In the world of ecommerce, everyone’s trying to find that easy way to make a buck. Unfortunately, most “easy” systems are not that lucrative if profitable at all.

DOBA is an “ebay certified” drop shipping company that makes claims to huge profits with no overhead costs. They offer this by utilizing an online interface to process orders and inventory, allowing you to “push” items to the marketplace. The upside is that you don’t have to carry stock personally in your warehouse; the downside is little to no profit margin.

Most of the items I’ve researched can be found on ebay or elsewhere on the web at approximately the same price as DOBA’s “wholesale” price. When I called to talk to them about this glitch, they said “We had a seller who sold our items last year and made $33,000 in sales.” This “success story” is also post on their site with a link to his ebay store. Upon closer investigation, this seller in the last 2 months has not even sold $500 of product in his ebay store, and what he has sold has yielded him about $50 “profit” compared to DOBA’s wholesale pricing.

Now, let’s take a look at the other fees associated with that “profit”.

1.) DOBA charges $50 a month for their service.
2.) Ebay charges $50 a month for the store service he is utilizing.
3.) Ebay’s seller fees and final sale fee’s range in the 8.5% range.
4.) Paypal’s fees (the most popular form of payment on ebay) are about 2%.

The result: at least $200 loss in the last 2 months.

He also may have another store somewhere on the web selling more products, but the fact is, if it doesn’t sell on ebay, it won’t sell anywhere. Ebay has become the market research staple for a new generation. Every time someone wants to compare a price for a product, the first place they look is ebay. This is due to the high level of competition occurring on ebay. People must settle for lower profit margins and higher turnover rates, or else someone else will.

What does this all add up to? Quite simply, the only way to make a real profit on the internet is to have a unique product or receive supply directly from the manufacturer. The only “turnkey” operation that I’ve seen success in is the Amazon affiliate program.

With the Amazon program, you set up a “niche” store using all the products from Amazon.com that fit your store’s theme. For instance, if you want a Star Wars store that sells only Star Wars memorabilia and such, you list all the items in that category into your storefront. When a sale is made through your store, Amazon processes the order, takes care of the shipping and customer service, and you receive 10% of the sale. Becoming an affiliate is free, and the only cost associated with this system is domain and web hosting, and generally some software to make it easy to set up. This is the only system other than direct sourcing that I’ve found to be a viable business model.

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