dropshippers - Locate Qualified Drop Shippers for Your Internet Business
Chris Malta and Robin Cowie
The Ups and Downs of Drop Shipping
For an ecommerce business, drop shipping presents several considerable advantages:
- There is no risky inventory investment.
- There are no storage or shipping issues.
- It lets you offer an extensive product lineup.
- It provides a model for testing out new products and identifying hot sellers (that you can then purchase in volume for higher margins).
That's not to imply that drop shipping is the end-all solution for all internet sellers. It poses certain limitations as well:
- Because the majority of the work falls on your wholesaler, the profit margins are notably thinner than if you were purchasing in volume. They are true wholesale prices, but they are wholesale prices on single items, rather than bulk lots.
- Since the supplier is handling the shipping, you have less control over that area of your customer relations. Any late deliveries or poorly packaged products will reflect badly on your business. For this reason, it's always a good idea to place a small test order with a drop shipper before listing their products on your website.
Identifying True Wholesalers
Finding legitimate wholesale drop shippers isn't easy. Many new online sellers begin looking in the worst possible place--the search engines. You will rarely find genuine wholesalers there. What you will find are a great number of middlemen and con artists, posing as true wholesale sources.
One way to find reliable sources is to attend tradeshows. The wholesalers and manufacturers you'll meet there have been vetted by a trade association. Not every vendor at a trade fair will be willing to drop ship, but many will; and you'll feel confident that they've been verified.
You can also check out industry publications.
Trade magazines are a good source for finding wholesale suppliers. Lastly, you can call the manufacturer of the product you're interested in selling. Ask them for a list of their factory-authorized wholesale suppliers. Then call the wholesalers on that list to see which ones are willing to drop ship.
Finding the Right Fit
Once you're certain you're talking to real suppliers, narrow your list to the companies you want to do business with. To decide if a drop shipper will be a good fit for your business, ask pertinent questions.
Early on in your conversation, ask if the supplier will work with your business. Many wholesalers aren't anxious to sell to online businesses. They operate on thin margins and make their money selling in volume. So naturally, they don't believe an online store will place any large orders on a consistent basis. Some also have sales territory agreements with their physical retailers that restrict their customer from selling across the internet.
Even if a wholesaler will work with online sellers, that doesn't always mean they'll work with eBay sellers. So if eBay is your primary sales venue, you need to ask up front if they'll sell to you. Sometimes, the manufacturers fear their merchandise will be devalued in the market if it sells for too little on eBay.
If you sell mainly on eBay, make sure your drop shipper permits their merchandise to be listed there.
Another important question to ask is whether the supplier offers single-item drop shipping--the critical word being "single-item." If a supplier sets a drop shipping quantity minimum--say five items--you're forced to require your own customers to purchase products at least five at a time. Find wholesalers who will drop ship individual items for you.
Also find out if the supplier has a minimum dollar amount requirement for drop shipping. Some drop shippers set a minimum dollar amount, known as a minimum ticket. To sell their items, you need to bundle them or simply steer clear of offering any of their individual products whose price points fall below their minimum ticket.
Lastly, ask if your supplier offers blind drop shipping. This means the supplier's name doesn't appear on your package invoices, inserts, or labels. The drop shipper may simply use a "fulfillment center" label or a blind PO Box, so your buyer never knows where their package arrives from. The point is that the drop shipper is invisible to your buyers, and your home based eBiz looks bigger than it actually is.
Finding and qualifying genuine wholesale drop shippers is a process that requires patience and a willingness to do the work. But the pay off is having those legitimate supplier relations that provide you with a steady, reliable source of products you can sell through your home business, at prices that let you make a profit. The bottom line is using drop shippers affords your eBiz tremendous benefits and supplies an excellent supplement to your other sourcing techniques.