The quality of the wholesale distributors you choose to use for dropshipping is a major determining factor in the chances of online business success. This is especially important if you are operating alone and selling your products online either through an online store or through auctions. Wholesale distributor reliability is vital for the growth of your business, and even more so if you are in a competitive market. So, let’s look at some criteria to use for finding a good dropship distributor or manufacturer.
After finding a list of potential distributors, either online or offline with something like newspaper ads, the next step will be to evaluate the pros and cons of the dropshipping suppliers.
1. Well Established Reputation
A good reputation will imply reliability and honest. If you do not live in the same country or state as a particular wholesale distributor, you might not be able to meet them in person. Thus the only way to determine their reliability is their past history with other customers. The Better Business Bureau will provide information about American businesses’ history and business practices. If the distributor is outside the United States, look into whatever local government agencies oversee business procedures. Try to find out what kinds of complaints have been filed against them, if any. Other places to check are online forums that deal with online businesses and dropshipping. Internet forums are good places to learn a lot about online home businesses anyway, so do some reading if you have the time.
2. Do they ship abroad?
Some online business owners will need to ship products overseas. If that is going to be you, it is obviously necessary to find out if the dropshipping suppliers you choose can dropship abroad. Even if you don’t plan to initially ship overseas, it might be wise to plan for the kind of growth that involves international shipping by going with an international dropshipper.
To make good money you will need a good profit margin. If you need to pay high fees that will kill your profits, pick another supplier. However, don’t go with the cheapest distributor just because it’s the cheapest. You will need to find a happy medium between good service and price. If somebody is offering extremely low prices they are probably lacking in quality of service. It might be low product quality or long shipping times. Ask the dropshipper to see what their business exactly involves and what you are getting for the prices you pay. Expect at least a 15% discount off the normal retail price when using a dropshipping supplier
4. Payment Options
Find out if you need to pay immediately when a sale is made, or whether you need to pay all at one time such as monthly or every quarter. Also ask what kinds of payment options they accept and whether they offer any credit terms.
Over time as your relationship develops with your supplier, you can always re-negotiate the terms of your contract to save money on transactions costs.
5. Product Quality
The quality of your products can be crucial to the success of your business. Poor quality products or even illegal copies will ruin your reputation as a businessperson. Do not let this happen. If a supplier ships only in bulk quantities, ask for a free sample before doing business with them.