Ultimate Dropshipping Guide

Chapter 4: How to Find (and get approved with) a Dropship Supplier

Finding the right dropshipping supplier involves some effort, but it will save you time, money and headaches in the long run. Once you choose a supplier that best fits you and your business’ needs, you will want to build a good relationship with them.

How to Find Dropshipping Suppliers

Understand the Supply Chain

To help determine quality dropshipping suppliers, let’s start by reviewing the supply chain process. All products begin with a manufacturer, and some of those manufacturers also provide dropship services, which usually offer the benefits of the lowest price and greatest profit margins. This is an important question to ask when choosing to work with a dropshipper – do they sell wholesale and dropship, or do they use separate dropship distributors? In instances where manufacturers don’t have their own dropship process in place, they might choose to work with one or more wholesale distributors, who in turn then offer their products (and services) to you at a higher price.

Sometimes, there may even be secondary wholesalers that claim to be buying from the manufacturer but are actually a step removed and are working with a wholesaler themselves. This all means less profit margin to you, so be sure to find out exactly where the source is coming from and if you can cut out any unnecessary middlemen in the supply process. You may still technically be working with a quality dropship wholesaler, but not necessarily the one that offers the most value and cost benefit to you.

Dropshipping Supply Chain

Determine Your Dropship Needs

Next, it is important to evaluate your business and goals to identify what you really require in a dropship supplier to be successful. Make a list. By pinpointing exactly what you want in a dropship wholesaler, you can disregard any that are not in line with your ecommerce plan. For example, those who require volume agreements way beyond your fulfillment needs. Then, you can consider profit margins based on your product costs and selling point and determine if their pricing plans are within your budget. You can continue this evaluation process based on your list. Quality dropship wholesalers will want to engage in a partnership where they know they’ll build a lasting rapport and drive business for both of you – not push you into terms that only work for them.

Don’t Be Afraid to Ask

While doing your research, reach out to friends, family, colleagues and anyone else you know who has successfully run a dropship business. Also, check out online forums and social media outlets dedicated to dropshipping suppliers’ channels, such as Dropshipping Groups on Facebook or dropship threads on Quora. These groups are more than happy to share their insight and offer advice or referrals to the best partners. You might even want to ask any dropshippers you have interest in (but aren’t quite the right fit) if they have any referrals, since they likely have many industry contacts. This is a good option if, for instance, you want to work with a supplier, but their volume requirements exceed their needs – they might be able to point you in the direction for a smaller scale operation.

Dropship Supplier Directories vs. Apps

A great way to start your search for a dropship supplier is through a directory. Directories are websites that compile a list of dropship suppliers for you to navigate through. You still have to go through the process of contacting suppliers and become an approved reseller. Also with dropship supplier directories, you have to find a way to import and update the products on your store. This could be done through dropship automation software, developers or manually – all of which either takes time or money.

Dropship apps on the other hand already source the products for you with no hassle on your part to contact the suppliers directly. All you have to do is embed the app into your ecommerce store, such as through the Shopify App Store, and import the chosen products into your store in a simple, straightforward process. Below, we have put together a list of some of the top dropship supplier directories and apps.

Dropship Supplier Directories

Here are some resources you can use to start your search with a supplier directory:

  • Inventory SourceInventory Source is a dropship automation software platform that allows your online store to integrate with an expansive supplier network of over 180 suppliers and manage your product feed and dropship orders. The Inventory Source directory is free and unique in that it not only shows products and sample pricing but only lists suppliers that have a dropship product feed that is being actively monitored by Inventory Source’s software.
  • Wholesale Central: Wholesale Central is a source that allows you to quickly find a dropship supplier by categorizing them by product type.
  • Salehoo: Salehoo has a supplier directory of over 8000 companies and 75 product categories, but in order to gain access to the list, you have to pay a $67 upfront fee (with a 60-day money-back guarantee).
  • Worldwide Brands: Worldwide Brands is a longstanding company with a vast 8000+ supplier directory; however, you can’t view the full list without paying an upfront $299 lifetime membership fee.

Dropship Apps

  • Oberlo: Oberlo is a popular dropshipping app among Shopify users. The app sources products from Chinese suppliers, so the downfall is that you have to do extra research to make sure you’re importing quality products. Another downfall is that shipping times can be lengthy since the products are coming from China. But, this app can be a great start for those wanting to get started quickly.
  • Dropified: Dropified is another great dropshipping app that allows you to source from different dropship suppliers, including Aliexpress suppliers located in the US! So, you’d be able to get your product to the customer faster and not have to worry about those lengthy shipping times. Other features include: 1-click product importing, bulk product customizations, automatic pricing rules, easy variant setup and more! Dropified also offers an eBay automation integration, which allows users to edit and customize product images, descriptions and variants as well as upload products to your eBay store in only a matter of a few clicks.
  • Spocket: Spocket advertises that 60 percent of their suppliers are located in either the US or Europe, which is great for quick product delivery times! Their features also include 1-click order processing, branded invoicing, order samples and more.
  • Printful: Printful is different from the ones above in that it is a print-on-demand dropshipping app meaning it’s geared towards custom apparel and accessory online stores. All products from Printful are shipped from the US, which keeps shipping times quick, but keep in mind there’s a longer turnaround time before shipment for print-on-demand products because of production.

Evaluating Dropshipping Suppliers

Not all dropshipping suppliers are created equal. Each supplier is unique in what they offer, such as the amount of product data they give you or their dropshipping policies. When it comes to evaluating dropshipping suppliers, there are some core areas you need to consider:

Their Product Quality and Authenticity

This is one very obvious (and probably most important) area to research that surprisingly can go overlooked. In reading reviews and doing your research, especially in industries such a fashion, jewelry and electronics, it is very important to make sure you are building a retail business around products from a supplier you can trust. Pay close attention to the products you are researching- are there any grammatical errors in the title or product description? I know we all make mistakes, but if these errors are consistent among a line of products, you are likely looking at a fake or counterfeit product. Also, if the prices seem too good to be true, it unfortunately probably is. And, for electronics especially, be wary of China dropshipping since many of the counterfeit companies originate there.

Their (Reseller) Customer Service

If you are applying to become a reseller and can not get a response over email or phone for weeks, you will likely not want to do business with this supplier as it is an indicator of how they do business. When it comes to questions about the products, returns or delayed shipments, good customer service can make up for the inevitable hiccups any partnership is going to have.

Their Warehousing and Shipping Options

Depending on where you are selling (U.S., Canada, International, etc.), this can play a large part in selecting your supplier. Suppliers with multiple warehouses can add complexity to the process but can be hugely beneficial to save money on shipping and can be an even bigger asset for those with warehouses in different countries. A Canadian and U.S. warehouse pair is a common strategic approach to get around trade/tariff laws that prevent smooth (affordable) shipping across this border.

Their Return Policy

If you are (or become) a successful retailer, you will have returns- it is part of the business. So knowing your supplier’s return policy and ensuring it does not hang you out to dry is a critical area in evaluating suppliers, especially dropship suppliers.

Their Inventory Feed

If you are selling a high volume of SKUs at thin margins (which is common in the dropship retail game), the inventory feed quality and accuracy is a VERY LARGE part of how you do business and which supplier’s you want to work with. If you are dropshipping hundreds or thousands of products from multiple suppliers, product images, titles, MSRP, descriptions and even categories in some cases can be almost necessary to be provided by the supplier. Also, a daily feed to accurately inventory quantities and new products is critical to running your business.

Building Good Supplier Relationships

Getting off on the Right Foot

You have researched various wholesale distributors and have identified the supplier that is a perfect fit for your business. You are anxious and ready to launch your business ASAP.  Next step is to apply to your dropship supplier to become approved as a reseller and begin uploading their products to your sales channels. But before you get ahead of yourself, just make sure you start your communication with this partner the right way.

Completing a wholesale application or getting started with a new supplier source is a simple process. However, some resellers still make a simple mistake when initially communicating with their potential supplier, and they negatively impact their ability to get approved.

You never get a second chance to make a first impression, so make sure you start off on the right foot when applying to a wholesale supplier or when asking any initial questions.

It does not matter if you are starting a new personal relationship and on your first date or starting a new business relationship with your first email or application. How you present yourself with your first few comments or questions can impact your relationship over the long term or even your ability to continue in a relationship.

For example, let’s say you submit an email to your selected distributor similar to the below:

“I am ready to sell your products.  Send me catalogs and details and prices, especially on your bestsellers. I am making a ebay store and website. I don’t have any money so I need to sell products fast so I can pay my bills.”

While some suppliers might approve an application who completes the needed fields, others might be a bit more restrictive and even delete this email instead of providing a response back or approving an application. Most people don’t send emails that are this bad, but you should always consider how your initial communications reflect on your potential relationship with that supplier and on your application approval process.

Here are a few tips on how to start the communication with your wholesale supplier the right way:

  • If you want to be in business, with business partners, you should look like a business. Buy a domain name from your company. You can use it for a blog as well as setup your ecommerce website using ShopifyBigCommerceWooCommerceMagento, etc. selling products at that domain. Even if you are only selling on eBay or Amazon, it is still great to register a domain related to your business name so that you control your brand and have ownership of it in the future as well.
  • Registering a domain from GoDaddyWeb.com or some other registrar service is simple and costs around $9/year. More importantly, when you own the domain, they often include a free email service for your domain account. Instead of emailing your suppliers from a Hotmail or Yahoo email address, get the domain and email service to communicate with your potential product sources with the domain of your business.  Why email from Bill_Garmin@hotmail.com about your new electronics business when you can email from Bill_Garmin@YourElectronicsOutlet.com.  Its a small thing, but it’s a simple way to get taken more seriously from the start.
  • Take a few seconds before you hit “send” and review your email, and make sure you have no spelling or grammar errors in your email. Use correct capitalization and punctuation. Everyone makes mistakes, and it’s not the end of the world, but start things off by looking professional. Also, this is not the place for emojis or “lols”- you’ll want to be cognizant that business writing is very different from the ways we communicate online personally in our day-to-day.
  • Include a subject line like “New Wholesale Account Question” or “Pre-Application Question for Wholesale Reseller Account”. There are plenty of reasons why someone would submit an email, especially at a general contact address. You want to make sure your initial questions are addressed by the team members responsible for new reseller applications, so helping them out with a simple subject line is a great way to make sure your email and questions get to the right person more quickly.
  • Make sure you take a few moments to at least see if your questions are covered in their FAQ or policy page. If you want to make a good impression, don’t just ask them for their shipping options, take five minutes to see if they have a link to their shipping policy on their website.
  • It is okay to still have questions or ask for clarity. Stating, “I have reviewed your Shipping & Returns Policy at the link in your footer; however, I wanted to confirm XYZ detail.” is much better than just asking them to send you details on their shipping options.
  • Include your business name and some basic contact details in your email signature.

For the suppliers who ask you to contact them first for an account application, you can submit an email like the one below:

(EMAIL SUBJECT LINE:) New Retail Account Request

My name is Bill Garmin, of Your Electronics Outlet, Inc., in Jacksonville, Florida. I found your company recommended by InventorySource.com‘s Verified Supplier Directory. I have reviewed your program details and product catalog, and I am interested in setting up a retail account with you.

Please let me know what information and qualifications you require from me, and I will be happy to return them immediately.

Thank you,

Bill Garmin

Your Electronics Outlet, Inc

Email- Bill_Garmin@yourelectronicsoutlet.com

Phone- 904-999-8888 ext 95

It is a simple email, but it is all that is really needed to start the process. Again, if the application process is clear on their website and you don’t have any initial questions, then just complete their application. But, if you need to request any details or confirm the application process, an approach like the one above will be all that you need.

It does not take much to make the first impression with a new wholesale supplier a good one. A positive first impression can help you get approved quickly and start your new business relationship the right way.

The Supplier-Retailer Relationship

It’s in your favor to maintain good relationships with your suppliers. Some of the benefits include competitive prices, generous terms and improved product availability. By nurturing your relationships, you can continue providing your own customers with quality products at reasonable prices.

While there are many types of business models, one of the more common in online retail involves merchants purchasing from wholesalers and then selling these products at competitive prices, much like Amazon or eBay does.

In order for this business model to be successful, the retailer must have good relationships with their suppliers because they ultimately control everything: prices, payment terms, shipment dates and product availability.

If your ecommerce business follows the above business model, you know all too well how important it is to maintain a good rapport with wholesale distributors. But how do you establish these types of relationships and ensure that they continue on the right track?

Here are some tips for building strong supplier relationships that will set your online business up for success:

Pay on Time

You wouldn’t feel comfortable selling your products to consumers without paying first, and your suppliers feel the same way. They are operating a business just like you, and they deserve to be paid on time and as expected.

Wholesale distributors often operate on thin margins, so the cash flow they get from their orders is essential. When they see that a retailer pays on time as promised, the distributor views them as a valued customer that they want to continue doing business with.

In fact, some distributors will enter their customer’s information into customer relationship management software (CRM) and rate them on how well they pay. If you pay on time and get better ratings, you may be able to score more competitive prices on products as well.

Sometimes, things do happen. If you foresee that you won’t be able to pay your bill on time, reach out to the supplier and try to work something out. It’s better to be upfront and honest rather than waiting to receive overdue bills.

Share Key Business Information

Communication is good for any relationship, and that includes the ones you have with your dropshipping suppliers. Wholesale distributors have many customers that they work with, so it helps to share some vital information about your business. This way, your distributors can better understand what you do and what you expect from them.

For instance, keep your suppliers in the loop about changes in staff, special promotions that you’re running and new product lines. You may also find that by sharing this information, the supplier can fill in the gaps with services they offer that you may not be aware of.

Establish Clear Sales Expectations

Dropshipping suppliers want to know how much product you expect to sell in a given time period. This helps them better understand how much product they need to order themselves and what types of sales figures they can expect.

Communicate your sales expectations and try to avoid last-minute requests. While suppliers are sometimes able to fulfill them, it won’t improve the relationship if you’re constantly under- or overestimating your sales figures and then asking for things at the last minute.

Gather the Right Documents

It’s a good idea to learn early on what types of documents your dropshipping suppliers need from you. This will improve efficiency and reduce miscommunication. It also speeds up order processing and shipments. For example, some suppliers like to have spreadsheets emailed or faxed with every order. A large manufacturer selling direct from their warehouse may prefer orders to be placed over Electronic Data Interchange (EDI).

Strike Up Real Conversation

Though emails are a fast, efficient way to communicate, it’s not a substitute for face-to-face interaction. The occasional phone call is important; it allows you to get a better idea of who you’re working with and what your needs are. Don’t hesitate to invite members from your supply team to company functions. Those three-legged races at the company picnic don’t win themselves!

You can also squeeze in face-to-face interaction by visiting the offices of your suppliers or meeting them for coffee or lunch. View your suppliers as advocates for your business. You just never know when your suppliers could end up becoming loyal customers and brand advocates for your business too!

Be Prepared for Mishaps

When it comes to ordering products, nothing is an exact science. There will always be issues with manufacturing, inventory, shipments and more. Many of these issues are out of the hands of suppliers, so it’s important that you remain patient if they do occur.

Your supplier relationships are critical in the retail world, be sure not to damage them when things go wrong. You can have a great product or service, but if you don’t maintain good relationships, your brand is going to have a difficult time thriving.

If you work towards developing positive relationships with your suppliers, you’re more likely to enjoy better pricing, flexible terms and even amenities like the occasional buyback. Your suppliers will also be more comfortable supporting you with extra inventory if you need it and better product availability.

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