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Drop Ship Business on eBay: Pitfalls and Mistakes to Avoid

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h4> by
Niamh Allan

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How Do You Ace the RatRace on eBay?

The surging popularity of eBay has grasped the interest of entrepreneurs who are looking to make money with an online business. Many of these businesses are boot strapping. Drop-shipping is a logical solutions for those entrepreneurs who wish to set up a shop, but can’t spend big amounts on inventory.

Good product sourcing is vital for any business, and drop-shippers help businesses make profits without investing much effort. Reputable drop-shippers offer good wholesale pricing and ship orders the same day. Yet, risks are inevitable. Research and experiment with drop-shippers before you choose one.

Common Drop-Ship Relationship Pitfalls

Though drop-shipping has some of the best benefits, it does not come without pitfalls. Some of the most common pitfalls in drop-shipping are:

  1. Lack of communication:
    A lack of communication between supplier and retailer can leave the retailer clueless about whether the supplier received the order, whether the items ordered are in stock and when the order shall be shipped. This lack of coordination leads to more problems. The drop-shipper / supplier must be transparent about shipping schedules, which is sometimes not the case. Communication between supplier and retailer needs to be the best.
  2. Transparency about Costs
    You need to carefully understand and analyze the prices of the wholesaler you’ve chosen. In order to set prices in your store, it is essential that you know the price of every single drop-shipped item. Understand all costs involved or a drop-shipper can trick you into paying more. Some companies lure retailers by quoting very low wholesale prices, but later make their money by including unreasonable shipping charges.
  3. Supply out of Stock
    The retailer is held responsible for ensuring that customers receive their products on time. Ask for references and speak to other retailers about how often the drop-shippers items are out of stock. If the supplier is not too communicative, speak up and stay in touch with the retailer.

Common Drop-Ship Buying Mistakes

While drop-shipping has some inevitable risks and pitfalls, there are also some common mistakes committed by drop-shippers. Some of these are:

  1. Buying from Bad Suppliers / Drop-shippers

    Choosing inexperienced and unethical drop-shippers can create unnecessary problems. Retailers bear the brunt of supplier inexperience and dishonesty. The inexperienced suppliers can also commit careless mistakes which would reflect badly on your business. Have a sample order shipped to you first. Inexperienced suppliers leave their own logo on the packaging instead of using yours. Inefficient suppliers have often miscalculate stock requirements and fail to ship products on time. While choosing suppliers, go for ones who are honest, efficient, and experienced.

  2. Buying products at inappropriate prices

    The attractive discount may lure you to buy products at retail prices while drop-shipping, but have you already included the VAT or taxes, business overheads, shipping and packaging costs? You need products with high profit margins to succeed on eBay. If you are not quite sure calculate your exact cost and profit margins, and understand how to compete with other retailers on eBay.

  3. Buying poor quality products

    Businesses often fail when they ship poor quality products. Most retailers are competing for customers on eBay. Good quality, inexpensive, and popular products are what will dent the competition. Carry out a proper product research and a thorough market research to emerge victorious.

Instead of succumbing to the tough competition on eBay, overcome it to ace the rat-race!

Author’s Bio:
Niamh Allan writes about business, especially about logistics services and fulfillment services.

Net Neutrality 10-04-2006

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Net Neutrality Links

I’m adding this link to the Net Neutrality Page.

Internet Freedom and Innovation at Risk: Why Congress Must Restore Strong Net Neutrality Protection

READ THIS ONE IN ITS ENTIRETY

Net Neutrality rests on three guiding principles:

  • No discrimination against lawful content. Net Neutrality ensures that Internet users have the right to access lawful websites of their choice and to post lawful content, free of discrimination or degradation by network providers. . . . .
  • Equal Internet access at an equal price. Under Net Neutrality, network providers cannot give preferential treatment to their own services at the expense of competing sites consumers want to use. . . . .

    • .

  • Consumers choose network equipment. . . . Net Neutrality prevents network providers from eliminating competing equipment by making it incompatible with their gateway. In the process, it ensures that equipment choice remains in the hands of Internet users, where it rightfully belongs

[ . . .]

In 2005, the Telecoms Captured the FCC and Eliminated Net Neutrality Protection Following the Supreme Court’s Brand X Decision.

[ . . .]

In 2006, big network providers have censored lawful content and blocked their Internet competitors:

  1. Time Warner’s AOL blocked all emails that mentioned www.dearaol.com, an advocacy campaign opposing AOL’s pay-to-send e-mail scheme.
  2. BellSouth blocked its customers’ access to Myspace.com in Tennessee and Florida.
  3. Cingular Wireless, run by AT&T, bars access to PayPal to make a payment on Ebay because it has struck a deal with another online payment service, which pays Cingular for that privileged status.

[ . . .]
The United States Senate is currently considering a bipartisan bill offered by Senators Olympia Snowe and Byron Dorgan, S. 2917, the Internet Freedom Preservation Act [Hyperlink to Snowe-Dorgan bill], that would restore Network Neutrality protections in place before July 2005. The Snowe-Dorgan bill requires that any content, application, or service offered through the Internet be provided on a basis that is “reasonable and non-discriminatory” and equivalent to the access, speed, quality of service, and bandwidth of services offered by network owners. It further prohibits network providers from blocking or degrading lawful Internet content. Finally, it leaves the choice for attaching legal devices to networks squarely in the hands of consumers, and not the Telecoms and cable companies.

A Telecom-sponsored alternative bill offered by Senator Ted Stevens, S. 2686, the Communications, Consumer’s Choice, and Broadband Deployment Act of 2006 [hyperlink to Net Neutrality provision of Stevens bill], permits Net discrimination to continue unabated. The bill provides no protection for Internet users and entrepreneurs. Instead, it merely includes a toothless requirement that the FCC study the Internet market for five years and file annual reports to Congress on the activities of network owners. Telecoms and cable companies are spending tens of millions of dollars in ads and big-dollar contributions pushing the Stevens bill to members of Congress. They view it as a small price to pay for the billions in profits they will reap as gatekeepers for the Internet’s content and users.
[ . . .]

READ THIS ONE IN ITS ENTIRETY

–ME “Liz” Strauss

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NET NEUTRALITY PAGE

Net Neutrality 8-13-2006

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Net Neutrality Links

I’m adding this link to the Net Neutrality Page.

It’s Our Net — A New Site Announced by Six Apart

. . . . Scientific American published a pretty fair editorial on the topic, which reaches a clear conclusion:

A system for prioritizing data traffic might well be necessary someday, yet one might hope that it would be based on the needs of the transmissions rather than the deal making and caprices of the cable owners. Moreover, personal blogs and other Web pages are increasingly patchworks of media components from various sources. Tiered service would stultify that trend.

That seems like a reasonable analysis, so the natural next step for any Internet-related cause is to get a good website going to help with advocacy. Enter It’s Our Net, supported by everyone from Adobe to Yahoo, and sponsored by Amazon, eBay, Google, InterActiveCorp, Microsoft, and Yahoo! . It’s a simple, effective site combining the latest news, information about how the proposed change would affect the web, and tools to contact your elected officials. . . .

–ME “Liz” Strauss

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NET NEUTRALITY PAGE

Net Neutrality 6-23-2006

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Net Neutrality Links

I’ve added these links to the Net Neutrality Page today.

Net Neutrality: This is serious by Timbl

. . . There have been suggestions that we don’t need legislation because we haven’t had it. These are nonsense, because in fact we have had net neutrality in the past — it is only recently that real explicit threats have occurred.

Control of information is hugely powerful. In the US, the threat is that companies control what I can access for commercial reasons. (In China, control is by the government for political reasons.) There is a very strong short-term incentive for a company to grab control of TV distribution over the Internet even though it is against the long-term interests of the industry.

Yes, regulation to keep the Internet open is regulation. And mostly, the Internet thrives on lack of regulation. But some basic values have to be preserved. For example, the market system depends on the rule that you can’t photocopy money. Democracy depends on freedom of speech. Freedom of connection, with any application, to any party, is the fundamental social basis of the Internet, and, now, the society based on it. . . .

Call the Telecoms’ Bluff on Net Neutrality.

The Government should, henceforth, treat the internet more like the Interstate Highway System than the telephone network.

This would mean that the Gvt, or a federal regulatory agency, should take control of and/or subsidize the building and maintaining of the network from now on. Take the financial burden of it away from the telecoms.

Make it a matter of national security, if you have to, to get that network built up, and to provide unfettered access to it by the public.

This, is a proposal that the telecoms should jump on in a heartbeat for two reasons:

1. The immediate financial windfalls it gives them.

2. It actually has the effect of slowing down the development of alternative high speed internet competition form other sources.

If, as I expect, the telecoms get their wish on Net Neutrality, you will see the rapid expansion of satellite, or other broadband internet technologies takeoff. And the sheer competition from those other sources will force the telecoms to scrap their differentiated charges to various tiers of content providers.

But, in the meantime, I think we should start floating my alternative proposal to take the wind out of the telecoms’ sails. This proposal will show us whether the telecoms are really concerned about building the network, or in just finding a way to make more money.

Larry Lessing on: Tim Berners-Lee on Net Neutrality: “This is serious”

One clue to this Net Neutrality debate is to watch what kind of souls are on each side of the debate. The pro-NN contingent is filled with the people who actually built the Net — from Vint Cerf to Google to eBay — and those who profit from the competition enabled by the Net — e.g., Microsoft. The anti-NN contingent is filled with the entities that either never got the Net, or fought like hell to control it — telecom, and cable companies.

–ME “Liz” Strauss

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NET NEUTRALITY PAGE

Net Neutrality 6-12-2006

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Net Neutrality Links

I’ve added these links to the Net Neutrality Page today.

Why has Web 2.0 Been (Relatively) Quiet on Net Neutrality??

The point is that I searched through Technorati, and could not find the usual Web 2.0 suspects writing, but just pointing people to fun videos that are cutesy; they are not really taking the banner of Net Neutrality.

I have discussed this with a couple of other bloggers – and wonder if Web 2.0 has not rushed to this because they are so caught up with themselves. Do they think that the banners of open source, community Web, and whatever the buzz words du jour are going to save their companies? If you look at the Web 2.0 sites -Facebook, Riya, YouTube, Second Life, Songbird, BitTorrent and others – they are total bandwidth hogs. Look at how much Second Life is growing, to the point that it is holding virtual conferences, virtual concerts. But at least is it suited to find ways around the potential costs of the loss of Net Neutrality, as it already charges for membership.

And, well, since Friday it is even a bigger issue since the House rejected Net Neutrality.

Now, while the big Net companies – MSFT, Google, Yahoo – have been to the hill to fight for Net Neutrality, the other side of the debate has just been as active. But is smarter and better at lobbying. Just imagine if the Web 2.0 companies rallied their users to send a letter or email to their Senators and Congressman. Would not those voices be heard, or am I a little too Mr. Smith Goes To Washington?

Net Neutrality: Who voted for What?

The largest telephone and cable companies such as AT&T, Verizon, Comcast, and Time Warner want to be able to decide which websites run fast, slow or not at all. They want to be able to charge extra money for fast service and if web sites don’t pay extra then they’ll be doomed to a slow connection.

Net Neutrality wants to ensure that all sites get equal treatment.
The supporters of Net Neutrality include leading high-tech companies such as Amazon.com, Earthlink, EBay, Google, Intel, Microsoft, Skype, Vonage and Yahoo. Prominent national figures such as Internet pioneer Vint Cerf, Stanford law professor Lawrence Lessig and FCC Commissioner Michael Copps have called for stronger Net Neutrality protections.

For More Information check out the Net Neutrality FAQ
Yesterday the House of Representatives voted NO for Net Neutrality. The list below shows the people who voted. I have arranged them by state so you can easily see how your representative voted. If you are FOR Net Neutrality and your representative voted NO then don’t vote for him/her in the next elections.
[THE COMPLETE VOTING LIST FOLLOWS]

The Marching Morons Strike Again [Read more…]

Net Neutrality 6-10-2006

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Net Neutrality Links

I’ve added these links to the Net Neutrality Page today.

Hands off whose Internet?

I find it fascinating that whenever corporations are forced to act in an egalitarian manner they resort to the ‘stifling innovation’ argument. Yet it is patently absurd to assume that governmental enforcement of net neutrality or lack thereof will have any marked effect on this hypothetical ‘next generation’ internet. It will come when it comes, no sooner and no later, and it will be the telecom companies who pay for it or somebody else will swoop in and do it for them. Why? Because there is money to be made and an entire global economy with which to keep pace, that’s why.

Assume if you will that net neutrality fails and the big telecoms are allowed to run amok with their plans to create a tiered internet system. With all that extra money, is it more likely that they will reinvest in the infrastructure and create a better product? Or will they do the same thing they do with their Bush tax cuts and buy an extra Porsche or twelve? Besides, do you really want your next-gen internet molded in the vision of telecom corporations or would you rather have one created democratically, even if it takes a few months (at the most) longer?

To take the other side, if net neutrality passes and the big telecoms are forced to keep the internet traffic moving as it already is – in other words, do nothing different than they have been doing from the beginning – do you really think they won’t lay the infrastructure for next-gen internet? Of course they will! They are just as much in competition with each other for your patronage and when the technology comes of age they will all battle to be the first to offer enhanced service. And if they act like spoiled brats and follow through with their threats then other companies and investors will seize the opportunity and render the existing telecoms obsolete. I mean, how many wagon wheel companies refused to get into the auto trading business. Adios Antiguos!

Defeat for net neutrality backers

US politicians have rejected attempts to enshrine the principle of net neutrality in legislation.
Some fear the decision will mean net providers start deciding on behalf of customers which websites and services they can visit and use.

The vote is a defeat for Google, eBay and Amazon which wanted the net neutrality principle protected by law.

Setback for Internet coalition
House OKs bill to make subscription TV market more competitive

The measure spells out new rules that would create national franchises, allowing telephone companies to get into the cable television business without first having to obtain licenses from municipal authorities, as is currently the case.

In the floor debate Thursday, several Democrats spoke out in favor of the bill’s trade-off — a free hand to telephone companies when it comes to pricing new Internet services in return for their entry into the cable market.

“This bill does a lot and goes a long way to making sure that the cost of cable television will be reduced,” said Rep. Bobby Rush, D-Ill.

Reps. Anna Eshoo of Palo Alto and Zoe Lofgren of San Jose expressed bewilderment that the House would vote, as Lofgren said, to “turn the Internet into the equivalent of cable TV.”

Now the Internet coalition, which includes such Silicon Valley giants as Google, eBay and Yahoo, must focus on the Senate, where it faces an uphill battle. The House added language that acknowledges the importance of network neutrality but stopped short of giving the FCC the regulatory powers that Markey had sought.

The current Senate bill has less language on network neutrality.

–ME “Liz” Strauss

Related
NET NEUTRALITY PAGE