- Hi guys, Neil Waterhouse.
Why are people buying this mini trampoline on eBay for $99,
when they could just go to Kmart and buy it for only $39?
That's nearly 60% cheaper.
Or purchase this blower on eBay for $159,
when again they can just go to Bunnings
and purchase for only $109.
This week's quick video is drop shipping explained,
but before I get started
make sure you hit the subscribe button,
to the no fluff, ad free channel
that puts out weekly videos teaching step-by-step
how anyone can build a seven-digit online business,
from their home using eBay and Amazon,
and using less than a hundred dollars.
So, first of all, just so we're on the same page.
The term drop shipping means selling an item, and then
after you've sold the item and the customer's paid you,
you then order the item
from your supplier and your supplier
ships the item direct to your customer for you.
You never see or touch the item,
you supply does all the hard work for you
of warehousing the inventory,
ordering the inventory from the manufacturers,
financing the inventory until it sells,
and then packing and shipping the inventory
to your customers for you.
In the industry, drop shipping is also called
virtual inventory.
With drop shipping, you're always cashflow positive,
as you get paid first before you purchase
any inventory from your suppliers.
So the question is, why do people pay higher prices
on marketplaces like eBay,
Amazon, Gumtree, Facebook marketplaces
and websites like Shopify stores, etc,
when they could just purchase the same items cheaper
from the drop ship suppliers?
The answer is, some people do, do the research
and find the suppliers,
however, others don't.
It's a similar question that I get all the time,
as to why do 9%, that's 9, not 90,
but 9 which is one less than 10,
9% of all orders for our Australian operation
come from buyers in other countries.
Now, when you think about it, it's pretty crazy.
It's pretty much everything that we sell online
in Australia comes from China, Malaysia and Vietnam.
So why is somebody in say California,
purchasing from an Australian eBay, Amazon seller?
If that buyer had just done more research
they almost certainly would have found USA-based suppliers
that we have that have much lower shipping
then from here in Australia.
Pretty much everything that we sell here
in Australia is available in all other
first world countries, like the USA.
Bottom line is, humans are creatures of habit.
Sometimes people will spend the time researching
to find low prices.
Other times they'll just log on to
their favorite market place.
You know, i.e. Amazon, eBay, Facebook marketplace, etc,
and they'll just hit the buy button.
There's also different personality types.
Some personality types, my own colleague center,
like to do research. Others don't.
Now I'm not going to go into personality types
on this videos as I've done that before but...
There is different personality types.
Some personality types will
spend a lot more time researching.
Others won't.
Note though, I'm not recommending
that you use Kmart or Bunnings.
In fact, they've been saying for many years
not to use Kmart as a supplier,
as Kmart puts their branding on their boxes
which can create what is known in the industry as
buyer confusion.
By the way if you want to see more popular
drop ship suppliers,
I've got a free list of over 900 popular drop-ship suppliers
for a previous week's video.
And you can download that right now for free.
I'll put a link on the screen and below.
I hope this video helped you with explaining drop shipping.
Please leave me a comment below
and make sure you hit the subscribe button
to the no fluff, ad free channel that puts
out weekly videos teaching step-by-step how
anyone can build a seven-digit online business
from their home using eBay and Amazon
and using less than a hundred dollars.
Until next week. Stay safe.
List more. Sell more.
This Neil Waterhouse.