How to Find Dropshipping Suppliers?
Even though not all kinds of eCommerce businesses are cut out from dropshipping, it’s still one of the most projecting eCommerce business models in 2019. Dropshipping has come out as a lucrative way to start an eCommerce business, especially with lower start-up capital.
Selecting a supplier is a judicious step that can either make or break your business. The quality of your eCommerce business relies on the quality of services your dropshipping providers offer. Even if you know the best products for dropshipping, several other factors should be considered for selecting the best dropshipping suppliers as per your business plan.
This article is a piece of professional advice for your cause where you can learn about how to find dropshipping suppliers fitting right into your business goals. We will not only cover the expert advice but also a brief on fundamental concepts of dropshipping providers, wholesalers, and manufacturers. Having done that, we will also cover crucial red flags to avoid dropshipping scams while also looking out for genuine drop shipping suppliers in the market.
Dropshipping suppliers, Wholesalers, and Manufactures
We know most of you must be already aware of these concepts, but it’s better to cover the difference between Dropshipping suppliers, Wholesalers, and Manufactures for our readers who might have just started with this lucrative business model. These are some of the most confusing terms; at least they were to me when I first started working with dropshipping businesses years ago. So here we go:
|A business or an individual who supplies dropshipping services to other businesses.||A business or an individual who resells products to other merchants or retailers.||A business or individual who actually produces the products.|
|Sends products directly to the consumers on behalf of its client business.||Maintains inventory of products in bulk acquired directly from the manufacturers.||Produces a single or multiple kinds of products.|
|Offers supplies while also taking care of order packaging, shipping, and sometimes inventory storage.||Mediator between manufactures and the businesses who sell products to the consumers.||Can operate from multiple locations.|
Note: These three business activities are different from one another. However, their operations may not be limited to just one of these categories. A business can operate as either one of these, or can also offer all these services combined. For example, manufacturers and wholesalers can also operate as dropshipping suppliers by simply offering all those additional supply chain and order fulfillment services.
How to avoid Dropshipping scams?
The challenge is not just avoiding dropshipping scams but also keeping away from incompetent suppliers. You will find hundreds of businesses that claim to be dropshipping providers, but not all are ideal for your business. Many of them are not even suppliers but scammers or mere retailers who pose as suppliers and ho victimize inexperienced entrepreneurs.
So how to get suppliers for dropshipping in such a case? It’s a progressive practice and requires lots of cautions; not just for choosing a genuine dropshipping supplier but also a proficient business. The key to the dropshipping business is supply-chain, and choosing a wrong B2B partner is an easier way to stall your orders and upset your customers. You should look for the following signs to avoid falling prey to drop shipping scams.
1. Poor products quality
Customers appreciate high-quality products and they tend to be loyal to such businesses. You must ask the supplier to provide samples of the products and check their quality. Suppliers refusing to do so should be avoided at any cost.
2. Negative and Suspicious reviews
Don’t look for reviews on their official websites. No supplier will ever admit being bad at their business. Instead, look for reviews on independent websites where different retailer provide honest reviews and critiques of their supply chain partners.
3. Unclear contact information
Any legitimate business, even if operating in the online mode only will not hesitate to share their physical contact address. Avoid suppliers who do not provide clear contact and address details.
4. Selling directly to the consumers
A legitimate supplier does not sell directly to the consumers, neither do they reveal individual product prices in the public. Any supplier offering products directly to the consumers at “wholesale price” are just retailers selling at extravagant prices.
5. Charging an ongoing extra fee
Genuine suppliers and wholesalers do not charge any subscription or an ongoing nominal fee for just doing the business with them. If any supplier asks for membership fee above the regular shares, it’s more likely to be a scam.
Note: Please note that genuine supplier directories charge an ongoing membership fee, which is fine. Do not confuse them with suppliers. Such premium directories are legitimate.
How to identify genuine suppliers for dropshipping?
I have discussed most of the ways to find legitimate drop shipping suppliers in the previous section itself. However, there are still a few signs you must care if you have just started with your research.
1. Formal application and contract process
Legitimate businesses generally have an application process and they don’t work without getting into a legal contract. They will ask to apply for incorporation and approve the deal after a formal contract is signed.
2. They ask for minimum order size
Suppliers sell to the businesses. They expect orders in bulk. For that, they have a minimum order-size, especially when you just have started working with them. Suppliers willing to fulfill small orders are not dedicated.
3. They have dedicated support services
It’s one of the prominent ways to identify a genuine supplier. They offer top-notch dedicated support to all of their client businesses. They have representatives who guide you throughout the process and offer all necessary to get on with the deal. You can judge a supplier by the quality of the support and the niched knowledge possessed by the representative.
4. They don’t go out of the way to collaborate
No genuine supplier will go out of the way to take your orders. Only middlemen wholesales go over the top to get orders. Suppliers generally have specified policies, which are the same for every other customer and they don’t change them for just a single order.
How to find competent dropshipping suppliers?
Even after a supplier possesses all the traits of being genuine, the business might still lack the efficiency to support your business for the long term. So to ensure if the selected genuine supplier is also competent, check for the following traits:
1. Investment in technologies
While lagging in technology is not a deal-breaker, but it’s better if the supplier is up-to-date with the latest technologies. Cutting-edge implementations like APIs for real-time inventory, ready-to-use online catalogs, live-chat, affiliate programs, etc. can be extremely useful to your dropshipping business.
2. Orders via email
In case the supplier lags real-time inventory and other automation APIs, email is a perfect way to make bulk orders. Having to call-in every order or placing them manually would be a major issue once your site gets big. So, it’s crucial to know beforehand that your supplier also supports orders via email.
3. Offer net terms payments
Net terms is a B2B payment model where the supplier gives at least 30 days to the retailer to pay for the fulfilled orders. While many businesses follow the pre-order fee model, many offer ‘Net Terms’ payments. This is a legal contract where retailer promises to pay to the supplier in net 30 terms from the date of purchase, usually through a check or bank draw.
4. Centrally located
If you are operating in a huge geographical location, it’s wise to select a dropshipping supplier functioning from a central geo-location. In this way, the supplier can consistently fulfill the orders faster and you can save a lot of shipping fee. While it’s not always possible, but if you get an option, it’s better to select a centrally located supplier.
Tips before approaching dropshipping suppliers
Now that you know all the traits to identify genuine business and scammers, there are few things you must know before you can proceed to businesses for collaboration. They are like pre-requisites to possess.
1. Get registered and legal
Genuine suppliers only work with serious and genuine retailers. Most of them reveal prices to legal retailers only. Getting yourself registered and legally compliant is a working way to establish a sense of trust by the suppliers. You must prove that you are a well-organized and this B2B collaboration can bring value to them.
2. Don’t ask them to go out of the way
Suppliers get loads of requests for collaboration. Especially when a supplier is also the manufacturer, they would never risk a stain on their brand because of a poorly organized retailer. Always stay professional in your proposition and never ask them to go out of the way to provide any unethical favor.
3. Don’t hesitate to talk on the phone
We can understand that not everyone is good with phone calls. However, when it comes to a serious collaboration like dropshipping, many suppliers will want to talk personally before going any further. Don’t hesitate to make or receive phone calls to crack the deal. Suppliers are accustomed to phone calls and you would find them quite friendly to your questions.
4. Work with multiple suppliers
When a business relies on a third-party inventory, sticking to a single supplier could be a risky approach. You might want to collaborate with multiple suppliers to have more products in the catalog and more business relations to cherish. In this way, you can maintain a constant stream of supply without failing to fulfill any order.
Where to find suppliers for an online store?
Once you are ready with the groundwork, it’s time to approach suppliers with your proposals. Here are some spaces to find good dropshipping suppliers for your online store:
1. Membership of aggregators
Aggregators are also called as dropshipping supplier directories. These online platforms are like marketplaces of suppliers and wholesalers who have joined to be found by serious retailers. You would have to purchase a membership to access these platforms. While directories are not the only way to find suppliers, they are indeed the easiest. For example, Doba, SaleHoo, and AliExpress.
2. Reach out to manufacturers
This approach works best when you have already decided on the products you want to sell. You can contact the manufacturers of your selected products and ask them to share the list of their wholesalers and distributors. Once you have the list, you can approach them to inquire if they provide dropping services.
3. Follow your competitors
Stalking your competitors is an easy and working way to track the best dropshipping suppliers in your market. If your competitor is selling the same products as you, then you can make a small order with your competitor. When the package arrives you can back-track the return address to find the original supplier. While it’s not a very reliable way, it sometimes works best when you can’t find suppliers at all.
4. Attend a Trade Show
It’s an expensive way and requires some good capital to attend a trade show. These events are attended by top businesses, retailers, wholesalers, and suppliers. While it’s tough for a new entrant to impress the giants, a well-presented proposal might end you up with a great deal. You should give this method a try if you have the time and money to attend.
E-Commerce is a massively competitive arena. Even when you don’t maintain an inventory and ask best dropshipping suppliers to fulfill the orders, it’s not that easy to operate successfully. One wrong decision and the entire eCommerce business goes into jeopardy. Hopefully, this article was able to make things easier for your dropshipping startup. We tried to be as simple as it can be so that this guide could help the beginners in the easiest way possible. We hope you find an ideal company to facilitate your supply chain. Cheers!