Has eBays Wholesale Directory Killed Drop Shipping?

The answer is probably yes. The premise of dropshipping is simple. A customer orders an item through the dropshipper, the dropshipper then places the order with a wholesaler who he found through a wholesale directory. The wholesaler then charges the customer and ships the goods. The dropshipper then earns a commission. Sounds like the perfect business to be in – no need to carry stock or make trips to the local post office. Somebody else does the hard work.

Also sounds like the perfect business to run through eBay or Yahoo auction. But there is a down side, and it’s the dropshippers who are being hurt by the wholesalers. Firstly, the wholesalers themselves realized it’s in their interest to have an eBay presence, thereby cutting the dropshipper, out of the picture. Secondly, by the wholesaler running out of stock.

This could be disastrous for an eBay based dropshipper. The rules for eBay are simple. You, the seller, MUST be holding the stock before you conduct any eBay auctions for those goods. If you don’t then either eBay will blacklist you, or if you’re unlucky enough to make a sale for an item the wholesaler has zero stock of, your buyer will lump you with negative feedback. Too many negative feedback reports, and you’ve pretty much blacklisted yourself. That makes for one dead dropshipper.

Is There A Solution For The Dropshipper?

Yes, and it’s pretty simple. Don’t use eBay. There is still a massive untapped global market for people wanting to buy goods at cheap prices and for drop shipping firms to make money. You just need to think a little "outside the box". It means going back to the good old days of direct marketing.

A very profitable dropshipper business could be run by sending your printed or emailed catalogue to targeted groups, like the parents of your local school or scout troop. Leave catalogues in the foyer of your local church or even your doctor.

You can still use services like Paypal or Bidpay to accept payments, but you are now targeting an audience that may not usually be exposed to the eBay based wholesalers or drop shipping companies.

About the Author

James Robinson is an Australian writer, broadcaster and commentator. He lives in the world famous Blue Mountains of Sydney.

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