Is dropshipping a good business for the masses? If everyone sells the same stuff for the same price, how would they earn enough money?

I plan to open the first dropshipping market place in a country where people download few xml lists from different suppliers. Multiple xmls requires multiple api integration for each cart sw. The market place will collect these xmls and put them in a single xml format for single api integration. This model exists in USA. Retailers are looking for new products to sell everyday, but because the xlm lists are free, everyone sells the same stuff. Instead of selling everything, the retailer should find a "unique" product or service or price, right? If you look at Amazon, Ebay etc, people keep selling the stuff with the same price. How is this so?


Ideally these days you want to manufacturer and sell your own products. While I don't want to say the drop-ship model is dead yet, it is definitely dying. Selling someone else's products has become much more difficult and risky for a number of reasons:

1. Amazon - they can decide to sell the product you are selling at any time, and given the volume they can churn along with their low margins you'll never be able to compete. On top of that, customer's user Amazon AS a search engine, so if they are selling the same product as you the customer will never even find you.

2. It is much easier for the manufacturer to sell direct to the customer these days, and when they do that it will be impossible to compete directly with them.

3. Google has made it tougher as they are pretty strict about duplicate content. If you just upload a CSV from the manufacturer using the same title and description as everyone else, chances are Google is just going to list one of them, probably the one on the Manufacturer's web site.

If you do want to sell a product from another company, become THE authority on that product. If you want to sell Red Widgets, build a site that is rich in information and advice about Red Widgets and make it a destination for everyone who wants a Red Widget. Another site may be able to undercut you on pricing, but if you prove yourself as an authority you will build up customer trust and repeat business. Amazon may be able to compete on the number side of things, but they are by no means experts on the products they sell.

Ideally though, having full control over the supply chain of your product is what you want. You need to either make whatever you are selling yourself, or reach an exclusive deal with the manufacturer of that product.

Answered 8 years ago

It's better to approach product owners and structure the deals rather than pull from a directory of dropshipped goods.

You get a unique product, more flexibility over terms, and in some cases exclusivity

It's tedious if you are looking to create a wide offering in a marketplace but this is my perspective for a better chance at success.

Answered 8 years ago

Your question is not clear. Are you asking how the sellers should differentiate themselves to make more money or are you asking wether your platform would make sense given that all sellers have access to the same files?

Answered 8 years ago

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