AuctionCut

Sorry for posting two questions in such a short period of time, but I'm really curious: exactly what is dropshipping? Wholeselling I know about, of course, so is dropshipping similar? Also, if I'm looking to make some serious money on eBay, will I need to use a wholeseller? Right now I'm selling stuff from around the house, and the largest extent of stuff I'm doing to find objects is simply going to flea markets every Sunday. So, I recapitulate: will I need to come in contact with a wholeseller to make some serious money?

Dropshipping works but it needs some detail research to look at where the dropshippers price sits compared to what is already in the marketplace. Wholesalers prices tend to be lower than dropshippers..

It depends on what you plan to sell - dropshipping is ideal for larger items if you are not in a position to hold stock at your home, and also takes out the hassle of getting it dispatched, but this obviously comes at a price that will eat into your margin.

Wholesalers are pretty easy to come by, and offer all sorts of product lines that you can sell on, although do your research first to see what your competition is like, and what they charge for similar products. If the margins are tight, look to increase sales volume with a better listing or offer of service/guarantees etc.

Serious money is made in one of two ways - finding a niche product where you have no real competition and can therefore dictate a price, or sell a product in enough volume that the profit contributions on each sale build up to an acceptable level.

Dropshipping explained in my own words....

Dropshipping is buying items at wholesale prices, and sometimes paying a small fee on each item to have them DIRECTLY shipped to your customers. Not only do they send to your customer, they put your Name and address like if it actually came from you.

What can you do with dropshippers?
Say you find a product. Then you source a dropshipper. Go on eBay, list the item, make sure you hit your profit margin.... Then hopefully get a sale. From their, you get all the customer information, then goto your supplier, either via Fax, Phone, or website, and place the dropship order. Pay the dropshipper their amount, and keep the difference.

Dropshippers are either distributors for a manufacturer, or a warehouse that buys bulk from manufacturers distributor....wow that sounds a bit confusing eh?
Manufacturer->Distributor/Dropshipper->YOU->eBay customer

So, your basically a middle man trying to grab a sale, and making a cut.
You always want to cut out as many middle men from the line to make more profit per sale. Their are lots of websites out their 'pretending' to be true dropshippers, and charge a monthly membership fee because their stuff is so great. Real dropshippers dont have fee's for membership. Maybe a small handeling fee like 2.50 for the dropshipping.

Real dropshippers need your TAX ID and Business License as well. So if they dont ask for them, their more then likely a middle man....let me do a little diagram again...
Manufacturer->Dropshipper/Distributor->Phony Website->YOU->ebay customer

Their taking your profits....dont fall for it.....get all the licenses you need to talk and deal with the real wholesalers, and dropshippers.....

Wholesale

So wholesale, pretty much is products at major discounted prices for retail sale. Say, a mp3 player....originally 59.99 at the store. Okay, well you get it for 25.99 from the wholesaler, and since competition is hard online, you would try and hit 49.99......

Now this sounds great right? Well kind of.

Their are some rules and guidelines when dealing with true wholesalers.
Again, they need TAX ID and BUSINESS LICENSE...
Wholesalers really don't like selling 1 product at a time. You more then likely have to buy bulk.
Say 500.....25.99 quickly turns into 12,995.00.....Do you have the money?
Wow you do?
Can you sell all 500 of those MP3's and pass your investment and actually gain profit?

Just an example, but it is a risk. So if your really interested in wholesale, learn as much as possible about your product or youll be stuck with a big bill and a crap load of items you cant sell for profit.