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The Ugly Side of the Dropship Wholesaler |
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by Michael Ellis (5/31/2006) All business owners, large or small, online or offline, need something to sell. And getting something to sell that will actually sell for a profit is one of the biggest hurdles to starting a home business. Dropship wholesalers seem to offer a solution to this problem. A dropship wholesaler will sell products to you for wholesale and dropship (ship) those products directly to your customer without you ever needing to store any inventory. The problem is, however, most of these dropship wholesalers fall into one or more of the following categories: #1 Middleman A great majority of the wholesalers that we see advertised these days are nothing more than middleman that cannot provide you with products at a sufficient discount to make any money. True wholesalers seek to move large quantities of products (bulk quantities). They rarely waste their time and effort advertising to small time operators in the hopes that they can move a few dozen orders. Therefore, it is common for another fairly large company to come along and purchase these products in bulk from a true wholesale company, add a profit, and then market the products to other companies in light-bulk orders. The other companies then ad a profit and then sell these products individually (dropship or no dropship) directly to you for their definition of wholesale. If you buy products from these middlemen for resale, you'll quickly find that your competition is selling the same products for much less than you. Check out Wholesale Product Distributors and the Ugly Middleman Chain for more information on wholesale middleman. #2 Memberships with worthless products Another common dropship wholesaler arrangement comes in the form of the purchased membership. In this scenario the company is very willing to sell you all kinds of products at wholesale (again their definition of wholesale) prices; however, the company wants you to purchase a membership before you can purchase any products. To make matters worse, the company usually doesn't even give you access to their price list until after the membership fee is paid. These types of arrangements will do nothing but cost you time and money. #3 Non-established operation Another less known scenario is when the company is offering legitimate products at great prices, but they just aren't experienced with the business and therefore can't provide the level of service that you need. This is usually the case with many new start-up wholesalers that mean well and start out well, but once they have a few companies purchasing products from them they start to get overwhelmed, and eventually disappear. In conclusion, when trying to find a legitimate dropship wholesaler, stay as close to the true wholesaler as possible (no middleman), as well as, stay away from any membership programs and wholesale companies that don't have a historical track record of business. Author - Michael Ellis (Email: michael@victorykey.com) Talk more about this topic in our VictoryKey Internet Marketing Forum
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