1. Money

Should I Join That Drop-Shipping Website?

None of the several kinds of drop-shipping companies can bring instant wealth

By

Should I Join That Drop-Shipping Website?

Drop-shipping promises to automate all of the laborious parts of an eBay business for you

Photo: Alexander Ivanov / Fotolia

Millions of brand-name items available at pennies on the dollar, with no overhead and no risk! All you do is post listings on eBay, then hand the orders off to someone else for fulfillment, and rake in the cash with virtually no work! Testimonials that say you can achieve financial independence in less than a week! All of this just by paying a small fee to a drop-shipping company!

What's not to like? It's a good thing nobody else knows about this yet, or everybody would be doing it! You should hurry, pay the fee, and get a membership, right?

Understand Your Drop-Shipping Options

The answer to the question above is a definite "Maybe." The fact is that many thousands of eBay sellers do know about these companies and are using the same handful of heavily advertised and heavily "reviewed" drop-shippers to try to become successful sellers.

There are three major types of "wholesale drop-ship" businesses out there right now, and there are real differences between them.

  1. "Drop-shipping companies" that are actually middlemen. These companies claim to offer wholesale prices to you in exchange for a membership fee, after which you can start listing products right away, straight from their website, without any additional legwork. As a service, they have basically saved you the trouble of finding wholesalers, building relationships with them, or even placing orders with them, instead gathering products from many actual wholesalers and distributors into a single, more or less automated catalog and drop-shipping system.
     
  2. Drop-shipping catalogs that list willing wholesalers. These companies offer millions of items available through wholesalers around the world, once you've used their tools to search through the products and companies and identify those that have been identified as likely pending successes. Once you make your picks, you express interest, forge a relationship, list items, and let the willing wholesalers you've found do the rest.
     
  3. Manufacturers and distributors that sell wholesale and are willing to drop-ship. These companies don't make many claims at all, since they're mostly invisible online. When you do find them, doing business with them is not about filling out a web form. They may be willing to drop-ship, but they'll often want volume buys instead and refuse to work with you unless you supply a business registration to them, and they'll usually only have a few to a few dozen products on offer—certainly nothing like the millions offered by the first two types of companies in this list.

So which of these kinds of companies do the most successful eBay resellers usually do business with? If you guessed the third kind, you're absolutely right. At the same time, the first two kinds of companies have launched more than a few eBay sellers that have gone on to do well. Here's what you should know about each type of company.

©2014 About.com. All rights reserved.