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 (1) Finding A Good Dropshipper

There are a lot of very good drop shippers on the Internet, but there are also a lot of scammers! Just as with any other source that you find online, you need to take precautions:

• Do they have any ‘extra’ fees? Genuine dropshippers should only charge you for the items you sell. Avoid companies that require a monthly subscription fee or something similar.
• Check the age of the site. Online dropshippers and wholesalers go out of business all the time either (a) because it’s a hard business to be successful in, or (b) because they are fraudulent. For these reasons, be very wary of dealing with new sites.
• Customer service is very important – especially in moments of crisis! - but sadly it is all too often neglected. Sending a test email will tell you a lot about the quality of service you and your customers are likely to receive from the company./li>
• Ask about warranties, guarantees, shipping policies and return policies. Everyone gets returns at some point so you need to make sure that you won’t have to foot the bill. Be sure to get in writing and signed!

There are several ways you can find dropshippers:

1: Searching Online – This is risky, but perseverance may pay off with hidden gems. Searching with keywords such as your product name ‘+ dropshipper’ is a good way to start. Just remember the best sites aren’t always on the first few pages of results.

2: Ring the product manufacturer – You can usually find the manufacturer’s name on the item packaging. Manufacturer’s often have preferred distributors and should be able to give recommendations. You can always use email if the manufacturer is located in a non-English speaking country and you are concerned about communication difficulties.

3: Trade magazines: Distributors and manufacturers pay to advertise in these magazines so it’s an excellent way of finding current contact details. An easy way to find trade magazines in your area is to search Yahoo’s Business directory.

4. ThomasNet - If you are looking for components – anything from boot heels and microwave components to seals and gaskets! - then you will find the excellent online list of distributors and manufacturers on ThomasNet useful. The global register Thomas Global is also worth checking out.

5. Paid Directories - WholesaleGopher has an extensive list of drop shippers as does Worldwide Brands. But be careful – many paid directories are scams. It’s not uncommon for users to pay for access only to find outdated links or links to sites asking for more money.

6. Trade shows - Tradeshows are an excellent place to find dropshippers, although they are usually only for established retailers, so you’ll need to be able to show sales figures (unless your business has just started), business cards and a tax ID. However, nothing beats talking to suppliers face to face.

When it comes down to it, there is no getting around the hours that good research requires. Taking shortcuts with your research only means you are more likely to lose out in the end – either because of a scam or because you haven’t found the best prices and are not making enough profit.

(2)  Managing Your Dropshipping Program

Your drop shipper is taking a lot of responsibility off your hands, but the fact is, you can never fully trust anyone other than yourself to do the job properly. For that reason, a large part of successfully using a drop shipper involves good management skills.

• Email or phone the dropshipper twice weekly to check up on stock levels. A drop shipper may not necessarily tell you if supplies are getting a bit low.
• Keep 2-3 ‘buffer’ items on hand in case you have orders that can’t be fulfilled through sudden stock shortages. This gives you more control over the ability to provide solid customer service.
• If the drop shipper is located internationally, then make sure you specify in your listing description that items will take 1-2 weeks to ship after payment. Honesty is the best policy - don’t try to hide anything from your buyers, this will only increase their mistrust of you if things do go wrong.
• Include your policy on returns in your listing description.
• If possible, use a dropshipper who is willing to add your brandname to the packages. For example, Msome let you upload your logo to their website where they will print it onto all your packages. They will also put your address as the return address, rather than their own company name.
• Consider enhancing personalization by giving your drop shipper hand-written thank-you notes to include in the packages. Not all drop shippers will be agreeable to this, but you can always try.
• Note that eBay has a new policy that requires you to list the location of the goods at the time of listing. If you are using a drop shipper, this means you must list China, Hong Kong, or wherever they are located. Some buyers may find this off-putting so I highly recommend including an explanation for the location in your FAQ or description. Explain the benefits to your customer – they are receiving unique goods at a much more affordable price than they could otherwise get! Don’t forget to offer a full guarantee and refund/returns policy to allay any fears over quality.
• Very Important!Follow-up every sale with a customer satisfaction survey. It is critical that you keep tabs on how well your dropshipper is performing. There’s no doubt you’ll be the first to know if the service is extremely bad, but you are less likely to hear if service is mediocre, even though it may still be bad enough to discourage customers from returning. Remember that eBay buyers are now able to give feedback on different aspects of the sale, so it’s now doubly important to ensure every stage of the sales process is excellent.

(3)  Dropshipping Goods And Bads

Wholesale dropshippers are a very popular form of sourcing product because they allow you to pay only for the items that you sell.

It works like this: You find a dropshipper and set up an account. Different dropshippers have different setups but usually you can choose to credit your account, or, you can simply leave it empty and pay for each item as you sell it. Once you’ve created an account, all you need to do is grab the dropshipper’s provided photos and product descriptions for the items you wish to sell and list them on eBay or your website.

After you make a sale and receive payment, log into your dropshipper account, select the product you have just sold and take it through the checkout and pay for it. Enter the buyer’s address details, and the dropshipper will package it up and post it!

Basically, dropshippers take all the responsibility for handling and managing stock, saving you a heck of a lot of time!

But, because they do so much of the work for you, dropshipping is necessarily more expensive than buying in bulk. To give you a general idea, you could be paying an additional $2-$5 per item to cover the handling, postage and packaging costs.

Bulk buying seems more profitable on the face of it, but sellers often neglect to fully account for the time it takes to go and get the item, wrap it up and take it down to the post office and post it.

When all is said and done, both dropshipping and buying in bulk should be equal in cost, although many sellers prefer to buy in bulk to get the immediate profits, even though that effectively devalues their time.

Offer more choice to your customers

For new sellers the main advantage of dropshipping is the lack of risk. But for more advanced sellers, I believe that the greatest benefit dropshipping holds is the ability to offer more choice.

You may have heard the phrase ‘long-tail’, a bit of a marketing buzz-word in recent months. In a nutshell, the ‘long-tail’ means targeting the far corners of niche markets that are normally untapped by selling a lot of low-demand products. Experts have worked out that when added together, sales of low-demand products actually exceed those of single products with very high demand!

Drop shipping enables you to take advantage of that strategy very easily. For example, a DVD seller using a dropshipping supplier could promote 400,000 different DVDs! They are able to make money by selling a lot of low-demand products without any risk or storage inconvenience. This gives the DVD seller a massive advantage over regular DVD stores.

Of course, dropshipping isn’t without its risks.

Probably one of the most common problems sellers have with dropshippers is sudden stock shortages.

A sudden rush for a particular product might cause the dropshipper to sell out, leaving you in a bit of a sticky situation if you’ve got orders to fill!

Having no control over your inventory also means that if buyers ask you for a unique photo of the item (which some do after being caught out by fraud in the past), you are unable to meet their request.

This leads us to the fact that Drop shippers aren’t perfect…but if they stuff up, you get the blame. If the dropshipper packages the item poorly, causes delays in shipping, or makes a mistake with the order, then you are held responsible, even when there is very little you can do about it.