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How do you make $ out of dropshipping ?

Discussion in 'Ebay' started by kismatconnection, Jan 8, 2012.

  1. kismatconnection

    kismatconnection Registered Member

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    ok so here is the question How do you make $ out of drop shipping ?


    1. Drop shippers are very hard to find
    2. Shipping rates from China to your country are way too high if i order one item it costs around $30 just for shipping
    3. No Authentic products
    4. Profit margin Shipping fee,Supplier costs , Ebay / Amazon listing fee, PayPal Cut
    5. High Completion ( when i do find some product and calculate all shipping + supplier fee prices go way high. how you people do it ?? if i order a lot will i have to pay customs tax and will i have to register my VAT ??? advise need can some one help please? can some one please show me right direction? i don't want to get banned by ebay or amazon for selling non authentic products
    Thanks
     
  2. kshatriya

    kshatriya Regular Member

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    1) Use dropshipblueprint.com Costs a lot but I think there's a fiverr gig that gives you access for cheaper
    2) Some dropshippers have distribution centres in NA. Take a look at dealextreme, it used to take weeks for the products to get to NA. Now they have distribution centers in the US and in Australia. If you want to simply start dropshipping, then take a look at some of the products they have in their NA warehouse, list it on ebay for a markup!
    3) Using the dropshipblueprint you can get real products.
    4) That's always the case, but if you set up your own website using a free ecommerce program and do some seo then I'm sure it won't be as bad.
    5) That's when you'll need to design your own website and make it look a lot better. You'll probably need to charge taxes and when your business grows consider shipping to other countries. That's when you'll need a lawyer and accountant to help you figure the other details out.
     
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  3. rco85

    rco85 Registered Member

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    about tax issue, how about it if i live outside NA ?
     
  4. kshatriya

    kshatriya Regular Member

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    I'm in the process of setting up a dropshipping website as well. I'm in Canada and I'm going to be selling solely within the United States through a dropshipper. I'm taking a look into this but am getting very few answers. Has anyone got an idea?
     
  5. Gamemaster21

    Gamemaster21 Newbie

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    How do you deal with refunds? Have you ever had to deal with any?
     
  6. kshatriya

    kshatriya Regular Member

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    I'm just starting out but the process is such that I'd set up a RMA and pay for the shipping back to the dropshipper. If anyone know more about dropshipping, I'd love for them to post in this thread such that we all can learn!
     
  7. genosse

    genosse Junior Member

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    1. Find wholesale lists, or the dropship hookup master list in the Dropship section of this forum, and then do your research. As you're starting off, you can also work with Doba or Inventory Source in order to at least get the contact information of the distributors that you want to work with. I'd suggest that you then set up direct relationships with the distributors. Then BUILD that relationship - just like working with your affiliate AM, work with your distribution partner.

    2. Where are you looking to dropship to? And what are you looking to dropship? If you're looking for legit name brand goods, you shouldn't buy them from China. This is another way to find dropshippers. Find the products that you want to ship, and then shoot the company an email saying you would like to sell their products. They'll either shoot you down, or refer you to a rep group (who can help you find the distributors that they work for) or directly to their main distributors.

    3. See above

    4. Depending on what industry you are in, profit margins online are typically very low. This is where the relationship building is important. Get to know your AM, and you will most likely be able to get special pricing if you're able to send them the business. Don't ignore revenue. There's nothing wrong with selling items for a small loss, or to break even in order to increase your sales $$$ with your source, build your feedback and keep your cash flow going.

    5. Figure out all fees involved, and make yourself a spreadsheet.

    You should be able to find distributors within the niche that you are looking for. Most major US distributors will require that you have a contact or registered agent within the United States. Some require that you have a US credit card. Lots of Canadians do business within the US as dropshippers, so it's common. It gets more complicated when you're shipping it back to Canada.

    In a nutshell:
    1. Request an RMA from your distributor if it's within the allowed timeframe.
    2. Pass the RMA number and shipping address on to your customer (As well as a prepaid shipping label if either you or your disty provides one. Most will not provide shipping for most returns, but many will provide free shipping of replacements).
    3. Disty will provide you with a refund once the item has been received and processed by them, less any restocking fees.
    4. You provide your customer with a refund.

    This can vary a little.

    If you have any other questions, I'll help as much as I can.
     
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  8. rocking11

    rocking11 Newbie

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    I personaly think affiliate programs are better. There might be lil less earnings but better then a lot more headache.
     
  9. rco85

    rco85 Registered Member

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    kshatriya, pls keep us update with your ideas and project :)
    i'm very insterested and intend to do something like that. Will Adwords + dropship make profits ?
     
  10. ying-yang

    ying-yang BANNED BANNED

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    i am looking to get into china and droppping, so much so im going to china soon, to find things for myself.

    only way to do it is do it urself. i guess ??? but i am looking to drop wholesale , not individually, well thats my plan, who knows once im there. ?
     
  11. kshatriya

    kshatriya Regular Member

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    Well genosse seems to know a lot more about this.

    Once I get all my information, then I may setup a thread so that everyone can benefit.


    @genosse. What about the tax issue in my case. If my company is based in Canada, and the dropshipper is based say in Texas with the majority of my customers in the same state as well, then how do I manage the taxes. The dropshipper wouldn't pay any taxes and I'd have to charge the customer taxes.

    Can you elaborate more? Should I/Would I be able to set up an LLC in say Nevada?

     
  12. genosse

    genosse Junior Member

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    I can't speak to all of the specifics (this is something that you will have to talk to your lawyer about).

    However, doing business with a wholesaler, you will not be charged tax, because it is for resale purposes.

    In regards to Texas taxes, because it is your business entity (in Nevada for example) doing the business with the customers, you will not be required to assess sales tax. Essentially, it is the burden of the consumer to pay taxes on online goods.

    That being said, this will probably change in the next few years as more brick and mortar stores flex their muscles. It's on a state by state basis, but that's the way the majority work.
     
  13. kshatriya

    kshatriya Regular Member

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    Awesome! I'll do that. I've been looking at some of the other websites established by dropshippers and they don't charge any taxes as well. If this is the case, (and I'll obviously check this with a lawyer) then I can get started a lot earlier than I thought!

    I've taken a look at xenix's SEO for ecommerce model and I should be able to use that.

    How are you things coming along genosse? Any tips for a new guy?
     
  14. genosse

    genosse Junior Member

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    Most of my experience comes from working for the distributor, rather than on the other side. It gives a good luck at what works and what doesn't for several different types of online stores. :)

    As far as tips go...

    Start slowly, so that you don't get overwhelmed and then scale up as you get the hang of it. For example, ask your account manager for their top selling 100, 1000 or whatever items. Typically the top 20% of the items they carry will account for 80-90% of their total sales.

    Be someone who your account manager wants to work with - Be reasonable, competent and listen to their ideas. As a small seller, this will help you to gain some attention that might otherwise be reserved for the big guys.

    Find a way to differentiate yourself, and learn from your competitors. See what they're selling, their tactics etc.
     
  15. Ronnie9200

    Ronnie9200 Junior Member

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    Research is everything! Spend your time talking to manufactures directly. This is by far the best way.
     
  16. B7s4quattro

    B7s4quattro Newbie

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    with everyone doing the homework for you, they might as well start the business up for you too....
     
  17. petromir

    petromir Newbie

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    I did a little dropshipping long story short a lot of troubles little earnings.Do affiliate instead.