Drop Shipping Deadend

Drop shipping is a great idea on paper. It fails miserably in practice. One of my stores is 100% drop shipping and here are my reflections on how things have progressed over the years...

1. If you can open a drop shipping ecommerce business so can 10 million other people. And they will. Many of them won't care about markup either. The barrier of entry in this model is just too damn low. You'll soon find your competing a what are essentially not-for-profit businesses.

2. The company you drop ship with doesn't give a hoot about you. Why should they? They have the 10 million other people selling their stuff (see number 1).

3. The company you drop ship with may just get greedy and enter into the retail market and compete with you. In reality, it won't be much of a completion. In a down economy, eating someone else slice of the pie may just keep you afloat. Remember number 2.

4. The company you drop ship with may decide to hike up their shipping rates whenever the cost of gas goes up my a 1/10 of cent. Note that this rates will never be adjusted in a downward manner when the cost of gas goes back down. The company doesn't view you a customer, more of a profit center being held hostage. This is why you can expect to pay full UPS/FedEx prices when in fact the company receives deep volume discounts.

5. The company won't bother to tell you when items are discontinued or out of stock. The only why to find out if the item is available will be to try to buy it.

6. Your drop shipping business will only be as good as your suppliers. Basically, you're in a potato sack rack with a complete stranger sharing the same sack. Their slacker employees become your headache.