Forums: Discussions for entrepreneurs and small business.

The thing that worries me, as the person who would be using a dropshipper, is the dropshipper "stealing" the names and addresses of the clients and selling directly to them! Has this ever happened to anybody?

It can happen, but does not very often.  They want future business too.  It pays to get references and more than just one.  The same thing could be said for any service where you give them your customer data, for example Internet based CRM, shopping carts or other sales applications.  This is an asset. 

In today`s world this is a question that should always be addressed and/or considered in my option too...

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

Hi Grill Charmer

 

Here are a few thoughts on shipping fees.  A company I used to work for used flat fee zone shipping.  The country was divided up into shipping zones and the shipping rate calculated for each zone.  The rates were based on say UPS rates for that area.  It’s actually not that hard to calculate since UPS rates do not vary greatly for each of their zones.  You just have to charge enough to cover all areas within a given zone.  The company then added $5.00 per order to handle packaging.

 

Here is an example for a UPS ground delivery.

 

Everything less than 10 pounds and shipping within say 300 miles would be charged lets say $5.00 shipping plus $5.00 packaging.  The next zone would be 300 to 700 miles with a fee of say $7.00 and so forth.  Each zone would have a flat fee assigned to it.    

 

You might also consider the new US Postal Service one rate box.  No matter what you put in the box, or where it’s going, the mailing cost is $8.10.  This might be your best option

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The older we get, the more excuses we make for not chasing after our dreams. But truth is, goals are attainable at any age.

All good points but just for clarity the USPS Flat Rate Box went up to $8.95 yesterday.  (http://www.usps.com/prices/) 

It has been my experience that everyone`s shipping needs can vary, but most times flat shipping fees are the best for many reasons well beyond shipping costs.  (http://www.startupnation.com/forums/5306/1/1)  So I think you make a good point.  I am not sure from looking at Gill Charmer`s web site if the USPS Flat Rate Box is the right solution for that product.  But, I will bet that some USPS service or a multi-carrier mix will turn out to be the best choice, but it is hard to tell from what I know about the product and volumes being sent out.  That is, if they decide not to drop ship...

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

I am an online retailer www.bassgifts.com and stock most of the items that we sell, however in some instances such as furniture and custom designs we use drop-ship. The vendors that we use ALL charge a drop-ship fee in addition to shipping.  It is less expensive for us as we do not pay shipping twice. We prepay for the merchandise and the vendor uses our UPS account for shipping.

When we first started our website, it was good for us to have merchants who would drop ship as we did not have to tie up our money with a large inventory. We made less profit, but stayed out of the red and were able to offer more itmes.

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Fishing for a dream-
"The lady bass angler"

We drop ship for them as it`s the same as shipping our direct orders aside from the account numbers; fulfillment costs are the same and we have it built into our prices ... the bottom-line is getting our product into lots of busy hands (and lips).

What a wholesaler, distributor, retailer, etailer, etc., etc., pays is a factor of inventory load and market channel for us; the fulfillment costs are their`s or ours and we all know what we need to be happy with our own margins; granted we have a product not subject to competitive pressure, but we’re aggressive in our pricing and services as we want to sell more tacos and not hold a hard margin.

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Chris Miller, a simple taco maker:
The Tiger Taco home in the U.S.A.
Tiger Tacos in Australia
Tiger Tacos in the United Kingdom

Hi Grill Charmer,

Bert`s reply reminded me of the pre-dotcom bubble.  People were selling services at a loss but were hoping to make it up on volume. 

Every business activity must be focused on the bottom-line.  If drop-shipping is a tool to get known, then at the very least take in a tiny profit and make certain it`s not overwhelmingly time-consuming. 

After a pre-determined time-period, analyze the "getting known" factor vs. the profit and if the latter is not great enough focus on better money-making activities.

Salepro, you are right.  I totally agree, one should not do something unless they are making a profit.  There are very few reasons this is not the case.  That is a lesson most startups learn the hard way as they think they will either make it up in volume or with future business.  I don`t know how many times I have to remind someone to "do the math before you act", even with shipping.  As for this thread, I would look for where the highest profits would be made whether it was using a drop shipper or doing my own shipping.  If the two ways are close, I would choose the way I have the most control over the costs.

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

This is why I love this place... SO much knowledge and advice from every angle.  Thank you all so much for the input.  I am such a more informed person today then I was at the beginning of this thread.  I`m still dealing with manufacturing issues, so when the time comes to sell (hopefully by the end of summer) I`ll let you all know what I`ve decided to do and how it`s working for me

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Leslie
Founder and President
Charmed Life Products LLC
Grill Charms™… The MUST HAVE grilling accessory that is revolutionizing the American Cook-out AND The perfect gift for any occasion!
Grill Charms
                                                                                                    

Hi Grill Charmer

There`s been lots of good advice here.  I would urge you to charge what you`re satisfied with at the get-go.  Those you drop-ship for will object if you decide to up the price after a few months because you don`t feel you`re making enough.  I drop ship for Proven Winners & Intimate Gardener & agree with Jillybeans -- you want to sell higher than wholesale but lower than retail.  It`s a good deal for them because they don`t have to carry inventory & a good deal for you because you`re getting the Grill Charm name out there with no advertising dollars spent by you. 

I ship promptly & always keep in mind that what I do reflects on Proven Winners & Intimate Gardener because the order was placed with them.  I do, however, put my contact info into each box I ship.  I want the customer to be able to visit my website to learn more about my product.

Stick with reputable companies so that you get paid!                                                                        

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