5 ms·

Has anyone on HN done any dropshipping? What was your experience?

LargeWu 6y ago
I have sold some t-shirts in this manner, which is one of the primary subclasses of these stores. Doing this has the advantage of access to legit suppliers based in the USA, so you get predictable shipping times and pretty good quality and customer service. However, it's way more expensive, and the quality of DTG (direct-to-garment, essentially inkjet printed t-shirts) is not as good as screen-printing. I now print my own stuff out of my garage and use on-demand printing as a way to validate ideas or fill gaps in inventory.
ParanoidShroom 6y ago
I did it before the hype and found some trending items. Check the google adwords and the math added up. It worked, no record profits tho. Then big local sellers started undercutting me a lot. I assume they have some data mining trending processes running. Ad costs spiked and it wasn't profitable anymore. It was a fun try, but not worth it for me.
econcon 6y ago
It works and it's easy to test. When I started machinist shop it took me wayyy longer to profit from that shop than dropshipping. Testing is easier and cheaper. Just don't buy bullshit course from idiots. It takes special type of person to crack dropshipping. If you know how conversion rates work, you've basic math, design, and copyrighting skills and you know how statistics work, you can make good money. That said, don't go crazy with greed or you'll blow up your merchant processing account - that's a huge problem to recover from. You don't want bunch of angry customers and if you are totally unempathic to them, you'll lose in long run.
sacks2k 6y ago
I've had a few dropshipping businesses over the years. Here is my experience: Margins are tight. You need to have enough money in the bank or credit to cover loss. This will happen, especially if you are buying anything overseas. All suppliers need to be vetted and checked out. Companies will lie to you, just to get your business. Counterfeits are rampant. If you have a supplier that will sell you something name brand for 1/3 the cost, it's 99% a fake. This will result in: possible lawsuits (if they are in China, our laws don't apply, so the law will go after you), lost shipments at the border (you will most likely eat the cost for this), and losing customer's trust. On top of this, it's so easy for your dropshipping company to steal your customers from under you. Creating your own product/service is the best way to have a long-lasting business and you really won't get rich quickly with any dropship business.
exclusiv 6y ago
I did it in 2000 when it was harder to get setup but margins were great even on electronics like plasma TVs and projectors. I hacked an oscommerce store and piped in inventory from my drop ship warehouses. The side benefit was getting all my personal electronics at a discount. Eventually dropshippers started going crazy low and disregarding MAP pricing so margins were super thin. Some distributers of mine even started direct to consumer sites and selling at the same or lower price as I could get from them. I switched to selling products overseas to Italy that they couldn't get there. Also found some niche electronic products that had margins, manufacturer support (they dropshipped direct not via a distributor) and did well there. That was fun sourcing and marketing unique stuff I liked. Outside of selling unique products, I did my best buying closeout or specials from my distributor in bulk and shipping orders overseas myself. Margins were very nice and fulfilling myself was easy. If you have a business and a sellers permit then you can get setup with distributors. Petra was one I used back then. It's way easier to dropship nowadays, way more competition, terrible margins in general.
BrandonSmith 6y ago
I dropshipped from 2001 to 2004 in the jewelry market. I never really set out to do it, just stumbled into it. I had a friend in the jewelry business that tipped me off on the potential so I started exploring the opportunity. I was in college and thought it an interesting real-world challenge compared to what I was working on in my classes. It ended up paying for my graduate degree and then some. This was years and years before turnkey solutions. So I built my own. Everything was held together with ColdFusion MX 6, which I was a big advocate at the time and into that dev meetup scene. After 6 months of development putting in tons of late night hours, things were fairly automated. I would scan daily email reports and any process exceptions, too, were emailed to me. I never achieved astronomical volume, but it made a decent chunk of change. Just ran on cruise control sustaining me and my family through graduate school. I was an early integrator with the jewelry dropshipper. Orders and order status was communicated over FTP. Cue batch processing jobs. They are still around btw. At the time, they supplied most brick and mortar jewelry shops. Probably still do. This, of course, was before social media of any kind, so my channel was eBay. I was an early integrator with eBay's new API built on something called SOAP. :) I hated it, but after complaining in their dev forums, eBay paid for travel and hotel to their conference in 2002(?) to give feedback in a private session with their developers. I have to give them credit, they were really trying hard to keep things simple and were sincere. There wasn't anything like Stripe at the time, so I was one of Netsuite's first (very) small business customers just as they were beta testing online payments (iirc backed by Authorize.net). NS had a comprehensive CRM, order fulfillment, etc. solution. It is funny to think that NS was actually cheap relative to other offerings. Open sourced a ColdFusion implementation of the integration and a ColdFusion framework ( bothhosted on tigris.org... anyone remember that?). Both had users for a few years. I built an e-commerce website (I sometimes go browse it still on WayBackMachine to reminisce) to try to steer purchases away from eBay to avoid fees. Was navigating the gray area of auction, buy it now, and linking back to my site. Sometimes would get reported for policy violation. In the end, I didn't have budget to market outside of eBay, nor the entrepreneurial spirit to grow it, nor the inclination to bring in investors. My heart wasn't in it once the technical challenge wasn't there. A pattern I've unfortunately repeated over my career. After my graduate degree, I sold it all to a local jeweler and transitioned it to them. They ran it for a few years to supplement revenue that their brick and mortar store was starting to lose because of online jewelers. I got paid for periodic work to fix a bug here and there. They shut it down in 2009 when their store went under. :( Overall, it was a fun run. I learned a heck of a lot early in my career.
benjohnson 6y ago
1995-97: My the key to drop-shipping is buying cheap from one market and selling expensive to another market (market arbitrage). I did this for classic video games - bought from thrift-shops and sold via the web - my web-store was build with MS Access piping out raw HTML that I FTP'd. Customers found my via Usenet and Yahoo's curated links. Worked well - but the problem is that it's easily repeatable because there's no regulatory capture, patents, large-startup costs or other things that makes it hard to start. I soon had competition that killed the margins. Several people that did likewise wound up training their own competition - there employees would leave and mimic their business model. So if you do this, or something like this, make sure your profitability event horizon is really short. Make sure you can exit the business without holding the bag of expenses or inventory.
- beervirus 6y ago
  > bought from thrift-shops That doesn't sound like drop shipping.
  - tdfx 6y ago
    Yeah, that's just retail (assuming thrift shops are considered retail) arbitrage. Dropshipping specifically is when you accept orders for products you don't have in inventory, and someone else fulfills that order for you.
bemmu 6y ago
While a student in Finland, I dropshipped Japanese comic books to Finnish customers. I kept inventory for many items as well, but whatever people wanted that I didn't have in stock I'd dropship for them. It worked OK, but wasn't lucrative at all, just a bit of side income while studying. Can't recall exact numbers, probably somewhere around $500 / month.
code_duck 6y ago
There was a fairly well-known account here years ago for someone who had successful small business dropshipping television racks for wall. Apparently there was a lot of demand for that with small institutions such as nursing homes. I don’t recall who it was. I got it confused with the person who made bingo cards or whatever. Maybe it was the same person.
- RandomBacon 6y ago
  patio11 (Patrick McKenzie) does bingo cards, but I don't think he ever did wall mounts.
  - code_duck 6y ago
    Does anyone recall who does? I remember reading various reports from someone who did wall mount stands and had a successful business, something like an annual turnover of 150 K. I feel like it’s someone who is fairly well known around here, and considering I have had an account for about 10 years I feel sort of embarrassed that I don’t remember their name.
    - RandomBacon 6y ago
      This HN post is 10 years old (https://news.ycombinator.com/item?id=992023 https://news.ycombinator.com/item?id=992023), and links to David Wurtz's website that is timing out. Based on another article (https://bizshifts-trends.com/stupidity-in-business-a-fine-line-between-you%E2%80%99re-fired-and-you%E2%80%99re-genius/ https://bizshifts-trends.com/stupidity-in-business-a-fine-li...) I don't know if the TV mount person is David Wurtz, or someone he met.
      - dwurtz 6y ago
        The tv mount person was me. Article here: https://web.archive.org/web/20091215031722/http://blog.davidwurtz.com/smart-people-should-do-stupid-stuff https://web.archive.org/web/20091215031722/http://blog.david...
csomar 6y ago
I know a couple but they are operating at the (my) local market which is harder to penetrate (Arabic language) and they are not really making that much. Just enough to get by. Also need to be here most of the time to get in touch with customers.

I have sold some t-shirts in this manner, which is one of the primary subclasses of these stores. Doing this has the advantage of access to legit suppliers based in the USA, so you get predictable shipping times and pretty good quality and customer service. However, it's way more expensive, and the quality of DTG (direct-to-garment, essentially inkjet printed t-shirts) is not as good as screen-printing. I now print my own stuff out of my garage and use on-demand printing as a way to validate ideas or fill gaps in inventory.

ParanoidShroom 6y ago

I did it before the hype and found some trending items. Check the google adwords and the math added up. It worked, no record profits tho. Then big local sellers started undercutting me a lot. I assume they have some data mining trending processes running. Ad costs spiked and it wasn't profitable anymore. It was a fun try, but not worth it for me.

econcon 6y ago

It works and it's easy to test. When I started machinist shop it took me wayyy longer to profit from that shop than dropshipping. Testing is easier and cheaper. Just don't buy bullshit course from idiots. It takes special type of person to crack dropshipping. If you know how conversion rates work, you've basic math, design, and copyrighting skills and you know how statistics work, you can make good money. That said, don't go crazy with greed or you'll blow up your merchant processing account - that's a huge problem to recover from. You don't want bunch of angry customers and if you are totally unempathic to them, you'll lose in long run.

sacks2k 6y ago

I've had a few dropshipping businesses over the years. Here is my experience: Margins are tight. You need to have enough money in the bank or credit to cover loss. This will happen, especially if you are buying anything overseas. All suppliers need to be vetted and checked out. Companies will lie to you, just to get your business. Counterfeits are rampant. If you have a supplier that will sell you something name brand for 1/3 the cost, it's 99% a fake. This will result in: possible lawsuits (if they are in China, our laws don't apply, so the law will go after you), lost shipments at the border (you will most likely eat the cost for this), and losing customer's trust. On top of this, it's so easy for your dropshipping company to steal your customers from under you. Creating your own product/service is the best way to have a long-lasting business and you really won't get rich quickly with any dropship business.

exclusiv 6y ago

I did it in 2000 when it was harder to get setup but margins were great even on electronics like plasma TVs and projectors. I hacked an oscommerce store and piped in inventory from my drop ship warehouses. The side benefit was getting all my personal electronics at a discount. Eventually dropshippers started going crazy low and disregarding MAP pricing so margins were super thin. Some distributers of mine even started direct to consumer sites and selling at the same or lower price as I could get from them. I switched to selling products overseas to Italy that they couldn't get there. Also found some niche electronic products that had margins, manufacturer support (they dropshipped direct not via a distributor) and did well there. That was fun sourcing and marketing unique stuff I liked. Outside of selling unique products, I did my best buying closeout or specials from my distributor in bulk and shipping orders overseas myself. Margins were very nice and fulfilling myself was easy. If you have a business and a sellers permit then you can get setup with distributors. Petra was one I used back then. It's way easier to dropship nowadays, way more competition, terrible margins in general.

BrandonSmith 6y ago

I dropshipped from 2001 to 2004 in the jewelry market. I never really set out to do it, just stumbled into it. I had a friend in the jewelry business that tipped me off on the potential so I started exploring the opportunity. I was in college and thought it an interesting real-world challenge compared to what I was working on in my classes. It ended up paying for my graduate degree and then some. This was years and years before turnkey solutions. So I built my own. Everything was held together with ColdFusion MX 6, which I was a big advocate at the time and into that dev meetup scene. After 6 months of development putting in tons of late night hours, things were fairly automated. I would scan daily email reports and any process exceptions, too, were emailed to me. I never achieved astronomical volume, but it made a decent chunk of change. Just ran on cruise control sustaining me and my family through graduate school. I was an early integrator with the jewelry dropshipper. Orders and order status was communicated over FTP. Cue batch processing jobs. They are still around btw. At the time, they supplied most brick and mortar jewelry shops. Probably still do. This, of course, was before social media of any kind, so my channel was eBay. I was an early integrator with eBay's new API built on something called SOAP. :) I hated it, but after complaining in their dev forums, eBay paid for travel and hotel to their conference in 2002(?) to give feedback in a private session with their developers. I have to give them credit, they were really trying hard to keep things simple and were sincere. There wasn't anything like Stripe at the time, so I was one of Netsuite's first (very) small business customers just as they were beta testing online payments (iirc backed by Authorize.net). NS had a comprehensive CRM, order fulfillment, etc. solution. It is funny to think that NS was actually cheap relative to other offerings. Open sourced a ColdFusion implementation of the integration and a ColdFusion framework ( bothhosted on tigris.org... anyone remember that?). Both had users for a few years. I built an e-commerce website (I sometimes go browse it still on WayBackMachine to reminisce) to try to steer purchases away from eBay to avoid fees. Was navigating the gray area of auction, buy it now, and linking back to my site. Sometimes would get reported for policy violation. In the end, I didn't have budget to market outside of eBay, nor the entrepreneurial spirit to grow it, nor the inclination to bring in investors. My heart wasn't in it once the technical challenge wasn't there. A pattern I've unfortunately repeated over my career. After my graduate degree, I sold it all to a local jeweler and transitioned it to them. They ran it for a few years to supplement revenue that their brick and mortar store was starting to lose because of online jewelers. I got paid for periodic work to fix a bug here and there. They shut it down in 2009 when their store went under. :( Overall, it was a fun run. I learned a heck of a lot early in my career.

benjohnson 6y ago

1995-97: My the key to drop-shipping is buying cheap from one market and selling expensive to another market (market arbitrage). I did this for classic video games - bought from thrift-shops and sold via the web - my web-store was build with MS Access piping out raw HTML that I FTP'd. Customers found my via Usenet and Yahoo's curated links. Worked well - but the problem is that it's easily repeatable because there's no regulatory capture, patents, large-startup costs or other things that makes it hard to start. I soon had competition that killed the margins. Several people that did likewise wound up training their own competition - there employees would leave and mimic their business model. So if you do this, or something like this, make sure your profitability event horizon is really short. Make sure you can exit the business without holding the bag of expenses or inventory.

beervirus 6y ago
> bought from thrift-shops That doesn't sound like drop shipping.
- tdfx 6y ago
  Yeah, that's just retail (assuming thrift shops are considered retail) arbitrage. Dropshipping specifically is when you accept orders for products you don't have in inventory, and someone else fulfills that order for you.

bemmu 6y ago

While a student in Finland, I dropshipped Japanese comic books to Finnish customers. I kept inventory for many items as well, but whatever people wanted that I didn't have in stock I'd dropship for them. It worked OK, but wasn't lucrative at all, just a bit of side income while studying. Can't recall exact numbers, probably somewhere around $500 / month.

code_duck 6y ago

There was a fairly well-known account here years ago for someone who had successful small business dropshipping television racks for wall. Apparently there was a lot of demand for that with small institutions such as nursing homes. I don’t recall who it was. I got it confused with the person who made bingo cards or whatever. Maybe it was the same person.

RandomBacon 6y ago
patio11 (Patrick McKenzie) does bingo cards, but I don't think he ever did wall mounts.
- code_duck 6y ago
  Does anyone recall who does? I remember reading various reports from someone who did wall mount stands and had a successful business, something like an annual turnover of 150 K. I feel like it’s someone who is fairly well known around here, and considering I have had an account for about 10 years I feel sort of embarrassed that I don’t remember their name.
  - RandomBacon 6y ago
    This HN post is 10 years old (https://news.ycombinator.com/item?id=992023 https://news.ycombinator.com/item?id=992023), and links to David Wurtz's website that is timing out. Based on another article (https://bizshifts-trends.com/stupidity-in-business-a-fine-line-between-you%E2%80%99re-fired-and-you%E2%80%99re-genius/ https://bizshifts-trends.com/stupidity-in-business-a-fine-li...) I don't know if the TV mount person is David Wurtz, or someone he met.
    - dwurtz 6y ago
      The tv mount person was me. Article here: https://web.archive.org/web/20091215031722/http://blog.davidwurtz.com/smart-people-should-do-stupid-stuff https://web.archive.org/web/20091215031722/http://blog.david...

csomar 6y ago

I know a couple but they are operating at the (my) local market which is harder to penetrate (Arabic language) and they are not really making that much. Just enough to get by. Also need to be here most of the time to get in touch with customers.