Drop Shippers sometimes charge you a drop-shipping fee on top of their normal shipping charges. Usually, it’s a reasonable fee designed to help the Drop Shipper cover the cost of making the product-shipping box specific to your company.
Sometimes the fee is not reasonable. Some Drop Shippers want to “encourage” their customer base to buy from them in bulk, so they charge unusually high Drop Ship fees in the hope that their customers will buy quantities and avoid the per-item charge.
The truth is, they really don’t like being in the Drop Shipping business, but they hope that their customers will eventually be successful enough to convert. Yeah Right! Avoid these folks.
As far as a legitimate Drop Shipper fee goes, you just need to be aware of it when you factor in your own shipping costs. You can either:
- A) Absorb it out of your profits or
- B) Pass it along to your customer
Remember, Internet shoppers are used to paying for shipping. As long as you are not ripping them off, there shouldn’t be a problem. But sometimes, a product will regularly sell with a respectable margin, but that item or wholesaler in particular charges a hefty Drop Ship fee. It’s high, but it’s not unreasonable. Keep in mind that once you have that precious commodity, the paying customer, you need to do everything in your power to keep them happy and coming back. Do that by offering them fair shipping even if it means you make less on one sale. The goal is to have MULTIPLE sales from each customer.
Some, and I use the term – Quote -“Drop Shippers”; will try to charge you a fee for the privilege of buying from them. I will say this once- A REAL DROP SHIPPER will NOT charge you a fee to do business with them. Okay Fine. Does this mean that there are no real Drop Shippers that DO charge a fee?
The reason I said that was to keep you from falling into the “SubWholsaler” trap. A Sub Wholesaler is simply a middleman who is offering products from a real wholesaler or Drop Shipper with small markups and then Drop shipping the real wholesale products to your customers while standing in the middle of it all. Three problems with this
- 1) Your margins become super tight because of his markup. You will be less competitive when it comes to your price point.
- 2) Chances are that the Sub Wholesaler is ALSO capturing your customer information and then marketing to him or her for their own business.
- 3) They most likely will want a fee from you to start doing business with them.
Use your judgment here. At first, the Sub Wholesaler may appear to have a bunch of unique products that you can’t seem to find anywhere else. Guess what? Unless they have an exclusive arrangement with a manufacturer, you can almost certainly find the item from a REAL wholesaler. There are some companies out there that have arrangements to get specific name brands or licensed products, and they may charge a fee.
Just make sure to absolutely exhaust every single method of research before you decide that this wholesaler is the only game in town. Otherwise, if you want a home-based business that generates full-time cash, you probably want to avoid these folks until you have a good customer base and some cash coming in.