5 Dangers To Bulk Drop Shipping Profits

5 Dangers to Bulk Drop Shipping Profits

by

tiger zen

Bulk drop shipping is turning a profit on selling case lots to businesses from a wholesale supplier. The manufacturing supply chain needs bulk drop shipping, otherwise business large and small would all have to buy directly from the factory! Buying directly from the production line isn t a great system since factory owners don t need the added chores of advertising and customer service on top of producing a quality product. As a bulk drop shipping entrepreneur you are providing that service of transaction expediting between a business buyer and wholesale supplier. When these transactions sour, you are often the one left with the penalties as neither the buyer or supplier is willing to suffer any losses. When developing your bulk drop shipping e-business, beware the following 5 dangers to your bottom line:

Bulk Drop Shipping Danger #1: Vendors Unwilling to Ship Directly to Buyer

The best bulk drop shipping web sites are expert information handlers. The back-end system of the purchase web site should handle the shopping cart transaction and then send the shipping fees and wholesale price straight to the vendor. wholesale vendors and suppliers then ship out the order to the business customer. Don t get dragged into handling the shipping of liquidation items or you will be doing more work than what is worth it. After all, if the wholesale supplier or vendor can ship to you the drop shipper, why can t the company ship directly to the business buyer?

Bulk Drop Shipping Danger #2: Soliciting Buyers With Tight Timetables

Advertising to the wrong kind of buyer is a time-bomb waiting to go off! Bulk drop shipping wholesale goods is best suited for business to business transactions, not an end consumer. Even so, don t look for business buyers with very tight timetables from when they order inventory to when it must be delivered. Superb business to business drop shipping seamlessly sends the order information directly to the wholesale vendor and products ship within one to three business days. However, delays in product handling and shipping do occur, and promising unrealistic delivery times may end up costing your business when buyers return late products or cancel orders altogether.

Bulk Drop Shipping Danger #3: Limited wholesale Items to dropship

The most successful business to business drop shipping web sites have thousands and thousands of items for buyers to select. Remember, drop shipping is primarily a transaction service business. The chief reason a buyer wants to use YOUR bulk drop shipping website over another is the availability of wholesale products. Even business inventory buyers want to one stop shop! One order through a drop shipping e-business can contain items from multiple wholesale suppliers C a good thing for everyone involved. Limiting your e-business to bulk drop shipping only one wholesale supplier or only one type of product reduces your website appeal and therefore number of orders.

Bulk Drop Shipping Danger #4: Requiring Minimum Orders

The bane of buying business inventory for any company is a minimum order. As a bulk drop shipper, don t do business with wholesale suppliers and vendors requiring any minimum order larger than a complete case lot. Dealing with wholesale vendors that have minimum orders is being a drop shipper selling with one hand tied behind your back. Buyers of wholesale goods know how many cases of items they need, and minimum orders only edge out smaller business owners. Don t rationalize a minimum order of X case lots as business buyers will order greater quantities than they need and give you greater profits. Instead, your business customers will find someone else selling the product they need in the case lot amount they can afford. Without a minimum order you make more profit with the many small buyers now eligible to buy wholesale stock from you. Many wholesale suppliers may even use your bulk drop shipping e-business just to offer these smaller transactions of one or two case lots so they do not need to offer this option to their larger buyers.

Bulk Drop Shipping Danger #5: Agreeing to Too Tight of Margins in Price

All bulk drop shippers need freedom to negotiate with each of their buyers to maximize the profits for both their business and the wholesale vendors. wholesale business buyers all have different needs. Some are looking for a break on shipping costs. Others want to know can they get a better price by purchasing many case lots of one item? When you negotiate your mark up on a wholesale vendors goods, make sure you leave your e-business plenty of wiggle room to handle these unique transactions. Making just a small percentage off the sale of a wholesale case lot seems reasonable in the beginning, after all you didn t make it, store it, or ship it. However, business customers will expect customer service from you. A small markup percentage won t cover the costs of handling customer issues, mitigating any order returns, or negotiating reduced prices on larger orders to keep a happy and long term customer.

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