Finding a Dropshipping Suppliers and Making Agreements
We’ve come a long way so far, but it’s finally time to start talking about suppliers. Now that you have established your business and understood your place in the market, you can try to contact suppliers to get real products.
In this section, I will give you information on how to find and contact suppliers. I’ll also go over the pitfalls that first-time dropshippers often encounter when looking for suppliers to work with.
Finding Dropshipping Suppliers
It takes some caution to find the right suppliers.
That’s why it’s so important to use the right strategies. With a little work, you can separate good from bad and find reliable wholesalers to do business with.
Some of these strategies are more effective than others, so I’ll start with what’s best for me and then move down the list.
Contacting the Manufacturer
This is the easiest and most effective method to find wholesalers. Once you have determined what products you want to sell, find out who produces those products and communicate with them.
Ask for the list of wholesalers.
This gives you an official list of the manufacturer so you know you will be working with legitimate businesses.
This strategy is fast and requires only a few phone calls.
You can find the same wholesalers over and over again by searching for different manufacturers in your niche.
This lets you know who the leading wholesalers are and you don’t have to work hard to find it.
If you want to be able to find and even change different suppliers easily, take a look at Oberlo. Oberlo seamlessly integrates with Shopify and makes supplier management comfortable.
You will have access to a large catalog of products from thousands of suppliers.
In addition, you will get access to many other useful features. You can purchase products directly from suppliers, complete orders automatically, automate your prices, and more. Here is the full list of Oberlo’s features.
Finding a Supplier
I talked about supplier guides on wages before. No supplier charges a monthly fee but can provide a supplier directory.
Supplier directories list wholesalers for all kinds of niches. Guides have two main benefits: safety and convenience. Guides are safe because they qualify before listing and they are suitable.
Because you can search for wholesalers by niche or product type.
It can save you a lot of time searching for suppliers.
Supplier guides are by no means required. They make it easy if you have money to spend, but you can find all the legal wholesalers you need without touching a directory.
First of all, directories are great for some dropshippers but not for everyone.
If you don’t want to save some time and pay an entry fee, here are some of the most reliable and well-known directories. I do not charge or advertise for any of these. I just want you to know what your options are.
This is one of the oldest and most trusted supplier guides. Founded in 1999, Worldwide Brands has a huge database of thousands of certified wholesalers.
These wholesalers are all high-level, not middlemen, that is, they are not retailers acting as wholesalers.
If that’s not enough, you can also browse over 10 million products.
You need to pay $ 299 for a lifetime membership, which is pretty much compared to most of the guides here. If you plan to rely too much on a guides and want one of the best, Worldwide Brands is definitely worth checking out.
Wholesale Central is completely free. This may seem like a red flag at first, and it’s true that there are some issues with this guide.
While Wholesale Central charges a listing fee for suppliers, not every listing is genuine.
First, most wholesalers seem to be retailers selling at ‘wholesale’ prices.
Wholesale Central also claims to screen applicants, but they do not specify how this process works, so some illegal suppliers are likely to be overlooked.
In conclusion – feel free to browse, but be careful and do a lot of research before getting in touch.
How to Detect Fraudulent Suppliers?
Now that you know how to find suppliers, I’ll show you how to identify fake dropshipping suppliers.
That’s right – some retailers appear to be wholesalers so they can sell more and drive prices up like crazy.
You want to work with genuine wholesalers who buy directly from the manufacturer and can offer you a better price.
If you call the wholesalers directly, it can be difficult to tell which ones are fake. In fact, it can be nearly impossible. Because fake ones generally look more reliable.
Unfortunately, legitimate wholesalers tend to be less digital marketing enthusiasts so it’s harder to find them. On the other hand, fake vendors are often very good at digital marketing, so you’ll come across a lot when searching.
There are several signs addressing fake dropshipping suppliers:
They sell products directly to the public
Many retailers who appear to be wholesalers sell products to the public, and will often advertise “wholesale price” to get customers to think they’ve got a good deal.
What they do is sell products at inflated prices and put wholesale tags on them.
This is a sign that you are not dealing with a legitimate wholesaler.
If you see a wholesaler listing their prices publicly, this is also a sign that they are fake.
A true wholesaler will never sell directly to the public.
Also, you must apply and be approved to deal with a wholesaler. Wholesalers do not work any. You have to prove that you have a business and that it is a legitimate business.
They charge a constant fee.
This is another way that fraudulent suppliers get more money from their unsuspecting victims. They charge a monthly fee to do business with them. No true wholesaler would ever do this.
However, you may come across some wholesale guides that may charge fees. This is actually a good way to find suppliers, so I’ll talk about them briefly. Note that only one supplier will not charge any base fees.
They don’t want to sign a contract.
This is a big danger sign. You must always sign a contract to make a legally binding employment contract before making any payments. The person who refuses to sign the contract (or says it is not necessary) is the fake supplier.
How to Identify Legal Wholesalers?
So how do you find legit wholesalers to work with? Fortunately, we will not play a guessing game. True wholesalers can be identified using a few simple criteria:
You must first apply.
While there will be no application process for fake wholesalers, legitimate wholesalers will definitely. You will have to exist legally and the supplier will have to approve you. All of this will happen before you see prices.
There is a minimum order fee.
It’s common for suppliers to have a minimum order fee, especially for your first order. This is because suppliers only want to work with serious businesses.
Therefore, setting the minimum order fee only helps filter people browsing the shop windows.
Sometimes this can be problematic for dropshippers. See the scenario below. A supplier has a minimum order of $ 500, but your average order size is only $ 75.
In this case, it looks like you will have to pay $ 500 to open the dropshipping account at first.
What do you do? My recommendation is to convert the extra amount that will be applied to future orders into credits.
This way, you get a minimum order fee and you don’t have to order extra items.
They have experienced staff and a dedicated support team.
This is truly the hallmark of a first class supplier. You should be able to call a representative who knows your niche and get detailed answers to all of their questions. If company representatives do not seem knowledgeable, they may have been hired without any experience or training.
Not only that, but pay attention to the dedicated support team. If you’re working with a wholesaler, you’ll need to be transferred to a specific customer support member to meet your needs. This will make it easier to solve the problem.
Calling and emailing multiple team members only causes confusion and makes these problems worse. Therefore, it is very useful to set up a theme with a single person.
Technologies are up to date.
Remember when I said legal wholesalers tend to be bad at digital marketing?
Unfortunately, they also tend to be bad with technology as a whole.
But it definitely helps when your supplier has a good website and interface.
Being able to use features such as real-time inventory, searchable order history and easy-to-use online catalogs is incredibly useful and saves you a lot of time.
There are pre-order fees.
While no retailers charge a monthly fee, most will charge small pre-order fees. These usually range from $ 1 to $ 5 or more per order, depending on the size of the order.
These fees include packaging and shipping, as individual orders carry much higher fees than bulk orders.
They will not insist on persuading you to work with them.
This is a tactic you’ll encounter a lot among fake ‘wholesalers’. Since these businesses are just retailers, they will use sales tactics to try to get your money. They’ll talk about its advantages and give you a lot of information that won’t really work.
Real wholesalers do not take much effort to work with you. They will ask you to apply and have strict requirements. If a wholesaler keeps talking about selling, lubricate the soles.
What are the Characteristics of a Good Supplier?
Just because a supplier is certified doesn’t mean it’s the best option for you. Choosing the right suppliers can be a lengthy process, but it’s worth it when you find one that checks all the boxes you need.
To do this, you need to know how to identify a good supplier.
If you are new to searching for suppliers, you may not even know where to start analyzing the quality of one supplier against another. Don’t be afraid, because I have some expert tips for you.
You may not be able to look at them clearly, but they can save you a tremendous amount of time and money.
They receive orders by e-mail.
Having to make calls instead of sending emails might seem like a minor issue that shouldn’t be a problem. But imagine a future where you get hundreds of orders every day
Will you have to search for all these orders (or hire someone to do it for you)? Moreover, even ordering through the supplier’s website can take time.
Being able to send your orders via e-mail will make it easier for you to place new orders every hour. Fortunately, many wholesalers will accept e-mail orders, but there are others that use other systems.
Their location is very important for shipping.
Assuming you are in the US, consider where the best location for a supplier is. If the supplier only has one shipping center, it is most logical to be in the middle of the country.
This allows packages to reach 90% of the USA within 2-4 business days.
Some orders may take more than a week to reach customers if the supplier is away from the coast or perhaps south.
A centrally located supplier will give you consistent shipping results, and on average it will only take a few days for people to deliver their items. International transportation is of course a completely different situation.
However, a central location is ideal for domestic transport.
Its operations are effective.
Obviously, you don’t want to work with suppliers that are constantly ordering or making mistakes. But how can you know this without working with them? Unfortunately, you wouldn’t know without actually working with them.
What you can do is order a few tests.
This does not conclusively prove the quality of the supplier, but it will give you some useful information.
You can see how the order process looks like by you, how long shipping takes and how items arrive. For example, if the supplier doesn’t send tracking information within a few days, that might be a red flag.
The whole process from order to delivery should be smooth and smooth.
Preparing to Communicate with Suppliers
Once you have a list of suppliers you want to contact, you need to take care of a few things before you can reach them fully. It’s easiest to interact once you have the necessary legal basis and know exactly what you’re looking for.
This is a must. As I said earlier, most wholesalers will want proof that your business is indeed legit. Also, most wholesalers will only send their prices to approved businesses.
So unless it’s your company, you probably won’t see wholesale prices.
Know What You Want
What do you expect from Dropshipper? What products would you like to offer? These are the types of questions you’ll want to answer before speaking to a supplier. Basically, you’ll want to consider all the features before communicating.
(The section above about knowing what to look for should also help you with this.)
Wholesalers are waiting to do business but they get tons of spam every day from people who waste their time. You don’t want to be one of the people either. You need to show them that you want to do business, and the evidence is about how you present yourself.
If you go straight to the point and don’t ask millions of questions, the supplier will know you’re serious.
That’s why it’s so important to know what you’re looking for before you pick up the phone or write an email. Try to take their time as little as possible (but feel free to ask relevant questions).
Ask If They Are Eligible For Dropshipping
Not all wholesalers do dropshipping, so this is the # 1 question you’ll probably want to ask. You may already know, but it would be polite to ask (which also represents you and also).
You can’t talk to a supplier on the phone for half an hour about products and pricing just to find out if they dropship.
If a particular supplier isn’t dropshiping but you definitely want to work with them, let them know and see if you can make a deal. This is the exception rather than the rule, but it is not unprecedented.
The phone is like your friend
The first skill of the average entrepreneur these days is to write and send a quick email. Email has become the newest method of communication for many people.
On top of that, fear of talking on the phone is very common even among entrepreneurs. It is easy to understand why. Making your first call (or even your top ten) to suppliers you’ve never spoken to before is daunting.
However, when you first pick up the phone and start talking, it gets less scary.
It’s not as bad as it seems. Even if your communication skills are not strong, don’t worry; the suppliers are used to it and are there to help you.
With one active phone call, you can do the job of fifty e-mails. So instead of waiting for days to get a response in your inbox, you can get your job done right away.
Calling instead of sending an e-mail saves you months of wasted time.
Are you still afraid? Here’s a tip for you – write down your questions before calling. That way, you’ll have a layout for your speech. Believe it or not, this little technical difference can make a difference.
You found a good supplier, talked on the phone, signed the deal and are ready to work together. You need to know how to pay suppliers so that there is no disruption when it’s time to pay.
Almost every wholesaler will accept credit card payment and this is the easiest way to pay easily.
The nice thing about this is that you will have few upfront costs because you will pay the supplier for orders that customers have already placed. In this way, it will be very easy to win many awards and / or to increase the more common flight miles.
Also, credit cards are fast and secure. Many vendors save your CC number on file and charge you a simple charge when you place an order, making the process simple and effortless.
While not every supplier will accept PayPal, most people do because it has become so common. This is also a very convenient way to pay, but when you do business with PayPal you always pay, so it’s not the best option.
Generally speaking, a credit card is better, but there are some situations where PayPal can win. You need to research both options and see which one is right for you.
If in doubt, go with a credit card. You can get tons of rewards and skip the high pricing PayPal fees.
This is a more traditional method of paying suppliers, but is still widely used today.
Under net terms, you have a certain number of days after purchasing the products to pay, usually by check or bank transfer.
For example, you have 30 days after giving the “Net 30” terms payment order.
You are probably asking yourself why suppliers are using this payment method if they can’t get the money after them. Couldn’t someone steal the product?
Suppliers solve this problem by requesting credit references.
If your supplier of choice uses net terms, you must provide some relevant documentation when applying for an account.
Doing Business with Suppliers
When working with a supplier, you may be wondering what their responsibilities are, or you may want to know what the retailer-supplier relationship is like.
While this varies from supplier to supplier, there are general rules you should consider when preparing to start working with a supplier.
Send orders on time. This is very important not only for your supplier but also for your customers. You need to get your customers’ orders quickly from point A (your site) to point B (supplier).
Depending on how many sales you make, this is to process daily orders, or if you’re selling like crazy, you can outsource the work to a virtual assistant.
Meet the sales representative.
As I briefly mentioned earlier in this chapter, a good supplier will appoint a special representative for you.
You will want to have a good relationship with this person because he or she will assist you and solve any problems with orders.
If you have problems with your vehicle, do not hesitate to speak to someone at a higher position.
Your agent is an important part of the supply chain, and a bad rep could mean orders go wrong. Can’t be!
Dealing with Spoof Orders
Dropshipping isn’t perfect, and there are many problem areas you should know about.
One of these problems: it is the sloppy orders.
Suppliers can disrupt orders from time to time, especially if you are working with a larger supplier with a large amount of orders.
Sometimes this means that the supplier sent the wrong product to the customer. Worst case scenario? They never send the product. This situation causes a seller to chill.
There is a 3-step process that you can use to fix order errors:
Apologize to the customer.
The first step is to admit the mistake and apologize for it.
You shouldn’t blame your supplier. This makes you look like a poor salesman who can’t stand their mistakes.
Remember, the customer should never know that you have a supplier! So apologize immediately.
After apologizing, you’ll need to fix the error somehow.
How you do this will depend on how big the error is.
Sometimes it is enough just to send the right product to the customer.
Other times, you may want to refund shipping or add a small freebie such as a small amount of store credit. In any case, you should correct the situation with your customer.
Confront the supplier about the error.
Your supplier should pay for it, even if you have to correct the error.
Typically, a supplier will cover shipping charges for returning an incorrect item or shipping a new one.
Usually, they don’t pay for freebies or upgrades you give the client.
So what if your supplier sinks several orders in a short period of time?
One hundred percent means it is a bad supplier. Unfortunately, there isn’t much you can do when dealing with a poor quality supplier.
Start looking for another supplier who has a better reputation for doing your job. If you leave a supplier, be sure to clearly let them know why!
After Obtaining a Supplier
After finding a supplier, take some time to see how they are performing. You will feel how efficient they are after a few months.
If things are not going well, don’t be afraid to offend them and look for another supplier.