Dave-IL
07-28-2005, 01:06 PM
Indy had some great points in his thread, I would rather open a seperate one with some different ideas then clutter his.
Don't discount dropshipping out of hand. Before we were purchased by a larger company, we were doing 2.5 Million in sales with 3 people working in a 3 room office and every item was dropshipped.
One of the keys is to see if the manufacturer will do the dropshipping for you. In our industry it wasn't a problem at all. In fact all of our vendors will allow us to also include our own marketing material in thier packages as long as we provide them. This included flyers and reorder forms. They also put labels directly on the finished product with our name on it, so when reordering time comes around they have our 800 number and website. Make sure you review the vendors return policy to make sure it works for you also.
There are some drawbacks, such as some strict order processing times, which means at times you may lose emergency orders. Though I found having vendors in different locations across the country helps that. The time difference for the west coast has saved us several times.
You also might have a little less profit because you are buying single units instead of bulk, but you have to weigh that against your time packing, shipping, keeping inventory on hand, and storage space. Also you will find when you are doing enough business you WILL get those price discounts back, if you just ask for them.
Its not right for everyone but it is a valid business model if you make sure your bases are covered with it.
Dave
Don't discount dropshipping out of hand. Before we were purchased by a larger company, we were doing 2.5 Million in sales with 3 people working in a 3 room office and every item was dropshipped.
One of the keys is to see if the manufacturer will do the dropshipping for you. In our industry it wasn't a problem at all. In fact all of our vendors will allow us to also include our own marketing material in thier packages as long as we provide them. This included flyers and reorder forms. They also put labels directly on the finished product with our name on it, so when reordering time comes around they have our 800 number and website. Make sure you review the vendors return policy to make sure it works for you also.
There are some drawbacks, such as some strict order processing times, which means at times you may lose emergency orders. Though I found having vendors in different locations across the country helps that. The time difference for the west coast has saved us several times.
You also might have a little less profit because you are buying single units instead of bulk, but you have to weigh that against your time packing, shipping, keeping inventory on hand, and storage space. Also you will find when you are doing enough business you WILL get those price discounts back, if you just ask for them.
Its not right for everyone but it is a valid business model if you make sure your bases are covered with it.
Dave