Posts Tagged ‘dropshippers’
Working With Dropshippers-What You NEED to know
Tuesday, October 30th, 2007
If you are thinking about opening an online store but don’t have a lot of money to invest in inventory, then dropshipping may be your answer. That means you only purchase inventory as your customers purchase them from you. A manufacturer or distributor keeps a large inventory of various products in their warehouse and does the shipping for you. However, like any business, working with dropshippers has its share of horror stories so it’s best to do your research and be prepared.
Once you know the types of products you’ll be selling it’s time to start making a list of potential dropshippers. Of course, there’s no reason you can’t work with several dropshippers at a time, each carrying a different line of products; but, it’s imperative that you thoroughly check the reputation, background and references of any dropshipper. There have been many instances of small dropshipping companies setting up shop, only to disappear months later-leaving their customers in a bind. You may be able to find manufacturers that are willing to dropship; however, most times that is only for oversized and expensive products. For most product lines, your best bet will be working with large direct distributor companies who purchase products directly from several different manufacturers-most who have been distributors and dropshipping for years. Typically, it’s not the manufacturers or large direct distributors that are unreliable, it’s the small distributors who are buying from the direct distributors-and all they’re doing is marking up the price!
Narrowing your search for dropshippers
But, rest assured, finding dropshippers is easier than you think. A great place to start will be on the search engines, searching for your product category, for instance, "pet products", and "dropshipper". Be sure to thoroughly research each dropshipper you are interested in by checking references and seeing if there have been any complaints about them to the Better Business Bureau.
After you’ve narrowed down your search to a list of dropshippers you believe are reputable, it will be time to start comparing product prices, dropshipping fees, ease of ordering and billing methods. Product prices will many times be very similar from dropshipper to dropshipper, so your main focus will probably be on fees, ordering system and billing.
Dropshipping fees
Every dropshipper will tack on fees to cover the handling of each order. They might add a flat fee to each order or a percentage fee of order total. These fees are in addition to the actual shipping charges. It would be in your best interest to make a chart using the same or similar product items and see what the actual fees charged from each dropshipper would be.
Ordering and billing
The way you place each order with a dropshipper varies greatly. With some, you will need to phone in or email the order; others may want you to fax it. However, the most convenient of all will be if the dropshipper has an online ordering system. Each order will take just a minute or so to input and many are compatible with Yahoo or other ordering systems so uploading your customer’s order to the dropshipper’s site is instant. Each dropshipper will have their own billing system as well-and don’t be surprised if they require a prepayment to begin. Most dropshippers will bill on a weekly basis, however some bill at the end of the month. You will also need to find out if they take credit cards or checks.
So, while other online retailers may have had problems with a select few dropshippers in the past, you now have enough information to make your search easier. Remember, the more research you do before working with a dropshipper, the fewer problems you will end up having.
Tags: advice, Carrie Hinkel, dropshippers, Product Sourcing, source, tips, working with dropshippers
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