Expert: Marvinator - 1/17/2007

Question
I would like to start my own business on eBay. I have 115 positive feedback. Can you give me any information on which drop shippers are good. Thanks for your help.

Answer
Thanks for writing.  I hope you will have a great and successful time on Ebay as a seller.  It is a long hard road and yet very rewarding if done right.

Before I go on, I must point out that I cannot in good conscience recommend any one supplier over another.  I just don't feel that I should use this forum to advertise one company over another.  In addition, since many of these articles are read many months after they are written, I would hate to recommend a company which would no longer be in business by the time someone else comes along.  

Now, that said, let me take a moment to discuss Drop Shipment companies. Drop Shipment is a term which many of the larger department stores originally used to describe an item being dropped into the mail from the central warehouse and shipped directly to the customer’s home. Currently, the term means pretty much the same thing but on a wider scale. A Drop Shipper is a company which will allow you, as an individual seller or as a brick and mortar store, to sell an item in their stock which they will then ship to your customer from their warehouse. YOU don't have the item in stock, all you need to do is put the item up on Ebay and wait for sales.

Not a week goes by without someone asking me about Drop Shippers. Drop Shippers are a good way to go if you don't mind the business of being in business. What I mean is that you need to consider several things about Drop Shippers and the situation they create. First, You are not the only customer of the Drop Shipper. You are not among an elite group of 20-50 sellers either. The company couldn't stay in business with just 20-50 clients. This means that you are selling the same things as hundreds or even several thousand other Ebay sellers. Each of you is hoping for the same sales and probably the same clients – and you all bought the same item for the same price.

Second, and most importantly, if you do actually end up making a sale, there is no guarantee that the Drop Shipping company will have your item in stock when you go to order it and they are not obligated to get the item back in stock just for your one customer, either.   

It works like this:  The FTC (and Ebay) use a standard 30 day rule in delivery of goods.  You have 30 days from the time you are paid to get the item into the mail and to the customer.  Now, since YOU have been paid by your customer, you are under this 30 day rule.  The Drop Shipper, however, is not paid by YOU until they ship the item out!  Because of this simple financial situation,  they are NOT held accountable under the same 30 day rule.  They can take their own sweet time to get the item to you – if at all. You and your customer can end up waiting 6 – 8 weeks or more! In fact, it may end up that you are forced to refund the customer’s money just because the Drop Shipper oversold and didn’t have it in stock when YOU needed it. I’m not saying this WILL happen, but it does happen and has happened more often than Drop Shippers will admit.

With this in mind, I cannot recommend Drop Shippers as a way of business.  This, of course does not mean you should not use a Drop Shippers.  Many beginning sellers use this form as a way to get started.  They use the Drop Shipper to get those first sales, and take the money from those sales and build up their own stock of items which they know will sell.  Once they get to a level where they know they can stop using the Drop Shippers, they are fully on their own, buying their own stock and doing business as they know they can without someone else holding control of their business.  This can be a great way for a seller to get started.  

I hope this information is helpful.