Been using a new strategy of scouring Quora to find popular topics in drop shipping over the past month and it’s opened up a new can of questions that I can address for all of you.
Today, I want to address the question, “Should I use a drop shipping directory when starting my online store?”
It’s a question I’m sure that every eCommerce entrepreneur asks themselves as they learn about the drop ship business model. I admit that I even asked myself the same question and spent hours researching different drop ship directory businesses online before realizing that it was not going to work.
To answer the question, “No, you should not use drop ship directories.”
In this article, I’ll dive into my experience with drop ship directories and I’ll explain why it’s not a good choice for getting your online store off the ground. It’s not a strategy that will create long term sustainability for your business.
“Should I Use a Drop Shipping Directory?”…NO!
I started drop shipping online, specifically on Amazon.com, in 2009 while still a college student at Quinnipiac University.
My business partners and I had discovered the drop shipping business model and I was intrigued to learn more. I was determined to find more suppliers that had the ability to drop ship and I wanted access to as many products as I possibly could as fast as possible.
Where did this take me? Straight to Google where I started entering searches like the ones below.
Search term: “drop shipping suppliers”
Search term: “suppliers that drop ship”
Search term: “how to find drop ship suppliers”
Search term: “best place to get drop ship products”
Today, there are actually useful results from eCommerce companies and platforms providing advice to young eCommerce entrepreneurs on how to find drop ship suppliers, but it wasn’t always that way.
When I was searching back in 2009 and 2010, the results were all littered with drop shipping directories that promised you the world.
Doba, Prime Example
Take a look at this company below, Doba, a prime example.
They’ve been around for quite some time (I’m not sure how) and they continue to market themselves as “Drop Shipping. Simplified. Discover new products more efficiently, streamline your order management, and leave shipping to the supplier so you can spend more time growing your sales.”
Yes, those are all benefits of the drop ship business model, but it’s quite a hoax to what Doba actually does for you as a drop shipping directory.
At Doba’s core and at the core of many other drop shipping directories, they provide you with a database of products from suppliers that they’ve managed to sign onto their website.
When you sign up for a monthly subscription, you “gain access” to all of the products that they have through their drop ship database. But so does all of the hundreds of other eCommerce entrepreneurs that were tricked into using Doba.
What Makes a Drop Shipping Directory BAD
1. Your Margins Deteriorate
Your ability to stand out from the competition becomes extremely difficult because everyone is being supplied with the same products at the same prices. And the prices are not great. As you may know, if you buy directly from the supplier, you receive a wholesale price. Well when you go through a drop shipping directory, you get charged a markup for gaining access through their database so your costs go up making it harder to make profits.
2. You Are Competing With Hundreds of Others For Sales on the Same Products
Any drop shipping directory that is doing well for themselves is not doing well by their customers. Imagine a drop ship directory that has 1,000 customers accessing their drop ship products. Assume half of them (500) are selling on Amazon. That’s 500 people that you’re now directly competing with.
Yikes. That’s not a recipe for success….more like a recipe for disaster.
3. You Are Not Working Directly With the Supplier…There Is No Long Term Potential
When using a drop ship directory, you have no contact with the supplier meaning that they don’t even really know you are selling their products. Let’s say you find a way to sell a ton of their products, well, it’s hard for you to use that leverage as a way to form a stronger relationship with them because you are getting their products from the drop ship directory.
4. Intellectual Property Rights Issues
When getting products from a drop ship directory, you are trusting their word that they can pass along the IP rights from the supplier to you.
Let’s say that the drop shipping directory does not have all of their i’s dotted and t’s crossed and they don’t communicate to the supplier that you are selling their products on your online store.
That supplier has a team of people that go out and look for sellers that are not authorized in their database. They find you and send you a cease and desist letter stating that you do not have the right to sell their products. Worse, if you are selling on Amazon, they contact Amazon complaining.
This could lead to your eCommerce store being shut down or a source of revenue being drastically cut back. Not to mention the headaches that you have to deal with while explaining to them that you are using a drop shipping directory to gain access to the products and you thought that it was okay.
Find Drop Ship Suppliers the Right Way and Avoid Drop Shipping Directories
If you want to build a profitable and long lasting drop ship business, do it the right way. Research products that you want to sell, find contact information for the supplier’s wholesale department, and reach out to them to create a relationship.
Drop shipping directories offer a shortcut that many young and inexperienced eCommerce entrepreneurs are attracted to because it drives into the myths out there that “you can make money fast with drop shipping.”
Stop believing that myth.
It’s not easy to build a drop ship business. And drop shipping directories aren’t going to make it any better.
Look at any successful drop shipping online store. I bet they are not using a drop ship directory. Maybe they did when they started, but then they realized that it was not worth it in the long run. They probably look back at it as a mistake.
Don’t make that mistake that so many other eCommerce entrepreneurs make. Take the more difficult, but more promising route from the beginning.
If you have any specific questions about drop shipping directories, let me know in the comments. You can also reach me directly at Connor@ConnorGillivan.com.