I received an email from Maureen the other day concerning etailing. Maureen has three storefronts on the Web, but she is frustrated because she has trouble finding vendors that will sell to her at true wholesale and also offer to drop ship. Here's my response:
First of all, I don't have a lot of personal experience with e-tailing using drop shipping. But I'm the first to recognize that it's a direction we've already taken in today's e-world.
There are problems, however, with this channel. Right at the top is pricing. To buy something at wholesale, sell it at on-line at retail, and have the vendor ship it to the consumer, is a dramatic departure from the way we have done business in this industry. The traditional channel has brick and mortar retailers buying from vendors at wholesale, paying shipping and using a 100% markup to price items at retail.
To complicate matters further, you have vendors that want to have their cake and eat it, too. In today's world of the Web, many vendors have websites that are retail; therefore, they are competing with you as an e-tailer and have little incentive to sell to you. Meanwhile, they are also desperately trying to keep their brick and mortar wholesale business. As a result, they can easily end up confusing and infuriating store owners who pay rent, pay employees, etc. And I'm sure their sales reps aren't happy to have you competing with their store accounts.
I feel the solution, if there is one, has to come from the vendors. Maybe, after I post this to my blog, and you find out more when you attend the New York show in January, we'll have a better handle on this way of doing business.