David.Pagotto

First, Learn How to Get a Dropshipping store

In order to get a dropship store, it is important that you learn how to operate a website, how to get visitors to your website, and how to perform the art of dropshipping. In order to get a dropshipping store, it is important that you find an e-commerce type website script or template. This way, you will be able to perform transactions with a kind of ease. You can also set up an eBay store, and start dropshipping items directly to your customers through your store.
Benefits of a Website

When you run a dropshipping store through a website, it opens up a whole new world of money making potential. First of all, you will find that you have the freedom to do basically anything you want. You will have complete control of the design of your site, in fact, you will be able to completely control what marketing methods will primarily be used in order to get traffic to your website.
Also, by hosting your own websites, you may also be able to create a sub-domain, and have a blog that actually advertises your website. So not only will you get tons of targeted visitors to your e-commerce site, but you will also be able to use things such as Google adsense, and get paid for every single advert that gets clicked on your website.
Benefits if an eBay Store

Getting exposure for an eBay store is a very easy thing to do. In fact, all you have to do is keep listing consistently on the eBay marketplace, and advertise your store on every single one of your listings. Over-time, you will gain a huge variety of people coming to your eBay webstore. You will eventually have the ability to sit back and reap the benefits.

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Australian Buisness Forum \\ Australian Business Directory \\ Australian Business Blog

Elven

Hi David,

First, we need to define what dropshipping is, and how it works.
A manufacturer or distributor will drop ship for a retailer or direct marketer.

The distributor takes an order from the direct marketer, places the direct marketer's invoice and/or logo on the packaging, then sends it on to the customer. The customer pays the direct marketer.
The direct marketers (retailers) take on the costs of advertising and marketing, providing the distributor with a broad number of outlets.
Inserting the retailers' paperwork and shipping to the customer, is what delineates a dropshipping retailer from a reseller. A reseller simply resells a company's products - there is no attempt to imply the product is their own, or that they are the distribution point.

Dropshipping reality in Australia
Dropshipping is not the same here in Australia as it is in larger countries such as the US and UK.

There's a pretty fair description of the situation on eBay by a member called 'ozwholesale.'

A quick summary is because the Australian market is so much smaller, there is not enough competition to force manufacturers and first line wholesalers into dropshipping. That competition was what forced this level of distribution into doing dropshipping in other markets.

There are simply not enough Australian manufacturers; and the demand for Australian-made goods compared to imports is low.

An undeserved bad name
In Australia, dropshipping has gotten an undeserved bad name because the companies who are willing to dropship are down the distribution line a couple of steps.
Australian retailers have to accept the realities of their market.

These companies would be loosely called 'Distributors' or more correctly 'Reseller outlets' in other countries.
They've gotten a bad name in Australia because they put their own markups on the products, and reduce the expected profits of direct marketers. -- The loss of that expected profit has caused a great deal of resentment (and mutual ire) amongst Australian retailers on eBay and from websites.

Breakdown the costs
A good breakdown of the costs is available in this article on Export Pricing.
If you scroll down the page to the proforma cost breakout, you'll see an illustration of the domestic and international pricing. Companies that are willing to drop ship in Australia are paying nearly the domestic price for the goods, which leaves very little profit for the retailer/direct marketer.

In the example, a product that costs $7.50 at the factory costs $13.50 to import, and $20.30 retail. Of that, the dropshipper takes about $4.72 of the $6.77 markup in country, leaving the direct marketer $2.05 profit.

Retailers have costs too
The problem is the direct marketers have costs, too. The costs are more than just having a website or a store on eBay.
There is a time cost. Since few distributors offer dropshipping services, the retailer is often a reseller. The time spent repackaging a product is only considered by experienced businesses. It surprises beginners.

Advertising and marketing. It is a rule of thumb that a startup business will spend 40-50% of its cashflow on marketing.
This is a reality even on the Net. tYou can have the greatest website ever made, but if no one finds it, you have a resume entry at best.
Lee Iococca, the guy who saved Chrysler and invented the Mustang, once said: "I know I could do without half my advertising budget. I just don't know which half."

Is there an answer?
Yes, but it means dealing with the realities of the Australian market.

• Instead of expecting quick profits, build the presence of the company slowly. That means over 3-5 years of low profits or losses.
• Try to find distributors who are more direct lines to manufacturers. Their prices will not be a great advantage. They're still importing.
• Develop good business relations with distributors over time, which will result in credit sales and lower prices for smaller quantities.
• Find Australian manufacturers and/or international offices. In both cases, you'll be talking about larger unit volumes. Few Australian manufacturers will give real wholesale prices for small orders. The distribution channels are just not well enough developed.
• Don't worry about dropshipping services, build your business as a reseller of recognizable brands. Build off the brands!
• As much as possible, import small quantities directly from the manufacturers or distributors overseas.

The Good News and the Bad News
The Good News is 65-70% of Australian households and businesses have access to the Net. Further, this rapid expansion of access has been very recent, only in the last 5 years or so. Australians are still very naive and cautious about the Net.
The Australian government has spent millions to make consumers afraid of the Internet. The result is a very wary, recalcitrant public.

The Bad News is only 30% of those households and businesses will purchase from the Net.
Further, even when purchasing from the Net, more than half the consumers will want to fax, phone or even email their payment details. You can tell someone all day that sending credit card information in an email is dangerous, and that's why you have a secure payment gateway, -- and they will still send you their credit card info in an email.

Your customers want to talk to a "real person", even if they are spending $20.00 - and that means you work for less than $1.00 per hour many times. They want to send that real person a fax, or read their details to you over the phone, .. etc.
The time cost comes up to bite you.

Elven

ammulu

Dropshipping is really clear to me now. I did bookmark this page for future reference. Thanks to you both for this information.