Hi, it's Neil Waterhouse
Received a question from Conrad Hamilton asking
Why would somebody buy an item from a dropship seller on eBay for more money
when they could just go and purchase the same item from a retailer at Kmart,
who is the suppler of the dropship seller?
That is a great question Conrad, and it comes up a lot.
For anyone who is watching this video who is new to dropshipping
what Conrad is asking is
Why would somebody purchase , say...
a kid's pushbike on eBay for $150
when they can just go to Kmart
and purchase the identical bike for say, $100?
Why would I spend their 150 bucks for the identical item on eBay?
This was also one of my first questions when I first started getting as dropshipping
There's a very good reason and I'll share that with you now
The concept of dropshipping is of course quite simple
You list items in sites like that you supplier has in stock
but you don't have the item in stock.
This, in the industry, is called a "virtual warehouse",
where you list items that you don't have in stock,
you're just using another third-party warehouse like Kmart, for example.
Then, every time an item sells,
you get first and you then have to supply,
Kmart ships the items direct to the customer.
Bottomline is you get paid first and then order the product direct from your supplier.
Just for again to answering the question
I want to share a lesson that I learned years ago
with our Australian eBay import business
which was one of those lightbulb moments
and explains exactly why some people pay more for exactly the same item.
For our Australian import business,
we purchase everything from China, Malaysia and Vietnam
and 9% (not 90) of everything that we sold on eBay, we sold to overseas buyers.
For many years, this has me perplexed as to why nearly 10%
of everything we import to Australia
is purchased from people in other countries
when pretty much every single thing that we import is available
in other first world countries.
So why would somebody from, say, California
purchase from an eBay seller in Australia
and pay a ton of money for shipping?
The reality is Australia is a big island in the middle of nowhere
and it'll cost a fortune
to post things from this island
And the crazy thing is
pretty much everything we import is available in all other First World countries like America
So, why would somebody, say, in America purchase from us and pay maybe 60 bucks for shipping
from Australia to America when instead spending more time looking around in America,
they could have found a seller offering either free shipping or maybe $10 shipping?
Like I said before, this has me perplexed for years until I finally worked out why.
Once I was in Chicago,
I thought I checked out one of our eBay listings
which was continuously getting orders from the US.
Rather than using my own computer which has cookies, etc on it,
I used one of the hotel computers and searched eBay for the item
Sure enough this item turned up on the first page as an eBay search result,
so the question was,
why was it appearing in the search results?
After a bit of research, I realised that our listing was optimised
for different audience, for different keywords, etc
to the competitors.
Bottom line is it was optimised for different audience.
The reality is, if the buyer just did a bit more research
they would have found local sellers
selling exactly the same item, but with much lesser shipping.
The same goes with dropshipping
So why would somebody purchase the bike from you
and not direct from Kmart?
The reality is
Some people will purchase from eBay
Some people will purchase from the local mall
Some people will purchase from Amazon
everyone's different
Human beings are creators of habit
and they get used to purchasing from one location
Many buyers just use the keywords that come to the top of their mind.
Some people spend time researching other keywords,
others wont.
Bottomline is dropshipping works exactly the same.
It's like most things in life
and a lot comes down to personality topics.
I'm not gonna end to personality topics today,
but some people out there with melancholy personality
will do a lot of research when they purchase anything
from a new toothbrush to a new car.
Other people will just type in keywords
which comes up to top of mind
then they just hit the Buy button.
The melancholy personality will normally that wrong personality to tag with re-selling dropship items
They'll normally spend ages researching and will normally find a cheaper price.
If you wish to tag at a melancholy personality,
you'll normally need to be importing as well.
if you want to tag both audience, you can also start importing your top selling dropshipping items
so you can cut out the middleman and obviously increase your profits.
Then, you can also supply the melancholy audience
Some people prefer to import
Other people just prefer dropship
as they don't want to spend the money upfront on inventory
Everyone's different
and it's important to build a business which suits you,
your means and your personality.
That's all for this week
please scroll down and leave a comment for me below
Until next week, list more sell more, this is Neil Waterhouse