Expert: Marvinator - 7/10/2007

Question
Hi,

I recently received this email below:

"Dear Sir/Madam,

I saw your information on eBay. Are you interested in Lacoste, POLO, AF, Juicy, Bape, True religion, LV , Gucci, Prada, Nike, adidas shirts, jeans, jackets and shoes, etc. We are Fashion-element imp &exp Ltd, in China . We are a very serious and professional supplier of brand shirts, jeans, jackets and shoes, etc. We are always looking for long-term business. Our company was founded in 2003 and has more than 300 customers all over the world, mostly in US, Canada , UK and Australia . We have a factory manufacturing the brand goods for us, varying in styles and sizes.

Fashion-element.com will DROPSHIP your order anywhere you want. We will ship to your friends, family and customers AT NO ADDITIONAL CHARGE! If you are just beginning in this business and don't have the money or the space to maintain an inventory, you may be interested in the sales method known as "drop shipping". This sales method allows you to BEGIN YOUR OWN STORE without any cash outlay, without any inventory, and without any risk."

I have been selling clothing successfully for a few years now, and have been interested in selling more seriously and avidly.  I was just wondering if you have any knowledge or could maybe give me some insight as to the validity of this dropship company, as I know there is a lot of scams out there.  Any insight or direction on how to go about ascertaining this would be extremely appreciated.  Thank you.  Here is their web address:

http://www.fashion-element.com/

Thanks so much!

Mike Taylor

Answer
Obviously, I would not have any information on whether any particular company is valid or not.  This is something you must decide on your own.

However, I'd like to share a few thoughts about Drop Shippers which many of the Drop Shipping companies (such as this one, judging by it's sales hype) fail to cover.

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. A Drop Shipper is a company which will allow you to sell an item in their stock and they will 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.
First, You are not the only customer of the Drop Shipper. You are not among an elite group of 20-50 sellers either. The Drop Shipping company couldn’t stay in business with just 20-50 clients. This means that you are selling the same things as hundreds to several thousand other Ebay sellers. Each of you is hoping for the same sales and probably the same customers – and you all bought the same item for the same price.

Second, 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.   Here's why:  When you sell an item you take in payment. This immediately puts you under the 30 day rule of the FTC (and Ebay).  Simply put, you must ship to the customer within 30 days of receiving payment.  Now, the Drop Shipper has not billed you, and therefore has not collected any money from you.  (They get the money from you once they ship, usually by a credit card on file.)  Since they have not taken any money from YOU, they are NOT under the 30 day rule.  In fact, there is no rule which says they need to ship, must get the item in or even sell to you! (YOu can be in line behind 100 other Sellers and the company only gets in 96 in the next order) 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 (or as above, understocked) and didn’t have it in stock when YOU needed it. I’m not saying this WILL happen, but it does happen and more often than Drop Shippers will admit.