Drop shipping does have its downside. For example, it creates customer service challenges as orders can get mixed up, inventory levels change, and product returns become complicated.
Profit margins for drop shipped items are often razor thin too. For example, I work with a manufacturer of apparel that charges an additional $10 per item drop-ship fee on top of the item's cost and any shipping charges. This brand's products often sell for about $59.99, with a cost of around $30. So a product sold from inventory has about $29.99 in margin while a product sold via drop shipping is at $19.99. If a retailer offers free shipping on orders above $50, an additional $5 to $10 of profit is also gone. Add an average return rate, payment card fees, and the cost of pay-per-click advertising, and there may not be a lot left.
With these potential challenges, drop shipping may work best in conjunction with inventorying some products.
In a dropshipping thing, the retailer does not receive, stock, store, pull, pack, or ship products. All of these tasks are time things, which means drop shipping saves time. In a ecommerce business where the storeowner may also be the shipper, this additional time will be available to actually sell products, which should benefit the company. In larger operations, the timesavings may result in a reduction of labor costs.
So now a good friend tells me that a two year old company called DS Domination (the DS is for DropShip I think), has blossomed finally.
Evidently the new company INFINii has been in the plan since the start of DS Domination and now that the company has two years and over two billion in sales under it's belt, they've decided to Launch what they call the Next level of DSD.
It appears the strong offering is training to actually do what I've thought about doing, and that's selling on Amazon. But more than that, they talk about CO-OPs where a certain group of folks, really anyone, decide to pool their money and buy bulk goods from China for cheap and sell them on Amazon as 'Fullfilled by Amazon'.
3 great things to know about INFINii DS Domination For Dropshipping and Home Businesses
Why should this interest me? I'm into alkaline water and have received many email offers from China based companies trying to sell me Alkaline water pitchers for like $6ea in lots of 100. I've seen these types of things for $29 at the cheapest, so yeah — I can see the potential.
I also live completely off the grid so Solar Battery chargers are something I've bought a few of on Ebay as backup for emergencies. But that's been from Americans selling products.
For instance I bought a Morning Star charger on Ebay for $179. but could have bought the same thing without the brand direct from China for $49.
Am I bold enough?
Can I do it?
We'll see. I'll keep you posted.
INFINii DS Domination isn't even live yet and I am already seeing possibilities here..