Drop-shipping is an E-commerce order fulfilment model that has soared in popularity over the last few years. What does it mean? Well, in simple terms, with drop-shipping, you don't hold any stock.
Instead, your customers buy products from your website, and these orders are shipped to them via a third party, which holds its own inventory.
It's easy to see why this model is so attractive, particularly for startups. Essentially, you're outsourcing the logistics side of your business, giving you the freedom to focus exclusively on sales and marketing.
It's a great way to minimize the risk of holding stock, and, because it eliminates so much setup cost, it's empowered thousands of entrepreneurs to start their business on a shoestring budget.
Of course, that doesn't mean it's easy. You may not be actively involved in order fulfilment, but your customers still expect a great experience, efficiency, quality and reliability are all fundamentally important, and if your provider falls short, it's your reputation on the line.
And these qualities all boil down to one thing: finding a great supplier. With a great supplier, everything becomes very easy. On the other hand, pick a bad supplier and you're letting yourself in for some pretty nasty headaches.
Do Your Research
Right off the bat, let's say this: finding great suppliers isn't easy. The wholesale world often seems pretty shady and secretive, and it's littered with dead-ends and scams.
Firstly, your competitors clearly aren't going to share supplier details. Nobody in your niche is going to be in a rush to help you. It's made all the more murky by the fact that wholesalers aren't traditionally the best at marketing, so you have to do some real digging to find them through search engines.
Finally, you have the option of buying a list or supplier directory. The web is littered with these, and it can be tempting but they come with varying standards of veracity, and that's being kind.
This is why you really need to do your research, not only to identify these companies in the first place, but subsequently to verify that they're sufficiently reputable and reliable to justify your partnership.
Contact the Manufacturer
One of the best starting points, if you know what product you'll be looking to sell, is to get in touch with the manufacturer directly. You should ask them if they can provide you with a list of their wholesale distributors, who you can then follow up with individually. This allows you to ensure you're working with genuine wholesalers, ensuring the healthiest possible profit margin.
Once you get a list of wholesale distributors, you can start by reaching out to them via email. Oftentimes wholesale distributors do not advertise that they drop ship, and it only takes an email or phone call to find out if they do.
Occasionally suppliers will want to know if you already have a website running, or if you are experienced in selling online. No matter what, be sure and present yourself in a confident and professional manner. Remember, you will be selling their products, helping you and them profit.
OK, this comes with a disclaimer, since we've already mentioned that these companies tend not to be great at SEO. Search is an easy (and free) way to get started, which makes it a worthy inclusion in this list, but, fair warning: you'll encounter a lot of irrelevant and spammy listings, and you may have to scroll through several pages of results before finding what you're looking for.
When searching for drop ship suppliers in the search engines, it helps to know what product you would like to carry. If you would like to sell "personal alarms", you can type "personal alarms" + "drop ship" in Google, and you will see several results in the first page. I have personally used Safety Technology in the past. But don't stop at first page results. I have had great success with Cutting Edge Products, which shows up on page two of search results.
Business for Sale Directories
Websites like BizBuySell are marketplaces that allow people to buy and sell businesses. You can go to these directories and browse by "online websites" for sale. In those listings, many of the sellers will mention that the items are drop shipped 100 percent. You can also get some ideas of how profitable these businesses are by how much the revenue posted in the listing. Some sellers post the website URL, which will give you a good idea how a website looks at that revenue number.
Of course, they often won't list the drop shipper information, but it is usually easy to search the products, and even product SKU's in Google to find out who drop ships these items.
Directories are essentially large lists of wholesalers, and are a good way to access a large number of contacts in a time pinch. It sounds easy, but, again, there's a caveat. As with buying any data list, you'll often find that these can be low quality to say the least. And, having handed over your money, you can be pages into a list of dead, old, outdated contacts before you realize that you've made a mistake, so make sure to do some comprehensive research before shelling out.
Worldwide Brands, Doba, Salehoo and Wholesale Central are just a few options at your disposal. There are plenty more out there. Alibaba, China's largest retailer, is also a good channel through which you can search for dropshippers. You can identify potential suppliers simply by searching for the keyword "drop-shipping".
Trade Shows are a great way to make contacts, research products and, yes, meet suppliers. And, since they're all gathered in one spot, you can meet a lot of them in volume, strike up relationships and get a feel for the people who might be best for you to work with. Of course, attendance will obviously cost you time and money, so make sure you do your homework on the event to ensure it'll be worth your while. Saleshoo's Trade Show Directory is a good place to find out about upcoming trade shows in your area or niche.
Choosing the right supplier for your drop-shipping operation can make or break your business. Following some of the tips above can get you in touch with wholesalers, and from there, it's up to you to work out the best fit for your organization.
Remember, when setting up a drop-shipping arrangement, there are some really important questions to ask. Most importantly, find out exactly what you'll be paying. Will it be a simple per-order fee? Will they charge a monthly subscription? And will they set minimum order values whereby you need to meet a certain sales threshold or incur extra charges? This is a legitimate approach taken by wholesalers to weed out non-serious businesses, but you need to be realistic to ensure you protect your own bottom line.
Finding suppliers takes a lot of research and hard work, it definitely isn't easy. But it's so critically important that, once you're up and running, you'll be more than glad you invested that time and effort in the beginning.