Some suppliers are selling on Amazon at cheaper rates

I joined about a week ago and I have gone through the list of suppliers, their wholesale prices, and what is offered on Amazon and eBay exhaustively.

I have looked at over 2000 catalogues. I have not found a single wholesaler in this directory that has cheaper prices than those being offered on retail sites.

Also, I have noticed quite a few (Hundreds actually) that are listing their own products for less than the wholesale prices in their catalogues for Drop Shippers! Are they purposely undercutting the drop shippers they partnered with so they can out sell their own competition?

The ones that are doing it the most are the ones that ask for yearly fees or "Account upgrades" to drop ship with them or buy from them!

So, the only ones making money are the "wholesalers". They take your money by having you join their membership programs so you can sell for them, you do all the advertising, then they swoop into the same markets and undercut your sale!

This seems pretty scummy to me.

Has anyone had any luck with this at all? So far it seems like a scam. Pay to get a member directory, pay to join a wholesaler, pay for a website, pay for a sellers account, pay for a tax ID, pay pay pay; then you finally get a chance to list and the very company you are listing for swoops in with a cheaper than wholesale price, and you loose the sale. Not to mention all the time it took to list for them.

Can anyone prove me wrong? Or point me to a company not scamming their drop shippers?

Hi Sica and welcome to the forum,

The first thing I need to clarify for you is the difference between dropshippers and wholesalers, they are two compelely different things. A dropshipper has a set product price, no matter how many units you purchase. Now that said, some may offer bonus schemes for customers who sell X amount and so on, so that is just the general rule.

Wholesalers base their prices on volume, not on invidual unit prices like dropshippers. For example, if you purchase 100 units, you get X price, if you purchase 200 units, then you get a discounted price and so on. Every wholesaler has their own purcahsing structure, but it's no good just looking at their website to find prices, you need to speak with them to find out that structure and that will then give you your per item price.

No, there is absolutely no doubt that some suppliers also use platforms like eBay and Amazon as dircet sales channels, so you do have to watch out for it. I'll post this link for you to read through, it will actually explain a lot about prices you will find on eBay and Amazon.

Link hidden: Login to view

Cheers

I'll also include this link to give you an idea on how you can still compete with cheap prices. You may find this helpful in developing a marketing strategy.

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Thank you for your feedback. I am just having a very hard time finding any supplier that does not practice undercutting.

Hi Sica,

Yes, it can be a challange, ethics in this business are set extremely low and seem to get lower each year. It's the rapidly changing face of ecommerce unfortuntaley, we all have to find ways to negate it and carve out our own little market space.

Cheers

Can someone tell how on earth anyone would profit, using the suppliers of Bangood & BigBuys and why they are listed on this site? They are not really suppliers. Every single one of their listings is already cheaper on eBay, I made a mistake yesterday, before checking the market, I wanted some products to list on my eBay site, and purchased 30 bottles, at a cost of around £3.80, then found the same product for £1.11 on eBay. I cancelled order, but I had to badger them into sending me a cancellation email as proof, and this morning I had an email, saying 14 days to refund credit card - very long time if you ask me.

This is the same on BigBuys - lots of good stock but high priced. I cannot work out how the drop shippers make any monies after eBay & PayPal fees - surely it would be a loss.

For years I made good money on eBay, but I think the days have maybe gone due to, as I have read on the forum, the wholesalers are advertising direct and undercutting the independent sellers.

Ok moan over but if anyone knows of a supplier of beauty products where there is a margin for a small profit, please point me in that direction.

Hello Sica and welcome to the forum,

As you've stated above, the online market is crazy hard to get into and extablish yourself within these days, not an easy task at all like it used to be years ago. If you're going to be using platforms like eBay and Amazon, then you really have to start thinking outside of the square for options that can give you a competitive edge, especially if you're dealing with online suppliers the exact same as 90% of the other sellers you're competing against in your market.

I see from your post that you've been doing some reading through the forum, but I wonder if you have gone through this post yet?

Link hidden: Login to view

This might be something that you will find usefull for you to at least test market for a while, see if you can get some popular combinations going and start building a customer base.

Cheers

Hello Sica,
I'm new to Salehoo.com as well, but I would like to introduce myself and the company I started. My name is Michael Tekin and I'm the Co-founder of Link hidden: Login to view which is a Swedish-based B2B ecommerce site for luxury designer clothing and accessories. I might of missed it but I couldn't see what sorts of products you were looking for. If it is within the highend designer category I would be more than willing to help you, since alot of our clients are making good business on Ebay, Amazon etc.

Thank You

Kind Regards
Michael Tekin

Any supplier/wholesaler/drop shipper that is selling on an online platform like eBay or Amazon for themselves, just keep moving and don't waste your time with them. You'll never be able to beat their pricing and it's ridiculous that a company calls themselves a wholesaler when they are selling in the same places some of their customers will want to sell like eBay or Amazon. These guys are a waste of time.

Also, 99.9% of companies that say they are wholesalers/drop shippers and require you to pay ANY fee, FORGET THEM TOO! You want to buy wholesale, and they make money off of you when you buy from them wholesale. SO you shouldn't pay a monthly fee for paying them for products that they already make a profit on from you.

It really just takes patience to find good wholesalers. Side note, you will NEVER have great margins from a drop shipper. You will have some margin, but not the kind you can get from a wholesaler. Also, 99.9% of wholesalers have a MOQ(minimum order quantity) and/or minimum order amount. You need to first decide how much money you can afford to spend to get started. With eBay and Amazon, there is a delay from the time a sale is made until you get paid, so you have to pay for all orders and shipping upfront, and then get paid accordingly. Amazon pays every 14 days, which sucks. Not sure about eBay.

There are a ton of ways to find suppliers. I would recommend googling whatever type of supplier you're looking for. Then you have to check them out, find out all pertinent info from them, hope that they're legitimate, etc. It takes time and patience. Also, use the suppliers on Salehoo. Haven't actually used any of Salehoo's suppliers, only suppliers I either already had from the past, or new ones I've found on my own. Only because as the OP said, the supplier's prices on here are atrocious. Hope that helps a little bit.

Hi.

Well you are correct for the most part. We offer Wholesale Packages that are made exclusively for eBay and Amazon Sellers in the Bulk & Wholesale section on our website at Link hidden: Login to view. Many suppliers are just like everyone else, they need to sell merchandise, the only problem is sometimes they blur the lines between Wholesale and Retail. YES we've sold on eBay and Amazon, but we NEVER undercut our sellers, and to be honest we don't want to sell on those sites at all. The only time we've done it is when we have an item that we haven't had anyone purchase yet. NOW we don't even try to play with it, we make bundles at a very low price, with very high margins. We had a tremendous Online buyer previously that purchased all of our miscellaneous products and we agreed to NOT compete or even sell to other sellers the product we gave him, as long as he purchased enough from us. The bad news, he retired. So we are back at selling all of our miscellaneous stuff and it's a pain because buyers have had so many bad experiences like you they don't seem to listen, or understand a good opportunity. So we no longer try to lock down 1 or 2 people we just make smaller offers that are limited, so they don't get saturated.

chrispiper76 wrote:Any supplier/wholesaler/drop shipper that is selling on an online platform like eBay or Amazon for themselves, just keep moving and don't waste your time with them. You'll never be able to beat their pricing and it's ridiculous that a company calls themselves a wholesaler when they are selling in the same places some of their customers will want to sell like eBay or Amazon. These guys are a waste of time.

Also, 99.9% of companies that say they are wholesalers/drop shippers and require you to pay ANY fee, FORGET THEM TOO! You want to buy wholesale, and they make money off of you when you buy from them wholesale. SO you shouldn't pay a monthly fee for paying them for products that they already make a profit on from you.

It really just takes patience to find good wholesalers. Side note, you will NEVER have great margins from a drop shipper. You will have some margin, but not the kind you can get from a wholesaler. Also, 99.9% of wholesalers have a MOQ(minimum order quantity) and/or minimum order amount. You need to first decide how much money you can afford to spend to get started. With eBay and Amazon, there is a delay from the time a sale is made until you get paid, so you have to pay for all orders and shipping upfront, and then get paid accordingly. Amazon pays every 14 days, which sucks. Not sure about eBay.

There are a ton of ways to find suppliers. I would recommend googling whatever type of supplier you're looking for. Then you have to check them out, find out all pertinent info from them, hope that they're legitimate, etc. It takes time and patience. Also, use the suppliers on Salehoo. Haven't actually used any of Salehoo's suppliers, only suppliers I either already had from the past, or new ones I've found on my own. Only because as the OP said, the supplier's prices on here are atrocious. Hope that helps a little bit.

You are right about the drop shippers, you can't make a profit UNLESS you are willing to sell the stuff NO ONE else is selling. We sell assortments for eBay and Amazon sellers at really low profitable prices in the Bulk & Wholesale section at Link hidden: Login to view, however we have people calling everyday wanting us to drop ship. We can't and won't do it. We rather take less than half of what we can get that way to move the product and keep the trucks coming in. You have to communicate with suppliers stop trying to keep secrets let them know what you want to do so they can actually help you by selling to you, or saying NO we can't help you.

You do make some good points _ollar-anatic. The problem with selling online on eBay or Amazon is that when suppliers DO sell for less than you can sell for, they are hurting their business by not allowing their wholesale customers to sell on those sites due to their prices. It would be OK if they sold at retail prices which would allow their wholesale customers to sell at the same prices, but the majority of people would likely by from the supplier's company as opposed to a 3rd party seller. That of course means the supplier will end up losing their customers because they aren't selling enough product because the supplier is getting most of the sales. Also, a lot of companies that sell their own products on Amazon don't allow anyone to sell their products by making their brand restricted so they get ALL the sales.

If a company wants to sell to wholesale buyers, they should not sell on Amazon or eBay period in my opinion. I do understand not wanting to drop ship because it's not cost effective to sell, pack, and ship one or two pieces at a time. I think the key for the supplier is to NOT drop ship, and offer a reasonable minimum order to their wholesale buyers. The companies I order from have a minimum order of between $100-$500. That is fair in my opinion. And honestly, drop shipping is of no use to a new Amazon seller since they still have to cover the orders out of pocket upfront until they get paid every two weeks which is ridiculous. That makes it quite difficult to start selling on Amazon unless you have a reasonable amount of money to start with to cover your orders up front.

Quite frustrating. I have been searching for TWO DAYS nonstop. All the suppliers I call are all selling on Amazon....They never gave me good feedback on my inquiry. All they told me was that they no longer have the product I am requesting in stock.....I think looking at other options out there could be the best thing to do