How to Find Good Drop Shippers for Your Online Retail Business

April 11, 2011   Drop Ship Strategies

It does not matter whether you are a beginning in the realm of ecommerce or have been selling products online for years; drop shipping products offer online retailers a great avenue to sell everyday products at a profit. Typically, a drop shipper operates as a wholesaler or a manufacturer and ships items directly to the customers of the retailers who are selling the products.

The Advantages and Disadvantages of Drop Shipping

A small online retailer can greatly benefit from drop shipping products. Some of these benefits include:

· No Inventory Risk
· No need for Large Storage Warehouses
· Allows for a variety of product offerings
· Drop Shipping is a great model for researching new products

Although there are many benefits to drop shipping, make no mistake about it, there are many disadvantages to drop shipping, including:

· Smaller Profit Margins – This is due to the fact that the wholesale pricing is based on single items as opposed to the traditional wholesale pricing that exists with making bulk purchases.
· Lack of Logistical Control – Because the drop shipping supplier is shipping the products to customers, the retailer has little control over logistics and customer service. If packages are delivered late or are damaged during shipping, the retailer will often feel the negative effects of a botched logistics process.

Keep them Honest

It can be difficult to find good drop shippers with decent wholesale prices. Quite often, new retailers will use search engines such as Google in order to find drop shippers, however, this is arguably the worst manner in which to find credible wholesalers as many middlemen and scammers use this strategy as a method to masquerade as a legitimate wholesaler.

A great way to find great drop shippers is by attending tradeshows that are related to the products that you want to sell. You will surely find reputable wholesalers and manufacturers that are members of the industry trade association and committed to the industry and the products that they sell.

Finding the Drop Shipper For You Company

After you have narrowed down your list of drop shippers, you need to interview several suppliers in order to find out whether they are the right supplier for you and your company.

First you need to determine whether the supplier has any experience working with online businesses. Many drop shipping companies prefer not to sell to online retailers who do not have a history of success, however, there are a few that are experienced in dealing with online retailers and truly understand the needs of online businesses.

Another questions that you need to ask is whether or not the drop shipper allows for one item to be shipped or if they have a minimum amount of product that needs to be shipped, for example 4 units at a time. You want to make sure that you find suppliers that are willing to ship single items for your business to ensure that you are not purchasing more inventory than you can sell. You also need to know if the drop shipper has a minimum sales amount required in order to drop ship product, this is generally referred to as a “minimum ticket”.

Overall finding a good drop shipper can be a tedious process, however, if you are willing to conduct your due diligence the potential payoff could be enormous. The reality is that your profitability will be determined by the quality of the drop shipper you use for your retailing business, so it is in the best interest of your company that you take your time and find the drop shipper that is right for you.


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