Expert: Marvinator - 7/30/2006

Question
Hi there sir,

A fellow ebayer had advertised a website for free, on ebay (uk), which state that they have contacts to suppliers, who sell the electronic products, listed on their website (www.elitepublications.co.uk), i have read their terms and conditions fully, and agree to the fact that its the suppliers responsibility to deliver the product to the selected destiniation. As you are an expert, and have been with ebay for a long time and probably with other companies, would you have any knowledge, to wheater or not i can trust them.Thanks.

It would be agreat help if you can help with my situation, as you are my last hope, i have searched the whole net for an answer to this.

Thanks again sir.


Answer
First and foremost, I trust nothing which is free.  Listing a website location in an auction is merely a way of driving people to their online business, which is both against Ebay rules and also suspicious in their business dealings.  After all, a REAL business wouldn't have to get customers in such a manner.

Next, let's take a look at what this 'website' is offering.  What they are offering is to be a 'go-between' or "distributor" for another company.  BUT, in fact, they have no stock!  What this means is that you are dealing with a company who then turns to a drop shipper in order to deliver the goods to your customer.  THis is called "Layered Drop Shipping" and though a perfectly good business, may not be what you want for an Ebay business.

Let's go through this a step at a time, so you can see the problems.  First, there is the fact that you're dealing with a drop shipper.  Here is how the drop shipper works:
You know the drop shipper carries the Widget.  You list the Widget. You sell the widget.  You collect the money and then you order the Widget from the Dropshipper, who then ships the Widget to your Customer.  

Now, here are the problems in dealing with a drop shipper. 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 to 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, 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 customers, either. You and your customers, regardless of how many you have 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 or plans to discontinue the item for one reason or another. In such cases they are not obligated to tell you anything other than the item is out of stock. (Remember, according to both Ebay and the FTC, you are the seller and YOU must ship the item within 30 days.  The Drop Shipping company, as your supplier, is not held by this rule.) I’m not saying this WILL happen, but it does happen and more often than Drop Shippers will admit.  Now, let's add in that extra layer, of dealing with a Distributor.  Now, you're two layers away from the company and have to deal with both companies as far as getting your orders out and to your customers.  And there is STILL no guarantee that they will have the item when you sell it.  Neither the Distributor nor the Company owes you a thing in that regard.  

I personally would stay away from a situation like this.