The world of dropshipping is often considered the easiest way to sell products online. The biggest difference between drop shipping and the standard retail model is that in drop shipping, the selling merchant doesn't stock his own inventory. Instead, the merchant purchases inventory as needed from a third party – usually dropshipping wholesalers or manufacturers – to fulfil orders.
Finding a Drop shipping Supplier
A number of different strategies may work for you, and some are more effective than others. The methods below are listed in order of effectiveness and preference, with my favorite methods listed first:
Contact the Manufacturer
This is my favorite way to easily locate legitimate wholesale suppliers. If you know the product(s) you want to sell, call the manufacturer and ask for a list of its wholesale distributors. You can then contact these wholesalers to see if they drop ship and inquire about setting up an account Since most wholesalers carry products from a variety of manufacturers, this strategy will allow you to quickly source a selection of products within the niche you're exploring. After making a couple of calls to the leading manufacturers in a niche, you'll quickly be able to identify the leading wholesalers in that market.
Pro's & Con's of Dropshipping
Using a certified wholesaler that dropships, is a low-cost solution for people who work from home, don't have money to spend on inventory and want to sell products online. dropshipping does work and it works very well but you have to be careful with a few things.
First, you can't just sell any product you want and expect to be able to compete with drop shippers. When you dropship a product, you are buying and selling one thing at a time. That means your wholesale price is for one product when you have it shipped.
Wholesalers always provide discounts to retailers when they purchase in bulk. That means your wholesale price for one product (drop-shipped) can be higher than a competitor who is buying in volume from the wholesaler which means they can sell that product much cheaper than you can, and in some cases, even cheaper than your wholesale cost!
So how do you make drop shipping work?
You must be able to pick the right products to sell and the right types of products to dropship. You can't assume that just because you might think a product is a ‘good idea to sell' that you should jump in and start selling that product.
You have to find the products you can have drop-shipped that you can compete within the current online market. Doing a bit of market research before you start the selling process is critically important for you to emerge as a successful Shopify dropshipper.
The Pros of dropshipping:
– You don't have to buy or store inventory
– Very low startup cost
– Easily add or change your product offerings
The Cons of dropshipping:
– Not all wholesalers offer dropshipping
– Wholesale cost is based on one product only
– Must spend time researching to pick the right product(s) to sell
Finding Good Dropshippers
It's difficult to find certified dropshipping companies and it’s almost impossible to do an internet search for “dropshipper” without running into hundreds of scammers and middlemen.
Most of the results you'll find online are companies claiming to be dropshippers but they are nowhere near the quality and pricing you get from working with genuine dropshippers. It’s important to be patient when searching for a drop ship company.
Certified dropshippers don’t charge setup fees or monthly fees. So while doing your search, if you stumble upon a company claiming to be a “dropshipper” or having drop ship websites and they ask for a setup fee, monthly fee, or annual fee, that’s an immediate red signal.
Dropshipping can be confusing, especially when dealing with scammers, so here is a list of 10 tips for finding a wholesale distributor.
Understand Your Industry's Distribution Channels
There are many ways a product can go from manufacturer to retailer. Not all wholesalers serve the same market. Understanding your industry's distribution channels, and knowing where you fit in the supply chain can help you find the right wholesale supplier for your retail or online business. The different types of wholesalers include:
Manufacturer: For some products, you can buy directly from the manufacturer. This is basically what a “boutique” store does — buys from small (sometimes one person) manufacturers.
Importer/Exclusive Distributor: In some industries, a company might have the sole rights to import and distribute a product in a certain country. Some may sell directly to retailers, but more often, they set up or sell to smaller local wholesalers.
Wholesaler/Regional Distributor: There is usually regional drop shipping wholesalers who take delivery of boxcar-sized lots, break them down and sell truckload boxes of products to local wholesalers.
Jobbers, “wagon peddlers”: These individuals make daily deliveries to local grocers and retail brick-and-mortar stores.
Each product industry has its own unique distribution channels. Some retailers will move enough volume to bypass jobbers, or maybe in a smaller industry, importers sell directly to retailers.
When you first start, you'll be buying from the smaller wholesalers at higher prices. As your volume increases, you'll be able to get better pricing and/or move up the supply ladder to a bigger wholesaler.
Try the Manufacturer First
You might as well start at the source. If you're selling branded items, go directly to the manufacturer of the product. They might sell to you depending on their minimum order requirements.
If you're too small for them or they only sell through established distribution channels, ask them for a list of distributors you can contact. By starting at the source (the manufacturer), you can either get the lowest prices or at least get a list of the most reputable distributors to kick off your search.
The fewer people you have to go through, the lower your cost will be, allowing you to be more competitive in the marketplace.
Have a Productive First Contact With a drop shipping supplier
Take the list of wholesale distributors you got from the manufacturer, and start contacting each one. What you're looking for are minimum order requirements and their wholesale unit prices.
To get the best responses, be honest about what you're looking for (don't try to sound “bigger” than you are), keep your emails short and to the point, and be friendly. You may also consider picking up the phone to make initial outreach calls or to follow up with the people you've sent your introductory emails to as well.
Try Searching for drop shipping wholesalers on Google
As mentioned above, you can start your preliminary research with some basic Google search terms. As you get deeper into your research, you'll probably get more specific about the products you're seeking.
Conduct Google searches for the words “wholesale” or “distributor,” plus some keywords from your products or niche. Try product names, model numbers and brand names. Go through each result and look for the “wholesale account” link or an email address or phone number where you can get more information.
In the rare case that the information is difficult to find or not readily available, you could do a WHOIS search to find the website's contact information.
Look for Wholesale Lots on eBay
If all else fails, some retailers or small wholesalers will sell bulk quantities of your product on eBay. Since eBay mainly targets retail consumers, the wholesale options you'll find here are usually only suitable for very low volume retailers.
But if you're just starting out, eBay might be the easy start you need to dip your toes into ecommerce and start shipping your product.
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