My name is Kevinand I'm 24 years old. This is the
true story of how during the summer of 2001, I made $40,000
selling dropshipped goods on ebay only to lose it all and
end up with $4,000 of debt. Read my cautionary tale to prevent
yourself from making the same mistakes that I made.
I first found out about dropshipping back in June of 2001
a little after I started a not-so-profitable business on eBay
selling cell phone accessories and such. I saw dropshipping
as an all profit method of business. You don't pay for shipping.
You don't pay for inventory. You basically just advertise
the product on auction websites such as eBay, take orders,
collect the money, and pay the set amount for each item to
the dropshipper keeping the remaining amounts for yourself
as profits. I now realize that it is only that easy when you're
dealing with the right person.
I first started dropshipping with a guy named Chris. I was
selling Nike Air Jordans on eBay. I saw that Jordans are real
popular on eBay and people pay huge amounts for them. I've
seen some pairs go for $1,000+. Chris only charged me $67
a pair. So, I basically just doubled the price and sold them
on eBay for $134 a pair. I sold about 20 pairs of shoes within
a week giving me a profit of $1,340. I suddenly became happy
with the success I had because obtaining over $1,000 in a
week at the age of 19 is pretty rare. So, I wanted to start
putting up way more auctions so that I could make way more
money. Unfortunately, this is when Chris became unreliable.
He never returned any of my e-mails and never got back online.
Plus, he only had shipped half of the 20 orders I had. So,
I decided that I needed a replacement quick before I started
to have some unhappy customers on my hands.
This now brought me to dropshipper #2. I talked to the guy
about the situation and he said that he would be able to handle
it. I paid him for the remaining 10 orders I had left and
he shipped the shoes off to my customers. I respected the
fact that he picked up right where my previous dropshipper
had left off at and took care of business. So, I assumed that
this guy was all about business and was a very reliable and
legitimate dropshipper. So, I started to put up more buy it
now auctions and these shoes were selling faster than I could
put them up for auction. This is the unbelievable part. I
had sold 250 pairs of shoes in a matter of 4 days. I collected
over $40,000 in 4 days. That's $10,000 a day! This came as
an amazement to me especially since I was only 19 at the time.
I've made some people's yearly salaries in a matter of only
4 days. Little did I know though that I was in over my head.
I got a little too greedy and started to splurge on money
that wasn't even mine yet; buying clothes, shoes, and even
put a $1,000 down payment on a new car. My dropshipper shipped
my first 30 orders only to find out that he had shipped off
nothing but all wrong sizes and wrong colors. So, I had a
lot of complaining customers. Some even went straight to PayPal
to complain causing PayPal to limit access to my account.
So, now I had over $40,000 sitting in my PayPal account that
I had absolutely no access to and over 200 orders that need
to be shipped off. So, my only option was to refund everyone
their money back to get my PayPal account back to regular
standing, which brought me to my next dilemma...
I spent almost $4,000 of the $40,000 I thought would be mine
to keep. So now, my Paypal balance was negative $4,000 and
I needed to come up with that $4,000 quick before PayPal took
legal action to get that money. I thought the only way to
get me out of this mess was by the same way that got me into
this mess. This is what brought me to dropshipper #3.
I stumbled upon a guy named Jarell. I found him through a
legitimate business website so I decided to sell enough pairs
of Jordans to make up the $4,000 and then I'd call it quits
because this was too much for someone so young. Everything
went smooth and I was able to make the $4,000 using my girlfriend's
PayPal account. Unfortunately, PayPal then limited access
to her account also finding out that she was linked to me.
This then aggravated me because now I had 15 orders that I
in no way could pay my supplier. If I had shipped to my customers
it would bring more complaints and negative feedback which
was very bad for business. That was then, this is now.
After reviewing my whole experience with dropshipping in
hindsight, I realized all of the mistakes that I had made.
For anyone who is looking into working with dropshippers,
please pay close attention.
Before going into business with someone who is going
to be dropshipping merchandise for you, be sure to get to
know the person really well. Don't go by instinct. Have
a few converstations with the person before you start anything.Collect
all methods of contact of the dropshipper for emergency
contact.
I suggest that you do not start off having the dropshipper
ship the merchandise to your customers. Order some of the
merchandise for yourself and examine it thoroughly before
you go into business. I started to recieve e-mails from
angry customers stating that the Jordans were of terrible
quality when I was told by my dropshipper that they were
of authentic quality.
Don't bite off more than you can chew. As stated previously,
I sold 250 pairs of shoes in 4 days. Within those 4 days,
I had to deal with about 600-700 e-mails which is almost
impossible for only one person to deal with that also has
school to worry about. Patience is the key to success.
These were a few of the mistakes that I made dealing with
dropshipping. I had a price to pay for my mistakes. I owed
$4,000 to PayPal and I had a $2,000 eBay bill that I ended
up working during the summer to pay off. My purpose in writing
this is for everyone considering going into business with
a dropshipper to take precautions and use the tips I provided.
I would also like to say that even though i had a bad experience
dealing with dropshipping, that is not always the case. I
know there are some people who have become successful and
wealthy off of dropshipping.
Five years have passed since I began my journey in this industry.
I finally did pay off all of my debts that summer and have
made it my mission to educate and inform people of the scammers
out there waiting to ambush the inexperienced and naive. I
wrote this article because I don't want anyone else to go
through the experience that I did. There were times where
I felt hopeless and bitter for falling into a trap that left
me feeling depressed. Needless to say, I have learned from
my soul-crushing mistakes and now make a decent living selling
on ebay.
Kevin Nobleman has researched and uncovered numerous
scams in the corrupt online drop ship industry. He has written
special articles to help people avoid drop shipping scams.
Kevin has discovered over two dozen legitimate dropshippers,
wholesalers, independent suppliers and buyer/seller communities.
Read about it at http://www.restaurantandbar.org/.
