Selling products directly vs affiliate marketing

Naws88

New member
Jun 4, 2009
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Is there many people that sell products directly through their sites? I want to actually market and sell products directly rather than do affiliate marketing.

My plan is to find a niche product that is hard to find in your local store, one that people look on the internet for. Then I would contact the manufacturer and buy the product wholesale to resell on my site. Ideally I would like to work out a way for the manufacturer to ship the product directly to the customer so that I don't have to deal with inventory and my starting funds are low so I can't spend a lot on inventory right away.

What are your thoughts on this? What are the pros/cons of doing this rather than affiliate marketing?
 


If it was that easy, everyone would do it. There are several significant hurdles to your plan.

Drop shipping is not as easy as calling up a manufacturer and saying, "hey Bose, yeah, this is Joe Blow... I need you to start drop shipping your noise canceling headphones for me.... Yes, that's right, you do all the work and I'll send you a small number of customers." Remember, manufacturers are businesses too. They don't want to invest the time, energy, and manpower drop shipping takes unless its worth their while and, most of the time, it isn't worth their while for a small-time guy. Even if they already run a drop-shipping operation, adding another customer has expenses! In my experience, if a company is willing to drop ship, they will want some sort of deposit or security up-front from you and they often have minimum volume requirements. Are you ready to meet those requirements?

Even if you do find a company willing to work with you, your problems have just begun. You now need to vet them. Are they reliable? Are they located overseas? Do they make a quality product? Is there product potentially dangerous or harmful? If they're overseas, you could be left holding the bag if a customer sues you. Even if they're domestic, you could be caught holding the proverbial bag of shit. Just look at all the Chinese-made junk that has killed people in this country and now imagine you're left dealing with a victim's family suing you because you distributed your bogus widget that got their daughter killed. Are you willing to assume the risk?

Running your own product means that you are responsible for everything from legal to customer satisfaction. You need your own lawyers, you need your own customer support system, you need to process returns, you need to do the legwork when a customer doesn't receive a product, etc, etc. Are you ready to build that infrastructure? What happens if your trusted manufacturer disappears, goes out of business, or gets acquired by someone else and doesn't feel like filling your orders anymore? Sure, you might have a contract, but are you willing / financially able to take a company to court to enforce it?

Basically, there are huge hurdles that you need to overcome and I would encourage you to spend a little more time doing research here and on the internet. Like canucksfan said, there are lots of headaches associated with running your own business and assuming the responsibility of being the vendor and the seller. Yeah, it's nice to get a higher payout per sale, but that payout comes at a cost which, on small scales, often exceeds the increased profits you make.
 
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I have to agree with the others. Drop shipping is only good if you expect to get enough in sales to support the extra staffing. We found that drop shipping is best for high ticket items... but still, its a pain.
 
Thaks for the response, you made some good points

Now I dont expect this to be easy at all, I am fine with dealing with the headaches of running the business if it is profitable, after all nothing easy is really worth doing, I dont think affiliate marketing is easy either.

About the drop-shipping, you are right it will be hard to find a company willing to do it. A person whom I spoke to that does this said that the product that he has dropshipped is 100+ pounds that the company already ships to customers anyways so it was worthwhile for them to do it.

The legal stuff is a bit worriesome.

I will continue brainstorming possible products and research more on my options such as affiliate marketing.
 
I did some of this about 5-6 years ago. It was a little funny.

I did some of the straight up dropshipping. Had a tax number from the state and stuff. Sold stuff on Ebay like $1500 CD duplicators with only about $80 profit on the sale.

I also did some stuff you wouldn't expect could work. We got a catalog in the mail, so we'd just build an ebay store listing 100's of items out of the catalog at about 1.5-3X what the retail price was. Then when something sold, we'd call up with our paypal debit card to order it and say "Can you ship it to my friend? It's a gift. Please don't put the price in the package." Some people assume ebay is the cheapest and not shop for a better price.

It does work better with high ticket items. Your time and effort is the same. Although risk of fraud may be greater with some high ticket items.

Drop shipping can definitely work, but those days are long behind me and this forum is full of affiliate marketers. There is probably a forum for drop shippers who would be better suited to your needs.