Understanding Dropshipping


btjohnson3811
Full Member
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2 Feb 16 12:29:43 am
So I started buying and selling items on craigslist these past few months and have been doing very well. I ended up stumbling upon this site, purchased the yearly subscription and now I'm kind of lost. I have a decent ebay account right now that can list $14,000 worth of items a month or 250 items total so this seemed like the next step with my business.

Is there a helpful guide for members such as myself?

How does the process of drop shipping work? Do I first pay for the item and then it is stored on location until I ask the wholesaler to ship it somewhere?

What do I ask the wholesaler exactly?

I likely have a few more questions but that's it for now, thanks!


btjohnson3811
Full Member
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2 Feb 16 12:32:36 am
to expand upon this...

I'm confused at where to start I searched for an item "Ipad Air 2" I click suppliers and then a bunch of suppliers come up. Is the next message "hey what are you selling these for each/unit?".


fudjj
Site Admin
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2 Feb 16 01:26:43 am
Hi Bradley,

Very straight forward.

Firstly you have to choose the supplier/s that you want to work with based on your selection criteria. Once you do that, simply open an account with them and then you are able to list their products for sale without paying for them upfront. You only pay for them when you sell something, then you process the order and they ship direct to your customer.

You make your money from the difference of what your selling price was and what the supplier's cost price is. Just bare in mind that you need to calculate all your costs when pricing an item. Listing fees, selling fees, transaction fees, shipping fees, absolutely everything or you can quite easily end up loosing money on the deal.

I notice that you use the term wholesaler in the same post as dropshipper. Just be aware that they are two completely different things. A wholesaler sells products in bulk with a set minimum order quantity, the more you buy, the cheaper the price. A dropshipper has a set price per unit, whether or not you buy 1 or 20 of the same item, they have no discount on bulk orders, but have no minimum order quantity like a wholesaler.

Dropshippers like to call themselves wholesalers a lot of times because it's a good marketing term. People associate the word wholesale wholesale with cheap, so it gets thrown around a lot these day, but isn't relevant unless the supplier is offering you discounts on volume purchases.

Cheers


Mark (fudjj)

Community Manager
SaleHoo.com

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jomobenun
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21 Feb 16 09:32:00 pm
Hi Mark, I noticed how you mentioned that dropshippers "have no minimum order quantity like a wholesaler." However, in one of the posts found in the Seller Training Center (link below), Slade suggests that you email the dropshipper "What is your minimum quantity order?" What would be the point of asking them this if you just said that dropshippers do not have a minimum order quantity?

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Thanks,
Joey


fudjj
Site Admin
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21 Feb 16 10:48:52 pm
Hi Joey and thanks for pointing that out.

I'll bring that to the attention of admin and have that confusing statement corrected. There is in fact no MOQ amount requirements with dropshippers.


Mark (fudjj)

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luis.mujicaf
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25 Feb 16 03:52:25 pm
Sometimes you can pay in advance to a dropshipper like having credit in his website, but it's to risky since many times the market doesn´t respond well for the product you are selling. I prefer buy when someone buy from me. The key of dropshipping is having 0 inventory, that is traduced in 0 handling cost too but this has a profit sacrifice since you can not access to wholesale discounts. It helps a lot to have good negotiation power, so the power of words is very high in dropshipping negotiation.


Luis Felipe Mujica
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