Valor Talk

A $5.00 drop-ship fee?  Ben!  How can I continue to offer your drop-ship items to my customers with a fee like that?  If the fee were $2.00, I could work around it, but at $5.00, it makes my sales nearly impossible!  I'm a pure drop-shipper.  I carry no stock locally.  I offer nearly all of your products on my website.  When Joe Customer orders a maglite or a pocket knife from me, they do so because I offer them the cheapest price.  If you tack $5.00 onto every single drop-ship item that I sell (single item orders), then this is going to ruin my entire business model!

I would be more than happy to pay a $2.00 drop-ship fee, but $5.00, I may not be able to live with.
 

I'm not sure how Valor managed to keep their no fee policy for as long as they did. Their new policies, while not really welcome, are totally understandable and not unexpected.

I understand it's not going to be good for your business model as you do business now, but unfortunately, not doing it is not good for ours.

 As it stands, we already charge a $4.95 fee for any order under $9.95, which many customers have managed just fine.  If that can be managed, any order above that should be able to manage a $5 fee.  Obviously, the larger the order, the easier it is to swallow. 

 There's an easy way around it all.  Order your best selling, small $ items and ship them yourself.  If you order $500, we pay the freight.  If you ship it yourself, you save the $5 per order.  With $500 worth of product, that should be at least 50 $10 orders, 50 x $5, that's at least $250 you can save by stocking your own items.

I'll be gone the next two days..  But I'll check back when I can.

It's not just about managing to swallow the $5.00 fee...I can manage, but it eats terribly into my profit margin on $15-$30 orders which account for about 80% of what I sell.  So, now I will have to raise prices or institute a $20.00 minimum order which will equate to fewer sales.  Sorry, but this just hits me at a bad time...Christmas this year was the best time that my business has seen since its inception and things have rolled along nicely into January, then Bam!  New fees.

I've been working very hard to bring my business into being with very little operating capital (because I have none!).  Just as my business began to show signs of growth...*sigh*...it hurts.

OK, I'm done venting.  I'm off to decide how to best handle this for my business and my customers.

Thanks for everything you do, Ben.  You guys are a class act.  Do me a favor and give Roberta a pat on the back for me.  She has helped me out on several occasions over the last month or so.
 

My prediction regarding this whole change is that a few people who live near Valor's warehouse will now own the online market for their products. 

Think about it : They can still operate with no inventory because Valor will be offering new API tools for running an online site.  They can pick-up at Valor's warehouse every couple of days (seriously, a $50 minimum order for pickup is nothing. That's like 3-4 Zippo lighters).  Orders will actually ship out more quickly than if Valor did it, because there has been a 2-3 business day lag on dropships for a while now.

Sounds like a huge opportunity if anyone has the flexibility to relocate to Florida.

 For everyone else, it's going to be tough.  Most customers are small 1-2 item customers, and a $5 fee means you'll absolutely have to institute an order minimum.  Carrying the inventory yourself will add a whole bunch of costs that someone who lives near valor won't have to deal with.  You'll be competing with them, and you will lose.

While I agree that the new policies will weed out many sellers, it won't be the end of the world for everyone. We've been selling on the web for around 10 years and until we ran into Valor, we always stocked everything we sold. For a while we depended on Valor's drop shipping for some of the more expensive items, but when the shipping times consistently became two to three days, we went back to stocking those items for the most part.

Of course, this limits the number of products we sell, but it also means we can be totally knowledgeable about every item we sell. It also means that we can guarantee shipping times and whether or not an item is in stock. If someone has a question that requires us to physically examine the product, we can do that. In short, being a stocking dealer rather than attempting to sell everything that Valor offers via drop shipping gives us a big edge in terms of customer service. That still counts for something.

However, for those sellers who continue to use the drop ship service, the one silver lining will probably be that the two to three day shipping time will be reduced. I have always contended that the small drop ship orders were bogging down Valor's shipping department and if the new policies reduce the number of those orders, all orders should ship more quickly. This is good news for everyone. If this happens, it will allow us to stock a smaller quantity of the more expensive items since we can absorb the $5.00 fee on those items and take advantage of the drop ship program.

The worst change that Valor is making is actually the surcharge for credit cards. Presenting it as a cash discount keeps them out of hot water with the credit card companies, but out of the dozen or so suppliers we regularly use, Valor will be one of only two who have this policy. The free shipping on $500 orders will help offset it, but it is still kind of cheesy.

Bottom line is that for many sellers, the policy of putting all of one's eggs in a single basket will indeed prove to be a bad idea. 

You hit the nail on the head with the shipping speeding up.  Our biggest problem is small orders from customers that come and go over the course of a month.  Especially during the holidays.  I've been told that our warehouse must not be efficient enough for drop shipping.  That's true.  Drop shipping is not our main business, nor do we want it to be.  We sell to stores, large stocking orders.

 I saw a comment on the blog that said we should make the fee based on the amount of the order.  They are missing the point.  If we are going to drop ship an item under $10, we are going to chrage a premium.  We don't want to drop ship that item.  You may think that's crazy, but as I have said before, we are not in the drop shipping business.  Some people find us on the web and think that's all we do.  We've been in business since the '60s and added drop shipping about 5 years ago and it snowballed into a monster that has probably hurt our regular business.  So please don't think I don't know these fees are on the high side, I do.

Basically if you are going to drop ship one item, you're going to pay full price, all fees.  You want to avoid it?  Stock some items, buy in quantity, and take advantage of the freight program.  From Valor's point of view, we'd rather ship you 1 $1,000 order over 100 $10 orders.

 I realize nobody is going to be happy about this, but if you put your head to it and are willing to put some money into it, like some of you already do, then you may end up better off then you were before.  But if you're a pure drop shipper and not willing to put any money into stocking anything, then you just prove the perception that most stocking dealers and manufacturers already have of drop shippers.

 The truth is for every drop shipper that is serious about his or her business, there are 50 or 100 that bought a book and think hey're going to get rich. (for the record, I recognize most of you that have posted here and I realize you are serious businesses, not fly by night drop shippers) If you want to be in business, you should be getting the best deal you can.  Stocking items is the best deal you can get.  At least from us.  And I'd be willing to bet from anybody else too.

 And to say that somebody that is near Valor and can pick up orders is going to take over the business online is far fetched.  Why is that any different now than it has been all along.  If they are picking up orders and shipping them themselves, then they are taking the time to grow their business and put work and money into it.  They're not a drop shipper.  Anybody doing that for the last five years would have an advantage over any drop shipper or dealer for that matter.

After reading more of the comments/insults in my email.  I have decided that the people that will benefit from this change are the ones who work with it and go forward.  There are so many drop shippers out there, none of which have posted in the forums yet, that are dropping our items because they can't work with the fees means that those of you that work through it will probably benifit.

This was not the plan, but I think it's going to help quite a bit.  Most of the complaints I am getting are from people that are lowballing our products any way.

Ben:

Most of the complaints I am getting are from people that are lowballing our products any way.

No big surprise there. If all you do to fill an order is take a few minutes to complete a form on the Valor site, you can easily afford  to lowball everything. With Valor's low shipping fees, most drop shippers were probably even making money on what they were charging to ship. When faced with stocking items and paying for inbound shipping, buying packing materials, printing invoices, packing the boxes, etc., lowballing is not nearly as profitable. It also means it is more difficult to run a business in your spare time.

I agree that in the long run many of us will actually benefit from the policy changes. 

Ben:

You hit the nail on the head with the shipping speeding up.  Our biggest problem is small orders from customers that come and go over the course of a month.  Especially during the holidays.  I've been told that our warehouse must not be efficient enough for drop shipping.  That's true.  Drop shipping is not our main business, nor do we want it to be.  We sell to stores, large stocking orders.

 I saw a comment on the blog that said we should make the fee based on the amount of the order.  They are missing the point.  If we are going to drop ship an item under $10, we are going to chrage a premium.  We don't want to drop ship that item.  You may think that's crazy, but as I have said before, we are not in the drop shipping business.  Some people find us on the web and think that's all we do.  We've been in business since the '60s and added drop shipping about 5 years ago and it snowballed into a monster that has probably hurt our regular business.  So please don't think I don't know these fees are on the high side, I do.

But if you're a pure drop shipper and not willing to put any money into stocking anything, then you just prove the perception that most stocking dealers and manufacturers already have of drop shippers.

 The truth is for every drop shipper that is serious about his or her business, there are 50 or 100 that bought a book and think hey're going to get rich. (for the record, I recognize most of you that have posted here and I realize you are serious businesses, not fly by night drop shippers) If you want to be in business, you should be getting the best deal you can.  Stocking items is the best deal you can get.  At least from us.  And I'd be willing to bet from anybody else too.

Since you're "not in the drop ship business" you might want to take that HUGE A%%ed red "WE DROPSHIP" animation down from your front page and quit advertising with companies that solicit business from drop shippers.

Quit your P'ing, Moaning and dissin' on your customers that just signed up for what you advertised...and start advertising what you actually DO!

Oh, and by the way, there are a BUTT LOAD of companies who serve both Wholesale Bulk orders and small Drop Ship orders fast and efficiently.

I couldn't care less about how LONG you've been in business, or how HUGE your REAL customers are, or your business model, fees etc...but it CHAPS my BUTT to see somebody CRAP all over their customers calling them inconvenient etc. when the only thing they're doing wrong is ordering from you in a way that YOU set up in the FIRST PLACE. Oh GOD FORGIVE them for CLOGGING your BLESSED system.

Your forums and hearing your constant excuses are what kept me from trusting you with any dropship orders to begin with.

I wouldn't want to inconvenience you.

Remember when you dis back, that I'm not complaining about your new fees. I'm pointing out that you are advertising exactly what you hate...then getting mad at them for "reading a book" and placing an order with you. Then you get offended when somebody doesn't think your a HUGE company working with "HUGER" clients than they.

Shocking way to do business to say the least!
 

obd123:

Oh, and by the way, there are a BUTT LOAD of companies who serve both Wholesale Bulk orders and small Drop Ship orders fast and efficiently.

A butt load? Name three.

I don't see where I was "crapping" all over my customers or where I called them inconvenient.  If you, or anybody else took it that way, I apologize. 

We will continue to drop ship and continue to advertise it.  With the fee in placve, we will be able to make the changes necesarry to be more efficient shipping them.

After reading some of the above posts I feel quite angelic in comparison. As an international customer I will have to swallow the new $500 minimum fee if I want to continue working with Valor, but I must admit to not being entirely sure why an international package should be that much more difficult to process.

I enjoy working with Valor. The people I have spoken to, Jorge, Rebecca and one or two others have always been courteous and helpful but it still does not stop me feeling like a second class citizen occasionally...and I NEVER dropship.

Phil

Phil:

After reading some of the above posts I feel quite angelic in comparison. As an international customer I will have to swallow the new $500 minimum fee if I want to continue working with Valor, but I must admit to not being entirely sure why an international package should be that much more difficult to process.

While several of the distributors we deal with don't offer international shipping at all, the ones who do all require a minimum order and $500 is common. Valor is really just coming in line with the industry standard.

Shade:

obd123:

Oh, and by the way, there are a BUTT LOAD of companies who serve both Wholesale Bulk orders and small Drop Ship orders fast and efficiently.

A butt load? Name three.

I can name 5 off the top of my head, but I don't want to give away my sources (seriously).  Let's just say that 1 sells NASCAR clocks, 1 sells almost identical inventory to Valor, 2 sell hobby supplies, and 1 sells Zippos (and they stock the full line).

Ben,

My point is that people who live near valor's warehouse will now be able to continue to offer Valor's full line without stocking any inventory, because they can still sell the stuff before they buy it.  Just keep the entire database up and go to valor every few days to pick the stuff up after it sells.

So, the lowballing problem will not be fixed, it will just be shifted toward websites based closer to valor's warehouse.

Look, I don't have a dog in this fight, because I really only use valor for an occasional dropship, and I have several other sources that do the same thing.  I'm just pointing out the obvious loophole in the system that will allow some customers to continue an inventory-free online presence while others will not.

 Chris