The Drop Shipping Myth Explained
Drop shipping on eBay is promoted as a way to make money without doing any work or risking money buying products. You buy a list or join a membership site and the money supposedly rolls in automatically.
Sadly most people who try drop shipping on eBay fail. While most people fail, I do know few people who have successfully ran an eBay business for an extended amount of time selling drop shipped items. I'll explain what they are doing in a minute.
Why Most People Fail At Drop Shipping
First, there is no emotional attachment. I buy trains and toys because I like them. The fact that I can make a living doing it is just a bonus.
But that can't be the whole reason. After all there are lots of people working in jobs they hate just for the money. One clue here is they actually consistently make money. They might hate their jobs, but they do get paid for their efforts.
We have all seen the drop shipping promises. "Buy this 'secret' list and you'll make millions on eBay next week."
OK, I exaggerate a bit, but that's the gist of the drop shipping promise. The flip side is another reason for the high failure rate.
On this website, I write a lot about the importance of skills. The lack of skills has to be part of the reason for the high failure rate. Just taking some images from a website or catalog and posting them on eBay with a price high enough to make some money isn't a skill.
Writing compelling auction descriptions is a skill, but writing a longer description in an attempt to get sales in a competitive market where buyers shop based on price is not a good use of skills because few people will look at your higher priced listing.
Because there is little investment in time and energy other than selecting a product and posting a listing on eBay, it is easy to give up and move on to the next over-hyped promise.
Maybe some of the people who gave up could have been successful if they had continued? We will never know.
As an aside, an even bigger waste of time and energy is defending a poor decision. On the flip side, many people get caught up in complaining about being scammed by the list seller, and also waste their time and energy.
Another big problem with drop shipping lists is there are no barriers to getting started. This means anyone who buys the list or joins the membership site gets access to the same products.
This easy access means the products are sold based on price rather than on other value added properties. It's why the products from drop shipping lists are quickly reduced in price to the point where there is no profits left for the sellers.
Two Examples Of Successful Drop Shippers In Action
I mentioned earlier that I have some students who are successful with drop shipping. Some of these students have exclusive arrangements with manufacturers.
For example, one of my students lists items made by a small local manufacturer on eBay. When one sells, he has the manufacturer charge his credit card and ship the item directly to the buyer.
He doesn't sell enough of them for the manufacturer to start selling them directly on eBay, so his arrangement is safe. Here's an article about finding people with products you can sell on eBay.
A second example of successful drop shipping is seen on eBay frequently, but few people recognize it for what it is.
If you search in many categories you'll see coffee cups, mouse pads, t-shirts, and other items designed specifically to sell within those categories. These items were designed by the seller, and are made by sites like Cafepress.com.
These items aren't that profitable, and the sales volumes are low. I just "designed" a t-shirt on CafePress and abandoned the idea when the price came back as $28 per shirt.
Sites like Cafepress might be a good way to test products before having them made at a screen printer or advertising specialties company, but as a business, you won't make a lot of money.
Drop Shipping Versus Selling Antiques On eBay
One last reason for the high failure rate, and this is a big one, is there is no quick achievement plateau.
This means there is no sense of satisfaction.
Think about a woman who goes out to a few yard sales and buys items to list on eBay. She buys items hoping they will sell for more on eBay.
If the first time she went out searching, she bought something that gave her a big return, she will surely go out again.
If on the first trip out she found something she kept because she liked it, she is even more likely to continue hunting.
Here is an example. Years ago, I bought some trains from a guy. In his garage I found a pressed steel riding horse. I talked the seller into throwing the horse in with the trains.
I bought the trains for resale, but I bought the horse for me. The horse is now sitting in my living room next to some old milk cans and potted plants. (When I post this on the website, I'll add a photo here.)
The horse is a constant reminder of my success. The teddy bear on the website is another constant reminder. My home is filled with these reminders.
These finds have EMOTIONAL POWER.
Selling new items from a catalog has no emotional power. It is just a job. I am sure there are people who get charged up by selling a few dozen packages of socks or batteries, but not the way we collectors get charged up.
As collectors we are the lucky ones. We can add items to our collections and make money at the same time.
Here's a page that lists 27 ways to find and buy antiques.
PS If you are a collector check out my Collector Strategies Package. In the package, you'll learn 83 ways to find and buy antiques and collectibles. You'll also learn about negotiating and other helpful skills that you will need to improve your profits.
Many of the articles and free reports here on IWantCollectibles were originally sent to readers of my Antiques and eBay Newsletter. Not all articles make it onto the website, and readers also get notices of free reports and special offers.