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Starting e-commerce site without inventory space or any available drop shipping programs

Discussion in 'White Hat SEO' started by moneycakes24, Jun 26, 2014.

  1. moneycakes24

    moneycakes24 Newbie

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    Hey guys I was wondering if I could get some feedback.

    I've created a website for crowdfunded products as a mini project with a friend of mine.

    We weren't serious about making this a legitimate e-commerce business and were initially going to make it a database for crowdfunded products. Since the site has been up, we have had 6 people try to order products off of the site and it's made us rethink turning the site into a direct store for said products.

    The big issue is that we don't have any money to invest in warehouse space and the overwhelming majority of the product creators whose products we would be selling do not offer a drop shipping program. On top of that, we are located in Canada but would prefer to target the US for obvious reasons.

    Can we actually get this website off the ground by charging a 10% (or whatever percentage would make sense) markup on every product and then ordering the product from the product creator directly with the customer's shipping address? We understand that this would require a lot of legwork on our part but we are definitely up for it.

    Please keep in mind that this would not be a long term strategy and we would only employ it until we had the funds to either rent warehouse space or most likely get an order fulfillment company with warehouses in the States and other countries to do it for us.

    Do any of you guys have any feedback in regards the plan above? We're really curious.



    By the way, below is a list of things I brainstormed last night while trying figure this whole idea out. I know this will make the thread fairly long so only read it if you are curious or interested and feel free to comment on any of these if you have something to say.

    1) If we use Paypal, it could hold the funds for up to 21 days so the first bunch of sales would need to be charged to a personal credit card belonging to me or my partner.

    2) The shipping policy could be different for each product because it would be subject to the shipping policy of the individual product creators from whom we would be ordering the products on a product by product basis.

    3) I'm not too sure about the legality of any of this and how taxes would apply in this case.

    4) It would be obvious to the customers that the product they received was shipped by the manufacturer and they would most likely receive a checkout summary detailing taxes, shipping charges, and the actual price of the product. Therefore, a price markup might not be a good idea (or would it) and instead, we might want to institute a transparent "processing fee" on top of the actual price instead. The issue there is, if people see this fee, would they even bother purchasing on the site?

    5) How would this type of e-commerce model handle warranties and returns? Could we just direct them to the manufacturers?

    6) If we were discovered to be doing this by the individual product manufacturers, would they care? We wouldn't be undercutting them and they would be making sales thanks to our ability to bring them customers so I doubt they would have any problems with it.

    7)The way I see this is that we would be creating a short term affiliate program where one didn't exist (at least for the majority of the manufacturers we would be dealing with). That is to say that we would be sending them sales through the marketing strategies behind our site but instead of getting a percentage commission from them, we would take our commission directly from impulsive customers who really don't care what price they are paying. We have had a few people try to buy products (even though the site has no functioning checkout system) on our site with higher prices than the manufacturers were offering so there are obviously people who just see something they like and are willing to spend the money without any real research.


    This is a long shot and me and my friend know this so that's why we only want to do it until we can move onto something more feasible.​

     
    Last edited: Jun 26, 2014
  2. pxoxrxn

    pxoxrxn Supreme Member

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    You can get an etsy style CMS, or make one using Drupal. Contact all the crowd funded product owners and tell them about your proposal. Allot of these people are true entrepreneurs and will pursue any opportunity to sell more items, even if it means adding their products to another site ect...

    You can sell it even harder by saying "We are just like you when you started, small, but we want you to be a part of our growth."
     
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  3. wilsjac1

    wilsjac1 Registered Member

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    I don't see anything wrong with this idea, In fact i know many people that use this strategy you are just drop shipping , you are making money they are making money, everyone is happy i would go ahead and go for it. PM me if you need some more information on drop shipping i have a few pretty good suppliers that work well.
    Goodluck!
     
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  4. crashdi

    crashdi Regular Member

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    join salehoo, read their blogs and checkout their directory. Trust me, it will be worth it
     
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  5. moneycakes24

    moneycakes24 Newbie

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    Hey thanks for the feedback. I tried to PM you but it said I needed more posts. I'm definitely interested in what suppliers you are using, it would definitely come in handy when we do move away from this approach.
     
    Last edited: Jun 26, 2014