It’s was the summer of 2004 and I was in the computer lab of a local college, clicking around my Ebay admin page trying to re-ensure a concerned Ebay buyer that—one, the product that was sent to him was quality and two, trying to apologize for the way the package was handled(the customer sent my a picture of the package and it look like HELL, literally!) . Then it dawned on me! There is no way anyone truly build a profitable business online with dropshipping ..no way!
Problem#1. The products you send might be of good quality and/or might be missing other elements.
Since you never see the product in the warehouse..You will never truly know the quality of the product and God help you if you sell the product to include different accessories that are needed..those might no be included for what ever stupid reason and once the customer finds this out, your going to get a complaint…you better believe it.
Then you will have to call up the wholesaler or who ever is doing the dropshipping. It happen to me when I tried to do dropshipping as a wholesaler…what was my mistake? Accidentally putting my return address on the packing instead of the seller to the customer…sooo…the customer complains to the seller and the seller complains to me, both me and the seller lose credibility in the customers eyes…Not Cool
Problem #2. The profit margin for most items(not all) is too dawn low!
Because of the cost of shipping and the fact that the company or wholesaler you are doing business with wants as much profit as possible, including the reality of thousands of other dropshippers posting in the same platforms at low prices, make the probability of making a sound profit very small. The part about thousands of other resellers is key because who the hell wants the competition anyway!
You are much better off creating your own product and selling wholesale or retail directly for a larger profit margin, yes the volume will be much lower, but the piece of mind will be there.
Problem#3. Product availability is very shaky.
Working with one wholesaler with hundreds or even thousand of people selling the same products, not only do you have to worry about low cost and competetion with other sellers, but you have to worry about the wholesaler running out of product, this can cause problems..
I remember a experience that I had with a wholesaler that had a great product that was being offered to dropshippers on Ebay and Amazon…but guess what… a seller would sell 4 or 5 pcs of this particular product for $150 to $170 on Amazon or Ebay, only to find out that the product was out of stock when the time came to order…Not good…Lots of angry customers….no really sales…..lost income….Ok
If you are considering doing dropshipping be sure to connect with the right provider to avoid these error, because it will affect your bottom line…Thank You…Mike Spence