My Dropship Business Disaster: From 2K a Day to Damage Control!
Building a dropship business is all the rage these days.
Seriously. Everybody and they mama’ wants to make money dropshipping these days.
Because it’s a damn good business model, especially when starting to build online income streams.
Hell, I’ve tried my hand at dropshipping a couple of times, too. Even have a new venture using the model that’s starting to gain steam.
But this post isn’t about that.
This is about one of my dropship business attempts that was incredibly successful.
Until it wasn’t.
So, here’s what happened.
How I nearly lost $10,000+ USD in one fell swoop…
The money was flowing in. Like crazy.
I’m talking 2K revenue a day. $400-500 a day in pure profits.
And I wasn’t even running ads. No Instagram shoutouts. No Facebook ads.
Just slangin’ products on eBay for fun and profit.
Let’s just say I wasn’t following the advice of my buddy James Holt, aka the dropshipping guru around these parts.
P.S: If you’re new to dropshipping, you should follow his advice. Trust me. Click here to learn more!
Now, before we go any further, here’s something you should know…
Everything on eBay is “fake” – quote unquote.
Even the stuff that people claim is “authentic” is not.
It’s fake. Damn near 100% of the time.
Which is where the money is.
You can buy fake NBA jerseys from China for $8 USD and sell them for $40.
Same goes for G-Shock Watches, Yeezy Boosts, and Supreme Streetwear.
Insane profits – if you’re willing to “fudge” about the authenticity of your items.
…But I wasn’t willing to lie wholeheartedly to customers.
So, I told them my products were fake without spelling it out.
“This stuff is from China. It ships from China. You should understand what that means.”
Blah. Blah. And blah.
Anyone with a fifth-grade reading level knew my products were fake.
But many people didn’t care. Most people just want a good deal when shopping on eBay and my products were 65-70% off the retail price.
And selling like hotcakes!
My Dropship Business Disaster
So I’m moving products for like three straight weeks. My feedback is going up.
I’m making more and more money each day.
I start to think about hiring a VA. I’m making plans to scale this business to the moon.
Then I wake up one morning to an email from eBay…
I’m half awake, but I knew this can’t be good.
I pop out of bed and whip open my eBay account.
All my listings are gone.
All my orders are gone.
Even orders that had shipped already…
I log into PayPal to see what money I had left.
And there are two dozen pending transactions from people who want refunds because eBay deleted their purchase and didn’t refund their money.
My cortisol went through the roof. I’m stressed as can be.
My predicament was an online business nightmare:
- 70+ orders shipped in the last 48 hours.
- Over $7,000 in merchandise on its way from China
- ZERO order history on eBay
- Dozens of pissed off customers on PayPal
Sounds like a good time, right?
The worst part was that without the eBay transaction numbers and all that jazz…
I didn’t have a leg to stand on with PayPal.
If the customer was going to be an arsehole, there was no way PayPal wouldn’t have immediately sent their money back.
I called eBay support. Begged to get my transactions back.
Once eBay deletes listings for trademark issues, those things are gone for good.
Deleted from the system. From memory.
I was fooked. Excuse my French.
…But I had to get in touch with my buyers.
I had to find a way to let people know their tracking numbers and ensure they didn’t ask for a refund.
I had to avoid a dropship business disaster.
Luckily, you can find email addresses and eBay usernames on PayPal transactions.
So, I go through each transaction manually. One by one.
I open up my Chinese supplier portal and manually copy tracking numbers. Then I send emails from a burner account to the email address from PayPal.
And finally, I search by username on eBay and send messages on the platform.
It took me two full work days to do this. Finding emails, eBay usernames, and tracking information from China.
A huge pain in the arse. Straight busy work.
But I do it.
I contact each of the 70+ customers by email and on eBay. Because I have to make sure they have their tracking number. I need to ensure they have confidence their order will arrive…
Even though eBay deleted it. If they don’t, I’m out nearly $150 USD per customer.
Because if I had to refund a customer, I lose their money – which is over $100 USD per transaction. Plus, the cost of the product I shipped from China and shipping.
Luckily, my diligence paid off.
Only 5 customers demanded their money back.
All the other customers were understanding of the situation. Most just wanted to get their hands on the product – no matter what eBay said.
So, I ate around $750 USD in refunds. Painful, but not the end of the world by any means.
Not a massive dropship business disaster. Not nearly as bad as things could have been…
Aka losing five-figures because every customer wants their money back.
Which brings me to the point of this here article.
Dropshipping is one hell of an online business model. E-commerce is here to stay.
You can make a damn good income with the model.
But you need to do things right.
You need to build a scalable business properly. Not some fly-by-night eBay operation selling fake shit on the interwebs.
I’m already back in the dropshipping game. Well, private labeling. But that’s beside the point.
And how am I doing things now?
I’m using the methods he teaches in his course to set up my e-commerce business properly and build something scalable.
Something that will last.
And it’s working.
If you’re ready to start making money online with dropshipping, I suggest you do the same.
Don’t make the same dropshipping mistakes I did. Don’t risk losing five-figures because eBay tried to screw you over.
Do things right from the jump.
Learn how to build a real dropship business by following James’ advice.
Point. Blank. Period.