Oh, no. If you are reading this, chances you have sold a product for a price that is lower than the price you need to pay for it or you sold a product that is currently out of stock. Actually, selling a product in loss or out of stock is something almost every successful dropshipping seller has to go through when running a dropshipping business.
The reasons for selling a product for a price lower than it's purchase cost or when it's out of stock are usually one of a few reasons: Either the order was not processed on time, the repricing of 60 minutes was too late, there was a technical issue with your store or there was a technical issue with the DSM Tool price monitor.
In this article we will go over the reasons for selling in loss, and what can you to to avoid those situations
After reading this article you will know:
- The reasons that can cause selling a product in loss or out of stock, and best practices for how to avoid it
- What to do if you sold a product that is now out of stock?
- DSM Tool refunds policy in a case of a sale in loss
- Reason #1: The order was not processed on time -
Reason #1: The order was not processed on time
Unlike the real world, in the inline world your store is open 24/7. If someone feels like ordering that item from you at 4 am your time, that means you will process the order only a few hours later.
At that time, the price for the product might already go up or the it went completely out of stock, and that would end up in selling it in loss or not being able to fulfil the order.
To spot cases of selling in loss due to this reason, first check the DSM Tool Status Page to see if there are any open incidents regarding the repricer. If there are none, check the current price of the product, if it is synced between all 3: your eBay store, DSM Tool and the website you source the product from. When all 3 are synced it is a strong indicator the issue is that the order was not processed on time.
There are some best practices you can use to avoid processing orders too late:
- Source products from websites that doesn't reprice a lot - Amazon and Walmart are websites were best sellers are changing prices rather quickly. The reason is that these are marketplaces, and many sellers try to sell the same item - so they keep reducing it's price. Try using "smaller" websites that aren't marketplaces or Chinese marketplaces that tend to change prices less frequently
- Turn on eBay sales notifications on your phone - On your mobile phone, download and install the eBay app from the app store. Then, login to your account, you should start getting sales notifications directly to your phone (with an awesome "chi-ching" sound to it!). That should help you get the orders processed faster
eBay app on Apple App Store | eBay app on Google Play store
- Use orders automation tools - The DSM Auto Paste will help you process orders faster, which will make it easier for you not to delay orders pending to be processed due to lack of time you suppose to spend on processing the orders.
- Hire a virtual assistant to help you process the orders - If you don't have the time to process the orders, or you want to focus on the store optimization and not the technical tasks, consider hiring a virtual assistant. You can post a message looking for an assistant in the DSM Tool Facebook group
Reason #2: A technical issue on your store
Sometimes the DSM Tool repricing algorithm recognizes a change of price or stock and then it tries to sync it to your store. If it fails to do that, then it is not possible for the DSM Tool software to protect you from selling in loss or selling a product that is out of stock.
The best indicator for technical issues in your store is a big red sign we've created to indicate repricing errors. The red sign appears at the top menu on every page in DSM Tool.
The way we've built the repricing errors alert is by mapping all of the errors that causes the DSM Tool Price Monitor not to update the price or stock on eBay, the problem is that there can still be unknown to us errors. eBay is changing all the time. therefore it is important to report such cases immediately to the DSM Tool technical support at the chat support on the bottom right corner of the website.
The best practices to avoid the potential of having this issue is to make sure you do not have an overdue payment in the eBay seller center, your business policies are in sync and that you take care of repricing errors as soon as they appear
Reason #3: The DSM Price Monitor synced the products too late
The Price Monitor scans the product page of the website you source your product from every 60 minutes. Sometimes, the price of the product changes between the sync cycles.
For example, if the price was synced last time at 1PM and it was $10, and you sold it on 1:55 PM for a lower price, only at 2 PM the price will get synced. This reason is a less common reason for selling in loss or selling products that are out of stock, but it happens.
The best indicator for a missed sync is when you sold a product only a few minutes ago (unlike selling it a few hours ago which is explained in the first reason in this article) and you see that now the price and stock are synced. That sould be a strong indicator that this is the case
Reason #4: The DSM Price Monitor had a glitch or an downtime
There is no software in the world that can guarantee a 100% sync between the websites you source the products from and eBay. This is not only known for eBay drop shipping, but also in other eCommerce activities. Sync issues happens from time to time.
You might be asking yourself how come we can't just develop a software that is stable all the time, you code it once and then that's is, if it was done right it should work. Let's compare the software to something else, like a car. When you buy a car, it would usually keep working. And yet, issues can be caused by many different parameters: the weather outside can affect the engine, wrong usage can cause malfunctions and even other drivers in the street can cause an accident.
In a complex software like DSM Tool we are depended on changes in eBay, Shopify, Google, Paypal, the 50+ websites we scan and many other services we've integrated to the platform. This is where things can sometimes go wrong and why our developers constantly repair and maintain the structure of the platform.
And yet, if an issue was caused due to the DSM Tool software malfunction, I want as one of the owners of the software company to apologize. I wish I could completely prevent all of those cases, but with so many websites, millions of products and over 100,000 drop shipping sellers that were using the platform until today (including you) that is a challenging mission.
I am up for the challenge, and I hope you are not giving up. Your willing to take in consideration that this is part of the business is KEY TO YOUR SUCCESS. I have personally spent my first new years eve after launching DSM Tool in 2017 sitting into the night to help our developer fix issues that came up the day before. (We only had one developer back then). You are on the journey of building a business, nothing in the world should be able to stop you.
- What to do to if I sold a product in loss or out of stock? -
Selling a product in loss or out of stock is something almost every successful seller has to go through when running a dropshipping business. This is also probably one of the most annoying things to deal with as a business owner because it could mean that you have to pay from your pocket to make sure your customers stay satisfied, which reduces your monthly income.
First rule: the customer comes first.
When you sell an item on eBay, you have the option to mark it as an item you can't fulfill. An automated message will cancel the order and notify your buyer that the order was cancelled. Since this causes frustration for the buyer, eBay will automatically reduce your seller performance rating. Even if you don't see a change in the seller dashboard, you might still see your products getting less views over the next days.
To solve it, back in 2016 sellers used to trick their buyers asking them to cancel the order on their side, which doesn't cause the same effect. eBay is particularly not satisfied with sellers who tries to trick their customers by saying to them that their "warehouse got on fire" or that the package "drowned in a flood in the warehouse". I have personally been to eBay's offices and was told that drop shipping sellers who uses these methods can get banned from selling on eBay.
So what can you do?
- Communicate with your buyer - First, announce to your buyer that you might not be able to fulfill his order, be honest and explain that your inventory management software didn't sync the price change or the quantity of the product which was out of stock and explain to them that the order might delay in a few days.
Offer them to cancel the order on their side (maybe in exchange of a coupon or $2-5 compensation as a Paypal transaction).
Some buyers will agree to cancel the order on their side, make sure that if they do that you do your best to help them. Try to find another eBay sellers that sells the product for a cheaper price, do any effort that you can to keep them happy. This is your business and your reputation on stake.
- Try to source the product from somewhere else - Take the product title and search it on Google, you might find it on other websites and be able to purchase and ship it to your buyer. You might find it in a lower price or at least in stock. You can also try to find a similar product to the product you are selling and offer that to the customer. If there are a few variations to the same products (different colors or sizes) you can offer another variant to the customer. Preferably the closest or the just-a-bit more expensive variant.
Second rule: be a successful businessmen.
If there is no other chance, process or cancel the order. If you can take the loss of a price chance (if it's not to high) do it, allow yourself to get frustrated for a while but make sure you move on as soon as possible. Successful businessmen don't get stuck on failures, no matter what caused them, they move on.
Saying that, just like your store reputation goes in front of you and affect your seller rating on eBay, so our software's reputation is highly important for us. If you do have a sell in loss, contact our chat support with as many details as possible about the case.
Add to your ticket the URL of the product on eBay and on the website you source the product from, screenshots of any potential issue you might have caught, especially if you have "Repricing errors" as explained above in this article, and if possible a calculation of how much you lost on the sale.
Please take in a count that a loss only happens when the price difference is higher than your profit margin, a sell in "less profit" is not a sell in loss, which we would most likely not help with.
What we will do then is review your case, and if possible try to send you some help in the form of a refund to your monthly payment. This is usually not the full amount that will cover your loss, since we have a vault we keep only for these refunds we have to spread it across the different cases that we get from time to time.
We are doing our best to help, and again, I am personally sorry if you had to go through such case and hope you will not give up and continue your journey towards success.