Drop Shipping Jewelry
- A Cautionary Tale

© by Aaron Rome; all rights reserved

Topaz and silver ring
(Wholesale Gem Shop)

People always ask whether I offer drop shipping of my wholesale silver jewelry.

The simple answer is "NO!".

But because there is so much interest in this topic, I want to offer a bit of dialogue that I hope will be useful for anyone who's considering drop shipping jewelry as a sales-strategy.

Here's how a drop shipping arrangement works:

1. A retailer markets a product to customers.


2. When a customer buys the product, the retailer collects the full retail price from the customer.


3. Then the retailer submits the customer's order and shipping info to a larger merchant or a "fulfillment facility" where the products are stored. The retailer also pays the fulfillment facility wholesale prices for the products ordered.


4. The fulfillment facility then packages and ships the product order directly to the customer.


5. The retailer never actually sees or handles the product, and makes a profit by charging the customer retail prices while paying the fulfillment facility wholesale prices.

Abalone and silver pendant
from Wholesale Gem Shop

As a participant in dropshipping, your role is basically to market a product whose authenticity and quality you cannot verify, to a customer you do not know.

And the bonus: You have no control over the order fulfillment process.

Hmmm... how many things can go wrong here?! This approach to sales is clearly not in the best interest of the consumer and therefore, I posit, cannot be one on which a sustainable business model is built.

This is a TRUE story with a fake name.

Last year a customer of mine, to whom I sold wholesale jewelry, decided to expand her eBay business with a drop shipper.

She quickly started grossing something like $50,000 per week for a couple months!

But she was now broke. What happened?

It turns out the drop shipper was not as credible as Sandra believed. Everything was great for a few weeks, and then the calls started coming in.

Customer after customer called with complaints, including: "I ordered 3 phones and only got 1!", "My phone is broken!", "Where is my phone - it's been 2 weeks since I paid!".

And like a good e-commerce citizen, she refunded all the distraught customers' purchases and had them return the phones to the drop shipper -even though she had already sent most of the payment to the drop shipper. She only got to keep $5 per phone.

Guess what happened next? The drop shipper stopped returning her calls. So now Sandra has no phones (not even broken ones), no money - in fact, she lost money since she refunded customers' money she did not have!

You could argue that the drop shipper was the responsible party here, but in the eyes of the customer, and probably the law, Sandra was responsible to those customers as the re-seller.

100% RISK = SANDRA, 0% RISK = DROPSHIPPER.

Not exactly a formula for success. The drop shipper really has nothing to lose, and if he has a lot of merchandise and other customers, he has no incentive to make sure the end-customer is happy.

I forgot to mention, Sandra's PayPal account was suspended and she was unable to pursue her main business for quite some time.

Drop shipping sounds like a great, low-overhead, minimal work, no money down kind of thing.

But in this case the old adage holds: "If it sounds too good to be true, it probably is".

Think I'm making this up to promote my business? Just search Google for "beware of drop shippers" or "drop shipping scam".

So what are the other options?

Take your time and start your business the right way. Identify a good wholesale jewelry supplier or suppliers for the jewelry or other products you want to sell, get to know them, and quality-test their products before making any large investments.

And the most important thing about online sales is to develop a good marketing strategy that may involve search engine and website optimization, pay per click advertising, registering in free directories, email lists, etc.

Aaron Rome and family

Author Aaron Rome is the successful owner / operator of Wholesale Gem Shop, and does NOT offer drop shipping.

Aaron says, "Our specialty is helping small business owners, and individuals who would like a small business, to get started.

Individuals following this model sell jewelry to friends and family at work or through at-home jewelry parties, go to festivals and craft-shows or sell on a website or auction site such as eBay.

We have several thousand customers the world-over.

I don't believe in gimmicks, and I treat every customer with respect because everyone has the potential to achieve their goals."

Also check out Aaron's blog - it's interesting and well-written, and often has useful information you can apply to any jewelry business.