“Drop Shipping”

[Traditional Tet]

Drop Shipping is just the physical version of Arbitrage.

 

[BelUwUga]

As a no-reputation, no-leverage, new business they are going to eat you alive with the drop ship fees. The way these scams work is to externalize their sales costs. They only need to realize them when the actual sale happens. Furthermore, you don't do enough business to work with true manufacturers. You're already losing margin being several steps further down the supply chain.

Successful strategies are closely guarded secrets. The sky is the theoretical limit on profits if you're willing to do the legwork. The systems scale well if you plan well. Why the fuck would anyone ever want to share that with someone else? These schemes are shared because the underlying business model isn't profitable. They need you buying in or paying a cut for their non-specialized "connections" to make their nut.

I cannot legally discuss the market I worked in, specific vendors, or other specific details but I can offer some generalized advice:

• Manufacturers and high level distributors are infinitely more likely to authorize drop-shipping if you can warehouse a certain level of merchandise. A small warehouse or using a spare room will pay for itself if you keep the right inventory. These are your bread and butter earners. Don't stock fad items at all if you can help it.
• Get your hands on the best earning SKUs and look for anything you can reverse engineer to see who your distributor is buying from. Brush up on your Mandarin, get some stimulants, and WeChat. If you work to their schedule and to their language most manufacturers have no loyalty to their distributors.
• Get your own corporate logistics account. Freight discounts start at 80%, parcel is 20-50%. They also have good, reliable partners to refer you to for services. Lots of freebies for small firms. Most importantly this gives you control over shipments. Distributors can bill labels to your account, this is nothing new to them. It also removes one of their major reasons to demand a fee for drop shipping.

My former employer did six figures of orders every year for eight figures in gross revenue. I worked directly with our procurement and vendor teams and ran all logistics. If you have any questions let me know.

 

[murdered meat bag]

As a no-reputation, no-leverage, new business they are going to eat you alive with the drop ship fees. The way these scams work is to externalize their sales costs. They only need to realize them when the actual sale happens. Furthermore, you don't do enough business to work with true manufacturers. You're already losing margin being several steps further down the supply chain.

Successful strategies are closely guarded secrets. The sky is the theoretical limit on profits if you're willing to do the legwork. The systems scale well if you plan well. Why the fuck would anyone ever want to share that with someone else? These schemes are shared because the underlying business model isn't profitable. They need you buying in or paying a cut for their non-specialized "connections" to make their nut.

I cannot legally discuss the market I worked in, specific vendors, or other specific details but I can offer some generalized advice:

• Manufacturers and high level distributors are infinitely more likely to authorize drop-shipping if you can warehouse a certain level of merchandise. A small warehouse or using a spare room will pay for itself if you keep the right inventory. These are your bread and butter earners. Don't stock fad items at all if you can help it.
• Get your hands on the best earning SKUs and look for anything you can reverse engineer to see who your distributor is buying from. Brush up on your Mandarin, get some stimulants, and WeChat. If you work to their schedule and to their language most manufacturers have no loyalty to their distributors.
• Get your own corporate logistics account. Freight discounts start at 80%, parcel is 20-50%. They also have good, reliable partners to refer you to for services. Lots of freebies for small firms. Most importantly this gives you control over shipments. Distributors can bill labels to your account, this is nothing new to them. It also removes one of their major reasons to demand a fee for drop shipping.

My former employer did six figures of orders every year for eight figures in gross revenue. I worked directly with our procurement and vendor teams and ran all logistics. If you have any questions let me know.

the point of the tiktok/shopify dropship is to make money doing very, very, very little work. renting storage and holding inventory defeats the purpose because now youve got expenses and merch to unload.

at that point youd might as well go full on retail.

 

[Pee Cola]

I'm old enough to remember when drop shipping was a legtimate process used by actual businesses as a way to manage inventory and/or working capital. Normally it would be either a manufacturer or their authorised importer/distributor who'd offer this service to their bigger resellers. This was nearly 20 years ago.

The upside to this for a reseller is that it'd save them from having too much capital tied up in inventory. It may also reduce shipping costs of the item to the end user if the manufacturer/distributor was getting a price break from their courier company (which may or may not get passed on to the reseller). YMMV.

The downside is that price breaks you'd normally get for buying items in volume may be non-existent if each drop shipped item is invoiced separately, irrespective of whether or not they're contained in a single order. That said, I understand why suppliers would do this, as it's obviously more work for them to organise delivery of 10 items to 10 different addresses than it is to organise delivery of 10 items to one address. Again, YMMV.

Spoiler: PL

In the early-mid '00s, I had a business specialising in selling network gear, along with installing broadband and VoIP connections. It was a part-time business, so I only kept my biggest selling lines in stock; anywhere from 10-20 units per month across several products, thus achieving a price break and keeping my supplier happy. For things I'd only sell 2 or 3 units of a year, drop shipping from my main supplier was really handy.

These days it seems like drop shipping means dumb fucks selling cheap shit from Wish to even dumber fucks that can't even spell "wish". I wouldn't go as far as to say it's a grift, but it does seem like the middle men selling this drop shipped gear add absolutely no value to the transaction at all.

 

[The golden neckbeard]

I had my own business procuring shit for the government pre 2019. I did pretty good. Government procurement is way more profitable then just buying garbage on wish and reselling it...the only qualification is being the lowest bidder generally..

The key is to get on sites www.findRFP.com and read the proposal requests and try to subsitute it with something you could find on Alibaba and drop ship...send in your bid and hope to be the lowest. The best place ideally to start is find your local government bid lists at sites like Bidnet and Demandstarr. Heck maybe even check your county websites...thats how you start if you dont have alot to work with. You can incorporate as an LLC which works best for the role because if you fuck up you can just dissolve and all liability ceases for you, you just a make a new LLC

For example I won awards for 20,000 dog bowls for an emergency agency on the west coast that manages tsunami preparedness...ive altered the details a bit as to not dox myself but anyway all my competitors used domestic sources while I went straight to India mart and got a quote myself for a full container of dog pails. They took care of every aspect including shipping, all i had to do was pay for the customs clearance. Anyway turns out my competitors were just getting it from the same guy i was getting it from but a 3rd party was importing it and add 40% on top of my price.

I made over $29000 on that deal alone. I never saw the product, never inspected it. It went straight from Mumbai to Los angeles... Sent my invoice once i got the packing list.

Its alot of paperwork but its actually very easy if you are willing to constantly look. I think I made around 97k my first year. Covid sort of soured the business tho for me i let it die. Can't say i needed the money after buying Link

If anyone has any questions i would be glad to answer them. There are thousands of government opportunities posted daily. Ill go over anything you want, always here to help a fellow farmer

 

[Gar For Archer]

the point of the tiktok/shopify dropship is to make money doing very, very, very little work. renting storage and holding inventory defeats the purpose because now youve got expenses and merch to unload.

at that point youd might as well go full on retail.

Agreed… while these are interesting insights, it’s not really relevant to the ““victims”” being targeted by these scams, because they don’t WANT to put in the effort. If they did, they wouldn’t be drop-shipping on Tiktok.

 

[murdered meat bag]

Agreed… while these are interesting insights, it’s not really relevant to the ““victims”” being targeted by these scams, because they don’t WANT to put in the effort. If they did, they wouldn’t be drop-shipping on Tiktok.

It's incredibly low effort, starting at 4:14 you can see all the steps to setup a "store" when you play it back quarter speed.. it's obvious that most people will use the same distros to sell the same shit with the same prices to the same group of people. 1 sale in 1 day and we don't even know if it's a real sale or the youtuber purchased it themselves.

this vid is from this year with the 4 stores being given away at the end.. dude had a loss of $900 or so after the trial run. but the comments are full of people hoping to win the store because the hardwork is over and the winner can coast out of poverty.

 

[Fivehead]

Is POD t-shirts/merch pandering to niches still a profitable business venture in 2022? Anyone have success with this?