With a registered user database of about 147 million people (as of
March 2005), it will make you wonder what there is in eBay that
makes it very popular among buyers and sellers alike. Well, the
answer is really easy. On the part of the buyers, eBay provides
them with a lot of products that they can never find locally. On
the part of the sellers, eBay provides them with a lot of
opportunities to make money, whether the seller is an established
businessman or a newbie.
Laptop Battery There are really a lot of ways to make money on eBay.
Manufacturers of a certain product can sell their produce on eBay.
And so can retailers sell products on their inventory on the online
auction site. And today, even people who don't have products to
sell are also making
business on eBay. How? Through
drop shipping.
According to the indictment, Jones would steal various IBM and Penguin computer servers from Verisign's warehouse in Virginia and sell them to Johnson. Johnson would then sell the servers to several individuals, who would sometimes place them for sale on eBay. As a result of this scheme, the indictment alleges that Jones and Johnson caused Verisign to lose more than $120, 000 worth of computer equipment. In the indictment, Jones and Johnson are charged in three counts with causing the interstate transportation of stolen property, namely IBM 330 and 335 servers, in violation of 18 U.S.C.
Thinkpad So what is drop shipping and
why is this selling method very
popular among the new eBay sellers?
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Microsoft Drop Shipping
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Laptop Computers Drop shipping, or drop shipment, is a process of selling a
product that is neither the seller's own nor existing on his stock
or product inventory. Instead, the product is owned and kept in
stock by a manufacturer or wholesaler, called the drop shipper.
Once a customer orders a product from the seller, the seller would
forward the customer's order and shipment details to the drop
shipper, who then ships the product directly to the customer.
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Laptop Computer And how do the seller profit from this
scheme?
laptop computers is driving strong sales for notebook computers, according to the latest quarterly sales figures from the research firm IDC, which reported a 37% computer sales for the second quarter, compared with a year earlier. In the U.S., laptop sales grew 17.7%, while sales of desktop computers and servers fell 4%. The New York Times ( 10), CNET ( 10)
Desktop Computer The difference between the retail price, or the price by which
he sold the product to the buyer, and the wholesale price, or the
actual price of the product, becomes his profit.
Notebooks Now, drop shipping has slowly been gaining popularity in eBay,
and that popularity goes with several reasons. Among the more
popular reasons why new sellers would often resort to drop shipping
schemes are:
Lenovo . Reduction in Inventory Cost
Hard Drive Without the need to actually buy the product and keep that
product in stock, the seller saves a lot on inventory cost.
Further, the seller won't have to shoulder the cost of picking and
pulling the product from the wholesaler, packing the product and
shipping it to the customer.
Travelstar . Transparency of the Drop Shipper
Gateway In most cases, drop shippers wouldn't mind if their products are
not labeled with their own brand name, unlike in retailing where
the manufacturers keep the right to name their products. As such,
the seller can claim the products as his own. Many customers won't
even know that the product never actually passed into the seller's
hand.
Laptop Parts Now, all these things may sound very advantageous to the seller.
This is the reason why many eBay newbie would instantly be
attracted to this scheme. A deeper look on drop shipping, however,
would reveal its negative side.
Software The Disadvantages of Drop Shipping
Hard Drives Like every other selling method, drop shipping is not all
positive. Drop shipping also has a lot of disadvantages; so many
that it may just cancel out all the advantages there is to it.
Electronics . Inventory
Canon It may save the seller a lot if he does not maintain the
inventory of the products himself, but it may also cost him a lot
of negative feedbacks and complaints if he was able to sell a
product that is actually out of stock. This is not a rare
occurrence when using the drop shipping scheme, as the seller is
usually uninformed about what products are still in stock and what
products are out of stock.
Desktop Pc . Shipping
Desktop Computers In any drop shipping scheme, the seller has no control over the
shipping of the product from the wholesaler to the customer. But
since the customer would not know that the seller's products are
from a drop shipper, the seller would have to shoulder all the
blames and complaints if ever the drop shipper delays the shipping.
This would be another blow to the eBay business of the seller
because this would only mean another negative feedback.
Think Pad . Product Returns
Repair In retail businesses, the retailer would usually return a
defective product to the wholesaler and it will be replaced with a
new one. Things would be different for drop shipped items as the
product doesn't actually pass your hands. In case of defects, the
buyer would return the product to you and you would have to
shoulder the refund, unless you want a negative feedback.
Data Recovery . Pricing
Cisco This is being cited by many as the biggest disadvantage of drop
shipping. Drop shippers would usually give a particular product a
higher price than its true wholesale price. This prevents the
seller from giving the product a competitive starting price on eBay
auctions.
Keyboard
Selling products in eBay through drop shipping offers a lot of
advantages. A closer look at the scheme, however, reveals that it
also has a lot of disadvantages. "But what selling method does not
have?", you may ask.
Monitor Well, all eBay selling methods have advantages and
disadvantages. But in the case of drop shipping, the disadvantages
appear to outnumber and outclass the advantages.
Desktop Drop shipping may offer you an easy way to start your business
in eBay. In the long run, however, this scheme may bring you more
losses than success. So if you want to make money and be successful
on eBay, avoid the drop shipping scheme.
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