The Biggest Mistake Made by Dropshippers

by Daniel Westfield - Date: 2007-01-21 - Word Count: 676 Share This!

Dropshipping can be a very profitable home business for stay at home parents, retirees, students, and anybody motivated enough to create a profitable internet business. However, many dropshippers make the same common mistake that can kill the motivation of a new dropshipper and put a hole in the profits of the experienced.

This mistake involves attempting to locate and sell the latest name brand, hot fad in hopes of capitalizing on the high demand. Most dropshippers have good intentions with this strategy with this idea, as their thought process is usually along the lines of, "If I can just find THAT item at a wholesale price, then I could really dropship a lot of them and reap a huge profit."

Good luck finding that product at a wholesale price.

When an item is the latest big thing, it is extremely rare to find it listed with a wholesale supplier. When the item is listed, it is rarely low enough to reap a large profit. Why is this? When a product is in high demand, the price goes up for everybody - even the dropshipper. Your supplier is going to demand the same high price that the product is demanding in the marketplace. While you may get a small break as the result of being a dropshipper, it is usually not enough to bring a substantial return. When a dropshipper says, "If I can find THAT…" he or she is committing too much to one product and is missing profitable opportunities in the same industry. Let's take an example…

The iPod is perhaps the most sought after wholesale item, because new dropshippers expect them to sell for high prices very quickly. However, the cost to dropship this item is very high, and the return is usually very low. On the other hand, there are several MP3 players that are very similar to the iPod that are excellent for dropshipping. When imported or purchased from directories, these products can be purchased for less than $50. On electronics websites, and occasionally on eBay, these same items sell for almost double the price as a result of being compared to the iPod (which sells for three times the price). Therefore, instead of spending countless hours searching for a wholesale price for that hot item, look at the knockoffs and compare them to the real thing.

An even better way to turn hot items into dropship profits is to sell accessories to them. Instead of focusing on selling iPods, sell iPod accessories such as chords and covers instead. This is the quickest and best way to get started as a dropshipper and make money very quickly.

There is one exception to this rule. When hot items, especially electronics, first hit the market, there are many people who will pay more than retail on eBay simply because there is low supply in the marketplace. Look at the insanely high prices that video gaming systems and cell phones bring on eBay when they are first released. If your suppliers get inventory of these items when they first come out, you can then take advantage of the high demand. The key is to get in early, and if you can supply an item that is very scarce, you can occasionally hit a home run.

To recap, do not get caught in the trap of finding this week's hot item at a wholesale price; instead, use the high demand that they bring to your advantage by dropshipping similar, comparable items and their accessories. By doing this, you will can easily sell in demand products for a good profit. If, however, your suppliers are able to get you hot items when they are first released, you can set yourself up to make a large profit. However, the steady incomes that the common dropshipper searches for is in thinking outside the box. Therefore, instead of committing to one product and looking everywhere to find a deal, find the deals first, and use them to make your dropship profits.

For more tips to increasing your dropship profits, and to find reviews of dropship wholesale directories, visit

Related Tags: ebay selling, dropship, dropshipper, dropship wholesale, ebay tips, dropship directories, ebay money

Daniel Westfield is an internet entrepreneur who has used eBay to quit his job and work full time from home. He teaches others his eBay strategies via his website, How to Make Money Selling on eBay.

Your Article Search Directory : Find in Articles

© The article above is copyrighted by it's author. You're allowed to distribute this work according to the Creative Commons Attribution-NoDerivs license.

Recent articles in this category:

Most viewed articles in this category: