Lisafuller wrote: ↑Sun, 31 Dec 2023 2:09 pm
I'm sure there are success stories, but for the most part I know it to be a bust.
Like any business, those with a plan and a clear understanding of the ecosystem in which they operate are usually more successful than those who simply shoot in the dark. And I agree, most people who start drop shipping businesses have visions of sugarplums dancing in their heads, salivating over a relatively low capital investment that produces sterling returns, or so they think... like the fellow that started this thread.
But, drop shipping and e-commerce companies appear to be the future for retailing. Absolutely massive warehouses are being built in droves around all major cities, to handle fulfillment center activities.
Here's a hedge fund company that invests in and buys up e-commerce companies. I don't recommend it, only put it up as an example to show you that the drop shipping industry is much larger than you might imagine. Most e-commerce these days is drop shipped, even well known brands.
https://open.store/
Here's a hedge fund that takes the process from a different tack:
https://pinonhillcapital.com/why-pinon-capital/
These folks want to sell you their bonds, which in turn they use the proceeds to buy or invest in e-commerce businesses. Note that they say it's a "trillion dollar industry".
Even brick and mortar stores that used to handle their own shipping have moved to the drop ship model, either utilizing their own warehouses or those of a fulfillment center. It's hard to beat the economy of scale.
In the USA, about 50 percent of all new businesses fail within the first 5 years. Drop shippers will be no exception, and might be higher because of a failure to identify the market segment, develop a marketing plan, and control fulfillment costs. Drop shipping is most assuredly a legitimate business model but like all businesses, requires a sound approach.
This is but one giant warehouse northwest of Houston... Zoom in... those long things surrounding the building by the hundreds are 18 wheeler semi-trailers.
https://maps.app.goo.gl/dz49mLVYwZkn7bJX6