Aussie Wholesalers Newsletter - The Premier Australian Wholesaler Information
Source for Businesses In this issue: 1) "The Truth About Drop Shipping In Australia"
1) The Truth About Drop Shipping In Australia Drop shipping is promoted as being one of the best and
easiest ways to make money selling on eBay. At least that’s
what the owners of the countless drop shippers lists available on eBay want you to believe. It sounds easy,
simply sign-up for a wholesaler’s drop shipping service then
start advertising their products in online auctions or on
your web site. People buy the products, you notify the
wholesaler, pay the wholesale price & pocket the profit,
without having to lift a finger.
Is that really what happens? Is it really the secret to
your future financial success?
The concept of drop shipping first started in America many years ago, due to a VERY competitive wholesale market. Wholesalers were having difficulty selling their products for a decent price; so one clever person came up with the idea of drop shipping. The wholesaler would add a small premium to the wholesale price to cover the costs of extra handling of the item, and offer entrepreneurs the opportunity of selling the item for them, without having to carry any stock or deal with shipping. Once a few wholesalers started, it forced other wholesalers to do the same; otherwise they would lose their market share, and most likely go out of business. This is why drop shipping is such big business in America. This is NOT the case in Australia, as our market is nowhere
near as competitive. It’s only recently that a handful of
so-called wholesalers have started to offer a drop shipping
service. When you think about it, why would a wholesaler
want to be bothered selling just one of a certain item, as
well as packing & posting it? Obviously they wouldn’t
unless they were forced to, to keep their business afloat
as many are in America. Australian wholesalers don’t have
to do this to stay afloat.
Many of the drop shippers in Australia aren’t actually real
wholesalers (as the real wholesalers can’t be bothered
wasting their time with it). Some of them may be discount
stores that sell items at a discounted retail price, while others are businesses that actually buy from the real wholesalers, place a large mark up on the price and offer their services as wholesale drop shippers. In reality they are more like retailers. With the prices they charge for their products, it is exceptionally difficult for anyone to make a living by selling them on eBay. The prices for most items on eBay are already at heavily discounted retail prices, so you would be lucky to break even. The situation with Asian drop shippers is no different,
even though you would expect their prices to be cheaper.
Like the Australian wholesalers, they don’t have to drop
ship to make very good money, but some of them have
realised that they can obtain exceptionally high prices
for their merchandise by offering to drop ship to western
countries. With labour costs being so much lower in the
Asian region, it puts even more profit into the
`wholesalers` pocket. I recently checked the prices of
several items in a well-known Asian drop shipper’s
catalogue, namely digital cameras. These cameras were
selling for LESS on eBay, than the drop shipper was
charging. The Canon digital camera was available from the
drop shipper for $469.00, but was only selling on eBay for
around $430.00. A huge $39.00 loss (plus eBay fees) for
the poor person selling it, but a whopping 100% or more
profit for the Asian drop shipper.
In Australia, Asia and the UK, the only people who are
profiting from drop shipping are the drop shippers
themselves as they don’t need to offer the same
competitive prices to stay in business as is the case in
the US. Due to the high cost of freight, it is pointless
trying to sell items from US drop shippers to the
Australian market, and when asked, most US drop shippers
won't sell out of the US.
Why would you want to pay someone else an over inflated
price for just one item, when most wholesalers only have
a minimum order of no more than $500? Some wholesalers don’t even have any minimum order quantity - you can buy
one item at a time if you want! By buying directly from
the wholesaler, all the extra profit is going straight
into your pocket, and not to some middleman.
In summary, there is really only 3 ways to make money from
drop shipping:
1. Create your own drop shippers list, & sell it to poor,
unsuspecting newbies on eBay who don’t know any better -
not a very ethical way to do business.
2. Create your own web site, aimed at the US market, & deal with the US drop shippers. You could also try to sell on the US eBay site, using the US drop shippers, however this may not make you much, if any money, due to the huge competition from everyone else in America doing the same thing and forcing eBay prices down. If you are interested in starting your own web site, make sure you check out Worldwide Brands - the only eBay certified dropship list providers on the net. 3. Purchase products from a wholesalers, & offer a dropshipping service to people - you become the dropshipper. You purchase the products at wholesale, place a mark up on them, & ship them for people.
2) Business Success Tips - Tip #8 When choosing your eBay ID (or your email address) try & make sure that your ID isn't the same as your email. For example: eBay ID: 1234 By having your ID & email the same, it makes it very easy for
spammers to get hold of your email address, and before you
know it, your inbox will be filling up with unwanted spam,
illegitimate requests (pretending to be from ebay) for you to
change your password & more!
3) Essential Links & Resources Secrets To Their Success - Where
else can you read real life success stories from people who
are earning an amazing income from their internet businesses - the best part is, they actually tell you how they did it! Business.gov.au - An excellent site where you will find all the information you need on how to start your own business. Australian Business Register - Apply online here for your ABN, business name, and other tax related registrations. Business Licence Information - Find out if there are any licencing requirements for your business.
Copyright, Rachel Incoll, 2006 |
Put eBay on AUTOPILOT! Earn a serious income with a part-time effort.
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