When it comes to the success of your online business, finding good suppliers or dropshippers to work with is at least half the battle. This article will help you understand how to find a good company while avoiding the bad ones - including the scams and the middlemen.
Drop shipping can be a great way to jump start your online business. The right drop shiper can help your profits grow tremendously.
Once you find a good company, everything becomes easy. A bad company, however, can lead to some major headaches. Do your research - it will definitely pay off.
There are several good ways to research drop shippers. I have included the most common ways. I have saved the best for last, so make sure you read all the way to the bottom.
Again, I cannot stress this enough - When looking for a good dropshipper, you really need to do your research.
A good place to start is by going to your local library. You may be able to ask a reference librarian to help direct you to information on manufacturers and wholesalers who will dropship. Reference librarians are often good at helping to point you in the right direction. Many libraries carry books that list who manufacturers what products. You may also be able to find useful information in magazines.
You will most likely come across many small time manufacturers who are good candidates to work with. Of course, you will then need to call these manufacturers to work out a drop shipping arrangement. Some of these manufacturers will work and many will not. This research method can take some time, but the rewards are definitely worth it. There are other, more efficient ways of doing your research though. Also, this method does not guarantee that the suppliers you find will be reputable or that you will be able to establish a business relationship.
You need to make sure that you are dealing with a reputable company. Once you find a company that looks promising, you can test their ability to deliver by ordering one item to be sent to you (or a family member or friend). This way, you can test how fast their shipping is and you can see what information they include on and in the packages. This is important because you don't want your customers to find out who your supplier is and you certainly don't want them ordering directly from your supplier and cutting you out of the equation.
You can also buy lists that contain drop ship sources. The problem with this is that most lists out there are outdated and filled with junk companies.
You will most likely have to sift through a lot of junk to find a few companies that are really worth dealing with. Who knows, you may sift through a lot of junk and still not find any good companies. As you can see, these lists can be a waste of your valuable time. I have been able to find a few good suppliers with these lists after many hours of research, so I do know that it can be done. However, I would not recommend it, unless you have a lot of time on your hands.
Searching through lists and going to the library can be time consuming methods and often only lead you to small manufacturers and small distributors.
Often, major manufacturers and distributors will not do drop shipping for a small time seller. This is because these companies are set up to sell in large quantities and it is not worth their time to drop ship items individually for the small time seller. They are in the business of moving large amounts of inventory and they like to do it by the pallot, not by individual product.
This is where it often makes sense to join a wholesale drop shipping club. These organizations are able to leverage the combined purchasing power of all of their members in order to work with the major distributors and manufacturers. Not only are they able to get you access to drop shipping services from suppliers that would otherwise be off limits, they are often able to get you better pricing because of the combined purchasing power of the whole organization.
For example, let's assume that Joe Seller is even able to set up an agreement with a manufacturer or distributor where they ship directly to his customers. Starting out, Joe only sells about a dozen units of product per week. Because he does such low volumes, he is unable to get better pricing. On the other hand, a good drop shipping club has many members who collectively do a large volume of business. Because of this, the drop shipping club can negotiate better deals for all of it's members; better deals than Joe Seller can get by himself.
Membership to many drop shipping companies is very reasonably priced. From my experience, it makes the most sense to pay a small membership fee and have instant access to thousands of products from many suppliers, rather than try to set up agreements with suppliers by yourself. Setting up an agreement with a supplier by yourself is often a lot of work. It will take you too much time to find these suppliers and time to set up agreements with them. During this time, you are doing a lot of work, yet not making any money. If you are finally able to set up a drop ship agreement with a good supplier, you still have to deal with the fact that you most likely don't have enough buying power to get the best pricing.
Additionally, many of these suppliers will charge you a setup fee. This fee can be more than $300. This is to deter consumers from trying to buy from them at wholesale. I've seen major distributors charge setup fees of up to several thousand dollars. Remember, these companies are in the business of selling to retailers, not the consumer. An actual retail business will not have problem paying a setup fee, while almost all consumers would be detered by this fee. In addition to a big setup fee, many suppliers will ask you to prove that you are an actual business. They will ask you for tax id and business liscense information. Some (not all) will also ask you to fill out lengthy applications that ask all kinds of personal information like social security number and bank information. Some will even ask you to send in pictures of your actual physical store. If you are just getting started, you probably do not have this information and even if you do, you probably do not want to give it out. Also, if you are planning on selling from your home business, you probably do not even have a physical store. As you can see, it can be very difficult and time consuming to set up accounts and agreements with major suppliers.
In my experience, the easiest way to get started with drop shipping is to join a drop shipping club. Wholesale drop shipping clubs have contracts that allow them to get the products at better prices because they do such large volumes of business with their suppliers. They also get you instant access to many suppliers all at once. And, of course, they will protect you from the scammers and middlemen out there. They will also provide you with the popular brand name products and niche products that you are probably looking for. Again, many small time manufacturers and distributors simply do not carry these types of popular products.
Doing your own research can be very expensive both in terms of time and money. If you are just getting started, be prepared to put in many, many hours of research. You'll also need to make sure you avoid scammers and middlemen. When doing research on your own, be sure that you verify the validity of any company before doing business with them. If you don't have the time to do the research, you will probably want to join a wholesale drop shipping club. These organizations have already done the research for you. They negotiate better deals on products on your behalf. They also only work with legitimate manufacturers.
Good product sourcing is vital for your business. There are many wholesale drop shipping clubs out there and I have experience with almost every one of them. dropshipaccess.com is the one I currently use and I am very happy with them. They offer a nice selection brand name products and great support. They offer good wholesale pricing as well and orders ship same business day. Also, the additional selling tools and resources are a tremendous help. I also like the fact that they provide integration with my eBay Pro Stores site - this is very useful.
Other clubs often have large startup costs and many do not have as good of a selection of brand names. I would encourage you to experiment, but do so at your own risk.
If you are interested in selling brand name products and don't want to put in the many hours of research, I would recommend joining a wholesale drop ship club. Again, this will save you considerable time and energy and will get you started quickly.
All the Best,
eBay Coach and Internet Entrepreneur