The Dropship Forum .co.uk

[john b]

while looking into drop shipping and trying to find suppliers i have noticed that a lot of so called drop shippers charge a monthly or annual fee in order to obtain your products from them. the way they justify this is that they claim to give you the goods at the same wholesale price that they get them for and they only make a profit from charging these fees.

personally i think it sounds like bs to me. i would never expect to have to pay a fee in order to be supplied goods from a true wholesaler, whether it is through drop shipping or not. i dont believe either that these people are not adding to the price of the products, especially when most of their prices seem to be not much lower than general retail prices that are available anywhere on the web.

why would they work their business this way? surely it would be easier and a lot less work for them to just charge you a one off fee to introduce you to the real wholesaler, rather than having to do all the admin involved in taking all your orders throughout the year and then keep passing them on to the wholesaler. some of these companies are offering this service for as little as £9.99 a year. and they expect me to believe that for that they are prepared to sort out what could potentially be thousands of orders, and not add a single penny to the price of these orders. as a businessman, that is something i could not resist nor afford not to do.

what are everyone's views on this practice?

if anyone has any thoughts based on experience of using these services please feel free to add your two pence.

[IndigoSiam]

Interesting john b...

Would you pay a fee to join a health club? where they charge a joining fee and a monthly membership fee! Most do and I guess it ensures that the right kind of people join.

I'm still new to this but I'm begining to see that there are a few good dropshippers and many bad ones.

Could you enlighten me as to which dropshipper states that they sell on at wholesale without adding to it? Surely, non can afford to do that?

I take all your points onboard and feel that it opens up a very good question...

Of course you can always buy lists of wholesalers, its just finding a geniune one.

[john b]

i think joining a health club is differant. this is more like tesco's charging you to go in their store and then you still have to pay to buy your shopping from them. from what i am finding though, it is common practice for drop shippers to charge an annual fee. i just think it is misleading to claim that they do not make a profit from the actual goods they sell to you. especially when you check their prices to those that sellers are currently charging on ebay and you find that you can buy the exact product on ebay for less than most drop ship companies are offering them to you for. obviously some people are finding suppliers that are cheaper than most.

[Dropship_Daddy]

I think many of us who have started out in dropshipping have come across this at one point or another (myself included), but there are genuine dropshipper suppliers out there that do not charge a fee but many do charge to ensure that the dropshipper is 'genuine'.

Yes, a health club is different, you are paying to use thier facilities rather than to supply them, that is their nature. Their facilities (supplements, etc) more than likely come from genuine wholesalers or direct from the manufacturer (some wholesalers of who do offer dropshipping, but dont advertise it) but its their business to sell to their members, not to dropship them. Some maybe do advertise on EBay or their own website, but doubtfully many do because of time and costs. For one, they have to pay their EBay fees even if the product does not sell the first time around, then they have to get somebody to sell them which costs more money to employ them, or at least costs them time if they do it themselves, then they have to compete. So after all that, in my mind it would be pointless listing unless you get really good prices direct from a manufacturer or have the latest sought after product in the industry first.

The big challenge is fishing out the genuine suppliers to the middle men, but unfortunatly thats just the way it is. ATSDistribution are a good company to use, yes they charge you £40 to signup of which if you subscribe in a certain amount of time they give you £20 of products to resell and their delivery and communications are really good.

Hopefully, the way I see it, like most other competition on the 'net', once all of the big boys emerge it eliminates most or all of the small fries. I see this happen in America, a lot of the genuine big boys are now eliminating the smaller competition, usually the middle men, which then starts to make the market more stable because the middle men simply cannot compete on price to the genuine wholesaler/dropshipper.

I have an ink cartridge business on EBay now simply because I cannot compete anymore and also my main product line was Epson compatibles, and now that Epson are clamping down on the amount of manufacturers of Epson compatibles it makes it harder to get hold of the stock.

Don't forget, dropshipping is still a young industry over here whereas it has been big in America now for some years. There you can see the difference. Just keep plugging out those genuine ones until you have about a dozen of them behind you, and your in the right places to get company reveiws to see if a company is genuine or not.

I hope this helps.

DD

[john b]

yes, i have been looking at ats distribution today, i have not really seen anything bad about them on this site and their prices are not too bad. in a way i think i feel better paying forty pound to a company that i know is more straight up. the sort of companies i am talking about in this thread, that charge £9.99 and claim to not make any profit on the goods they supply you, worry me. it is what i consider to be too good to be true for starters, starts alarm bells ringing.

i am definatly thinking aboutabout starting with ats, the only drawback i can see is a lot of their products are maybe not too hot to sell on ebay. i was looking at their software and didn't see anything that would interest me at all. especially as most people tend to download their software these days.

[Kenix]

Hi John, I do agree with your point of view. As what I have mentioned in another thread, there are a number of factors to look at this fee issue.

First of all, one of the reason for dropshippers to charge a initial membership fee is to protect their own resellers, but buyers coming to the dropshipper websites and pretend to be resellers to buy their products which they offer at wholesale or bargain price(this is if only their prices are good). I am not totally agreeing that dropshipper whould charge a fee, but below is another view on this...

Second issue to consider is, if the dropshipper is able to provide a fair environment for both parties, resellers and dropshippers. What I mean by this is, I just feel that prices of all products should be readily available to resellers on dropshippers website even before resellers pay for the membership fee. If prices are good, then resellers will make a fair decision, and if dropshipper feel that they want to charge a fee to protect resellers, then at least this is more fair to both parties. Business relationship is established under a transparent model.

What do you guys think about this??