Advice on drop shipping for an existing supplier
Discussion
Evening everyone.
A friend recommended I drop in here for some real world advice on a business situation, I have browsed the forum a few times in the past and currently the owner of a Focus RS so a bit of a pistonhead.
I will try not to go in to too much detail on this but my company has been working with a supplier in Europe for about five years now, we imported a brand to the UK and sold throughout the UK and EU successfully for a while. The problem we faced is the brand had a UK distributor who would not give us a dealer status even though we were probably selling more than 90% of their dealers.
Long story short is the on going battle to import and sell these products in the UK became a headache and we recently laid off importing that product/brand as it wasn't worth the hassle.
The company/brand HQ it self based in China I believe told our EU distributor to stop selling to us but he can sell throughout the EU and UK if he wishes. Kind of like a bribe in a way as the are allowing him UK/EU sales but want us out the picture as were UK based with regular customer base apparently undermining their dealers. Fairs fair and we backed off but our EU supplier is wanting to continue in an indirect way as he is missing out on the best market for this product which is the UK.
He has no infrastructure here, not 100% fluent English and absolutely no sales history within the UK so really them giving him the UK market was pointless as he doesn't have the scope to sell here successfully. Which is where we can come in and help.
We are currently on the top tier in terms of trade pricing and can still maintain a healthy margin on his products with the above.
My plan is to create a UK website for his EU company/website where we can show case his products and list them to buy. We will then spread the word through forums, classifieds etc to bring custom in. My original company which was the importing one will not be involved in anyway so the suppliers wont see an issue there as it simply looks like he has created a UK site but it will be maintained by us.
These are high value products with a good profit margin so its a worth while investment if it works.
It seems like a win/win really as we are still in-directly earning but I was looking for some outsider views on this and any potential pitfalls etc?
He is a bit behind the times in terms of marketing, web development and so on so I think with the right push and our existing marketing plan we can get him up to date and boost his sales within the UK & mainland EU.
Thanks in advance, all feedback is appreciated.
A friend recommended I drop in here for some real world advice on a business situation, I have browsed the forum a few times in the past and currently the owner of a Focus RS so a bit of a pistonhead.
I will try not to go in to too much detail on this but my company has been working with a supplier in Europe for about five years now, we imported a brand to the UK and sold throughout the UK and EU successfully for a while. The problem we faced is the brand had a UK distributor who would not give us a dealer status even though we were probably selling more than 90% of their dealers.
Long story short is the on going battle to import and sell these products in the UK became a headache and we recently laid off importing that product/brand as it wasn't worth the hassle.
The company/brand HQ it self based in China I believe told our EU distributor to stop selling to us but he can sell throughout the EU and UK if he wishes. Kind of like a bribe in a way as the are allowing him UK/EU sales but want us out the picture as were UK based with regular customer base apparently undermining their dealers. Fairs fair and we backed off but our EU supplier is wanting to continue in an indirect way as he is missing out on the best market for this product which is the UK.
He has no infrastructure here, not 100% fluent English and absolutely no sales history within the UK so really them giving him the UK market was pointless as he doesn't have the scope to sell here successfully. Which is where we can come in and help.
We are currently on the top tier in terms of trade pricing and can still maintain a healthy margin on his products with the above.
My plan is to create a UK website for his EU company/website where we can show case his products and list them to buy. We will then spread the word through forums, classifieds etc to bring custom in. My original company which was the importing one will not be involved in anyway so the suppliers wont see an issue there as it simply looks like he has created a UK site but it will be maintained by us.
These are high value products with a good profit margin so its a worth while investment if it works.
It seems like a win/win really as we are still in-directly earning but I was looking for some outsider views on this and any potential pitfalls etc?
He is a bit behind the times in terms of marketing, web development and so on so I think with the right push and our existing marketing plan we can get him up to date and boost his sales within the UK & mainland EU.
Thanks in advance, all feedback is appreciated.
It might work as a “vendor” store. You create the store and market it and use a vendor plug in, when an item sells you get a cut of the sale but the rest is down to your drop ship supplier.
That way you’re only marketing and maintaining the site with no other link to the physical sale of the items.
What have you done to piss the brand and UK distributor off so much then?
That way you’re only marketing and maintaining the site with no other link to the physical sale of the items.
What have you done to piss the brand and UK distributor off so much then?
Thanks for that info. I have just checked out the vendor plug in and it would be ideal for what we need.
We also work with a few other suppliers who in the past have been pulling back on exporting so this could be a good way for them to continue UK sales while we get a sizeable kick back for each sale.
Nothing in particular to piss them off, basically just continuing to import and sell when they asked us not to... but yet they still wont make us a dealer so as they say 'business is business' and we continued!
We also work with a few other suppliers who in the past have been pulling back on exporting so this could be a good way for them to continue UK sales while we get a sizeable kick back for each sale.
Nothing in particular to piss them off, basically just continuing to import and sell when they asked us not to... but yet they still wont make us a dealer so as they say 'business is business' and we continued!
Make sure you get tracking info quickly
Agree the returns procedure
Ensure the goods are insured in transit
Ensure the supplier doesn’t accidentally include their details (do an anonymous test purchase).
Ensure all UK areas that include water are correctly priced.
Automate as much as possible.
Agree the returns procedure
Ensure the goods are insured in transit
Ensure the supplier doesn’t accidentally include their details (do an anonymous test purchase).
Ensure all UK areas that include water are correctly priced.
Automate as much as possible.
Thanks for the info.
From past experience we use DPD which is fully insured and only takes about 5 working days to be delivered to the UK, fully tracked.
In regards to the supplier including any info so the customer knows were it came from, is this a problem?
My plan was to just take our cut and then allow the supplier to post direct to the customer, if there is then a problem in the future (warranty for example) they can then speak direct with the supplier rather than us, the middle man.
From past experience we use DPD which is fully insured and only takes about 5 working days to be delivered to the UK, fully tracked.
In regards to the supplier including any info so the customer knows were it came from, is this a problem?
My plan was to just take our cut and then allow the supplier to post direct to the customer, if there is then a problem in the future (warranty for example) they can then speak direct with the supplier rather than us, the middle man.
Ukadvice said:
Thanks for the info.
From past experience we use DPD which is fully insured and only takes about 5 working days to be delivered to the UK, fully tracked.
In regards to the supplier including any info so the customer knows were it came from, is this a problem?
My plan was to just take our cut and then allow the supplier to post direct to the customer, if there is then a problem in the future (warranty for example) they can then speak direct with the supplier rather than us, the middle man.
Is it an item you would repeat buy or buy regularly within the portfolio? if so your supplier may want subsequent orders for themselves.From past experience we use DPD which is fully insured and only takes about 5 working days to be delivered to the UK, fully tracked.
In regards to the supplier including any info so the customer knows were it came from, is this a problem?
My plan was to just take our cut and then allow the supplier to post direct to the customer, if there is then a problem in the future (warranty for example) they can then speak direct with the supplier rather than us, the middle man.
DSLiverpool said:
Is it an item you would repeat buy or buy regularly within the portfolio? if so your supplier may want subsequent orders for themselves.
Luckily its not, realistically the customers buy every 18-30 months on average.I have been thinking in to it a bit more and might consider using a generic name so nothing linked to the EU supplier we have been using and look at getting other shops either from the UK or EU on board to promote their sales. If we are just taking a cut and not charging a monthly or set up fee there isn't anything to lose and hopefully we can then build up a portfolio of various brands and showcase the best offers to visiting customer?
I think getting EU shops on board will be the best solution as selling a high value product in a country such as Spain where the national wage is much lower than the UK for comparison makes sales harder for them. If they have the chance to advertise their products at (possibly) a lower rate than other suppliers on a UK site it should help them significantly. The customer doesn't really need to know where the product comes from as long as its a verified supplier with manufacturers warranty.
Business boost their sales & customers save some money. Seems like a win/win.
What about this model - you have several "brands" such as the one you have now and other complimentary ones that lack a decent UK presence. They are all featured on your "Car parts unlimited" website and you either drop-ship or fulfil from stock. The brands can actually add / edit the content on your site if they wish as well. Each brand has a landing page and a data centre of PDF`s etc.
Just doing exactly this for clothing brands.
Just doing exactly this for clothing brands.
DSLiverpool said:
What about this model - you have several "brands" such as the one you have now and other complimentary ones that lack a decent UK presence. They are all featured on your "Car parts unlimited" website and you either drop-ship or fulfil from stock. The brands can actually add / edit the content on your site if they wish as well. Each brand has a landing page and a data centre of PDF`s etc.
Just doing exactly this for clothing brands.
Definitely worth looking in to. I think a drop shipping method would work best in this scenario so the dealers keep stock rather than us having to get storage and deal with couriers. Basically trying to minimise any delays or problems on our part and make it as automated as possible like you mentioned.Just doing exactly this for clothing brands.
If we had X amount of brands on a single site how would/could we get each brand a specific landing page.
Do you mean if someone searches for 'XX product' it will take the customer to that section of our site rather than 'X's products'?
I had a look at Magento vendor add ons and it looks good, as you mention it gives each supplier their own access to add, remove or edit their stock on our site. All very straight forward and hands off for us
Thanks, that would be the plan.
Hopefully this could lead somewhere. Now just to sit down & plan it out then look at costing and see if there is the market there.
Currently no competition which is a bonus and I think heavily marketing to both customers and businesses gives us a boost from both parts.
Hopefully I can out source some sales rep work to companies within Europe and they can then target shops within their country and explain the process to hopefully get some on board.
Quick question if you don't mind, if I had a few suppliers with the same product but one was cheaper what would you do. Is it worth listing them all with a price range or just the cheapest one. Obviously the buyer would go for the cheapest but you don't want to turn your back on some other suppliers just cause there a little bit dearer on a certain product?
Hopefully this could lead somewhere. Now just to sit down & plan it out then look at costing and see if there is the market there.
Currently no competition which is a bonus and I think heavily marketing to both customers and businesses gives us a boost from both parts.
Hopefully I can out source some sales rep work to companies within Europe and they can then target shops within their country and explain the process to hopefully get some on board.
Quick question if you don't mind, if I had a few suppliers with the same product but one was cheaper what would you do. Is it worth listing them all with a price range or just the cheapest one. Obviously the buyer would go for the cheapest but you don't want to turn your back on some other suppliers just cause there a little bit dearer on a certain product?
All the products will be the same, just different shops selling the same product.
In regards to payment do you know if there is a way for us to receive the commission separately to the purchase price.
My only concern is if we are taking order for £1000 - £5000 we will quickly hit the VAT threshold but I would prefer to avoid for now but if we just receive our commission separately it will make accounting a bit easier and save us time having to pass on payments.
In regards to payment do you know if there is a way for us to receive the commission separately to the purchase price.
My only concern is if we are taking order for £1000 - £5000 we will quickly hit the VAT threshold but I would prefer to avoid for now but if we just receive our commission separately it will make accounting a bit easier and save us time having to pass on payments.
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