Is drop shipping a scam?
There are a few big name hosting companies promoting their websites to people interested in starting an online business. The main thrust of their advertising being, how to start a drop ship business using their web sites.
Sale Hoo is one company flying under the radar lets take a look.
This SaleHoo dropshipping review looks at a company which originally was started as a vendor directory sometime back in 2005.
A couple of New Zealand guys starting an E-Commerce business were having trouble locating reliable suppliers, and were surprised at the ease unscrupulous vendors could trap new entrepreneurs with fake branded products. Sometimes non existent products.
Unlike Shopify, Magento, big E-Commerce, et el. Salehoo origins began with a need, not to just provide a platform for entrepreneurs, but to thoroughly vet suppliers.
It has since grown from being a vendor directory site, vetting suppliers. before they are categorized into the Sale Hoo wholesalers list, to the current fully functioning platform. It now includes education, researching (which are low and high competition items).
It compares price points of items being sold on E-Bay and Amazon and giving information on where these items can be sourced as well as offering websites to build your e-commerce business.
The big E-Commerce stores have lots of apps. One of the problems I have found when using their listing apps, is if you research the product the app download for you, you will often find the same product, at a different “wholesaler” at a different price!.
Let me explain.. This is a verified supplier on a popular E-Commerce site. So if you import this product (which is quite popular), You are doing your self a disservice.
In the below picture you have all the elements of a reputable supplier. The certificate,verifying the quality. Note the price difference. We will look at the shipping in a moment. The number sold. This should be taken with a grain of salt, as this often includes bulk orders. The rating is the number to look at. 477 individuals have left a 4.9 rating.
A quick look at the shipping cost and you will see how much worse off you would be if you were listing from the first “Wholesaler”.Super Saving Shipping has no tracking number. In import / export this is a risk you should not be taking.
Standard Shipping for the first “Wholesaler” is $2.47. Add this to $8.63. and your price base to work from is $11.10.
And note, the shipping is only an estimate.
From the 2nd wholesaler it is an extra $0.90 to send via e-packet. E-packet is the way to send things from Asia. Delivery is fast, usually 10-14 day’s, after processing and you are able to track the item.
Your base price point is $3.21 less than the 1st “wholesaler”.
I am not saying there is anything unethical happening here. Maybe the second wholesaler over ordered and needs to reduce his stock anyway he can. Or the second “wholesaler ” is actually the manufacturer and you are buying from the source and not a re-seller. ( I know this to be the case actually, because I have dealt with them.
By the way the bulk price from wholesaler 2 is $6.55.
SaleHoo research Labs compared to the many Apps made available by the Bigger E-Commerce platforms gives you comparable information instead of listing blindly.
You make the decision from which supplier you buy from. You need complete control over this. There is no point having an App download something to your store and the same item is all over E-Bay, Amazon, Etsy et el at a vastly different price point than the App is giving it to you.
Some of the time you will have no idea where these downloaded items originate from, and often no way of finding out.
Making Money Drop Shipping
Drop shipping offers a good opportunity to make a good side income, as well as the potential to create a life changing career of abundance. And it can happen very quickly, if you make good decisions on product choices, suppliers and prices.
Get those three lined up and you should do well.
If you are entrepreneurial and are wanting to embark on a new venture you could do a lot worse than starting your education with SaleHoo.
What you are getting with big-eCommerce is a lot of mixed messages, from lots of different “experts” .usually all they are offering you is more tools (at more cost to you).
Example:- Site appraisals starting at $35 an hour, apps on a monthly plan ( adding to your operational costs), Experts to market for you, other whizz bang software to “increase” your sales, etc, etc.
When starting out you don’t need these “tools” . You need to keep costs down until sales are coming in and then, If you wanted to hire some one to fulfill your orders for you, look Here or Here among others.
SaleHoo offers a complete guide to teach you how to run a successful E-Commerce business whether it be on E-Bay, Amazon or your own online store.
The only way anyone makes money with E-Commerce is when a dollar changes hands, same as the offline world. In a previous post I outlined some of the pitfalls of drop shipping. below is a more specific criteria model to work with.
Is it Safe to Import Products From China?.
Importing from China is not safe to do, unless you have access to Data on the supplier. generally if you import directly from Ali Express you should be reasonably confident, because Ali Express has its own Vetting procedures and ratings, and publishes the time the business has been in existence on Ali Express.
If you are using Ali-express the supplier should have a minimum rating of 94 %. Higher is better obviously, but make 94% the cut off point.
Satisfaction approval, the product should have sales of at least 100 individual items, with a rating score minimum of 4.6.
Understand that suppliers on Ali Express are more like selling agents rather than wholesalers. Many are also retailing. There are not many manufacturers on Ali-express, unlike Alibaba.
Ali Express is not the only Chinese site to import from, some below and a Google search will turn up plenty more.
Unless you have verifiable proof that the supplier of any branded product is licensed to sell those products then stay well away from them. lawsuits can be expensive. (understment).
Some more tips for how to import safely without SaleHoo
- Only deal with suppliers that have been selling products for 2+ years. Look into their history.
- Check for reviews from suppliers online. Do not use a supplier that doesn’t have reviews.
- Ask for samples first, and buy small lots first.
- If they have a website, check the WHOIS details, and see if the website has been online for 2+ years.
Use tools like Google Places to verify their physical location exist.
SaleHoo pricing compares well with any E-Commerce platform. you can get started from as little as $29 a month and there is a yearly fee of $67.00 for the research tool.
Other fees such as registering a domain need to be paid, but these are generally fairly inexpensive, and they are a business asset. Get them Here
Add in a good email service, and for less than $200.00 you can set yourself up to earn from a good side hustle, or kick start a new business successfully.
SaleHoo is by no means a Bare Bones platform, it just lacks all the experts and whiz bang “extras” which really, do little more than increase your overheads.
More Drop Shipping Tactics coming soon.
- copyright ©thebarefootaffiliate.com 2019