First, to dismiss any concerns that I am an idiot…..dropshipping is good. It is a money saver, and my cash doesn’t get tied up. I understand its merits to my business. I am not going to stop doing this-no room for negotiation.
Second, there are certain issues that are a natural part of stocking items:
- Do you have warehousing space or garage space or some other space you can scrape together?
- Can you guess best what your customers will want?
- Do you have enough cash allow your money to sit in your warehouse?
And, obviously in my mind, stocking big items is not even an issue. I am willing to take less margin and make whatever margin I can off of the larger items. The issue here is are there some items that are worth stocking while dropshipping the greater portion of your product?
And, the answer to this question is my present quandry. Here are what I view as an acceptable option to stocking items:
- I “bought” into a distributorship last year. I had a product line I really wanted to have. And, the only way to get “in” was to have a certain size initial order. And, I bit and bought in. I now have some clearance items I need to get rid of. Fortunately, I have had to reorder the items I really wanted. “Stocking” was necessary here, but a Clearance sale is coming soon for the other items.
- Buying in volume to get better pricing on items sold on existing websites. Frankly, this is the reason I am writing this entry. Should I buy items at 80% off the price the individual item is available on a import website OR should I discontinue the item entirely? Based on sales, I am leaning toward discontinuing the items. [Translate: see the Clearance portion of my site]
In quick summary, I am certain a mix is the best option. I believe a business/website needs to weigh its overall goals. If a product is a “must”, then you negotiate and stock a few things. But, if the profit is minimal and the product is not one of your core items, I recommend strongly emphasizing the dropship products made available to you by your manufacturer…..I think I will. 😉