my SEO etc etc...

But I can't be arsed, its simply there to make a passive income from designs I'd had to produce for other reasons (or just felt like playing about with).

Not all drop shippers work like this though, I could be a drop shipper myself...

So I could advertise that I can get you a product, you ask for it, i go and order it from Etsy and ask them to send it to you.

It means you can run an online store without holding stock. If like me, you have no room for stock or no capital to purchase stock with, then it is brilliant.

The downside of course is that for you as the buyer, it can be harder to work out who is responsible for your order (with official sites like Redbubble thats not an issue, its clearly them!) and how to do a return if you need to.