Will my credit effect my ability to be qualified by a top wholesale dvd supplier?

10 August 2007

Question: I have already been selling dvds, cd, and books on ebay this summer and have reached silver level powerseller status as of last month after just starting in May. I bought your information becasue I am basically using another retail site as my supplier. They are not really a dropshipper. I have been using them as one though.

I have run into a snag with the big suppliers you have recomended. They want to do a credit check in order to qualify for the "direct to consumer" method of internet sales. For example, ***EDITED*** requires an open credit line of $25,000.00 to do "direct to customer' fullfillment. To be honest, there is no way I will qualify for that. I have been laid off from a job in the past that seriously affected my ability to keep up and my credit rating was damaged. Just recently I had surgery and was on short tern disability and am currently a tad behind. Now I have a good job and can catch up quickly, however, with my initial success on ebay i was hoping and dreaming to corner more of the market that I am in. My store is very small (300+ items) yet I am being very successful.

My question to you is this. What options do people in my situation have in order to have the opportunity to be as successful as I know I can be in this industry? I'm gonna go forward with ***EDITED*** to see what they say. I do know it will not be good. I know they have other options of payment that would entail them sending the product to me and then me forwarding on to my customer. I want to avoid that. That delays the process and customer service is one place I have an edge so far on ebay. I look forward to hearing any suggestions you may have. Thank you for your time.

Congrats on your success so far. It sounds like you are on the right path.

I have never drop shipped a single dvd that I have sold. Basically, if I don't have it in my possession, I don't list it. Customer service is important to me to. I don't want to take the chance that a title I sell is going to be out of stock when it is time to ship to the customer. Sure you can always check inventory levels before listing, but consider the following scenario.

You check with your supplier and feel comfortable listing a time that they have 1,000 of in stock. You list your item on a 7 day auction. Even if your auction ends successfully, not everyone is a fast payer. What happens when it takes your buyer a full 10 days to pay? Regardless of your terms, ebay allows buyers 10 days to make payment. In this case, 17 days have passed from the time you checked the inventory level to the time you are ready to drop ship your product. Are you confident your supplier is still going to have the title in stock? I wouldn't be.

With that said, it seems what you are doing is working well for you. If you can stick to your current model, then go for it. I don't have any magic words to convenience someone to approve you for $25,000 of credit. But maybe you can come up with some arrangement with the dvd supplier.

If you can't, you still have two options you can consider.

1. You already have some sales under your belt and have a good feel for titles. You can continue to use the supplier you are currently using to drop ship the bulk of your orders, and then use the top supplier on my list to order the titles you know are going to be good sellers. This will allow to establish a relationship with this supplier and maybe in 3 - 6 months you can ask them to reconsider a drop shipping arrangement.

2. You can use your knowledge of titles to order all your titles in advance. This is the method I use and recommend for most people. However, if drop shipping is working for you, then that would be my first choice.

Good Luck,

Brent Crouch

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  1. wholesaler…

    Very informative. Keep them coming….

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