Why choosing the right suppliers is important
Running a successful dropshipping store would require selling the best products alongside good customer service. Suppliers play a very key role in your business because they are the ones who will provide and ship the products to your customer. Even if your products are the best, attractive and in-demand people will keep off from your store unless you are having a quality supplier who plays his part very well. After you have made a deal with a supplier he becomes your business partner and if you are not keen on selecting one, you might fail.
There are so many ways of getting good suppliers in your niche. Here is how you will find and negotiate terms with them.
The first step is to choose the locations of your suppliers. Since you need to consistently meet your customer demands while maintaining the quality standards of the products, you have to decide whether you will source your products domestically or from overseas.
Each of the options has advantages and disadvantages. Knowing them, along with other more factors, will help you decide on which suppliers you will choose.
#Pros of choosing suppliers from overseas
- Relatively low manufacturing costs
- Efficient supply chain management systems
- Wide variety of suppliers
- You can find products that are not available in your country
- The suppliers can be found easily
#Cons of choosing overseas suppliers
- Higher shipping costs
- Intellectual property rights are less secured
- Longer shipment times
- Less control over your products
- Language barrier(sometimes)
#Pros of choosing domestic suppliers
- Reduced shipping costs
- Positive perception and greater support from your local community
- Intellectual property right protection
- Shipping to your customers is faster
- Higher control over your product
- Builds customer confidence towards your products
#cons of choosing domestic suppliers
- Limited choice of suppliers
- Local restrictions
- Limited product production
- Higher product costs
Before we proceed to the different ways of finding suppliers, we need to find the difference between Manufacturer, Wholesaler and Retailer.
#Manufacturers: These are the people who create your product. After they have created the product, they sale them in bulk to the wholesaler and retailers. Usually, they don’t sell directly to the public but a few of them do. If you can find a manufacturer and buy your products from him it will be better because they sell the products for lower prices than the wholesalers. This does not mean that wholesalers sell products at very high prices though. The difference between the prices is very minimal.
#Wholesalers : They buy products in bulk from the manufacturers and then sell them to retailers
#Retailers: Retailers sell products to the public. They source their products from either the manufacturers or wholesalers.
With that out of the way, let’s see how we can find the suppliers and start the business.
1.Use Google search.
You need to type in the product you want to find suppliers for followed by the word suppliers.
You need to list the suppliers and answer the following questions:
- What kind of product selection is the supplier offering?
- What is the minimum order quantity from the supplier?
- Can the supplier integrate with your e-commerce platform? This will make the order fulfillment faster and easier
- Where are the suppliers located?
- Does the supplier offer adequate support for their retailers (email, phone, etc.)
2.Know which supplier your competitors are using and see if you can reach them. If your competitors’ order and fulfillment process are easy, look for their supplier because they seem to be doing their work well.
3. Attend a trade show and see if the supplier attends them or source one from there. Many reliable suppliers often attend trade shows to showcase their products.
4. Reach out to product manufacturers. As a retailer, you can find manufacturers that will sell the product for you in bulk and also at a lower price. The problem with this approach is that most manufacturers will not ship the products to your customers. You, therefore, need to stock the products and ship them yourself to your customers. Alternatively, let the manufacturers recommend a supplier to you. Most of the suppliers recommended by manufacturers can be trusted.
5. Order samples for the purpose of validation. If you have gotten a supplier already, request him to send you a sample of the product. Samples will enable you to get the real experience of the product by yourself. Sometimes the reviews and testimonials provided online might be false or exaggeration. The best experience is usually a firsthand experience. You will also get to see how the supplier will be handling and fulfilling your orders.
6. Review contract terms and fees. You obviously want to choose a supplier that will meet your needs and also offering contracts with agreeable terms.
You should also be aware of fake suppliers who are looking forward to scum you. They might be the ones that will not deliver the products or the ones that will deliver low-quality products. You want to avoid these people because they will destroy the trust your customers have put in you. Here are 5 ways to spot fake wholesalers:
- They usually claim to give high margins.
Normally, the dropshipping business starts with low-profit margins to fight the competition. When a supplier promises to give you higher margins and make quick profits, he will probably deliver a low-quality product and cheap packaging or fail to deliver the product at all. This will frustrate your customer and demand a refund.
2. They refuse to provide samples.
When you request a sample from a supplier and yet he is hesitating to provide you with the sample or keeps postponing, stop interacting with them. However, this does not mean that a supplier who delays you ordered samples is a fraud.
3. They refuse to sign contracts.
The contract between you and your supplier clearly states the terms and conditions in your partnership. It also states the action that should be taken in an ambiguous situation. It is important to prepare a contract with the supplier before carrying out any business. If the supplier you have chosen refuses to sign the contract, just find another supplier. Waste no time further.
4. If they are lacking contact details
A supplier’s website is supposed to have some contact details such as an address, contact number and business email among others. If you notice that such information is missing on their website, think of how you will reach the supplier in a case where a customer reports a delivery problem to you. These details are very crucial.
5. If they are asking for monthly membership fees.
Legitimate wholesalers don’t charge fees for holding inventory. You normally pay in accordance with your order basis. Most of the suppliers who ask for monthly fees are likely fake. You need to look further when researching on them.
Nowadays, there are supplier directories that are different from suppliers. They ensure that suppliers who are interacting with retailers are legitimate. Most of them charge a one time fee or ongoing fee. You are not supposed to think that the directory is a fraud.
You are now probably confused about how to find good suppliers who will ensure a good relationship with your customers. The good suppliers are easily found through these five ways:
5 ways to find good dropshipping suppliers
1)They are centrally located.
Centrally located suppliers allow you to consistently promise faster delivery times, potentially saving money on the shipping costs. With centrally-located dropshippers, your packages can reach a lot of people within 2 to 3 business days.
2)They have support representative
Having a person who is responsible for solving your issues is really important. Problems may arise and resolving them may be very difficult. This is where you’ll need a representative from the supplier to take care of your issues.
3)They are supposed to have an elaborate staff
This should enable you to call a representative who is knowledgeable in the field you want help.
4)They should have good technology
Good technology plays an important role in data feeds, streamlining operations, online catalog, etc.
The efficiency of a supplier is seen in how they handle the orders, packaging, the time they take to ship your product and how they handle inventory.
Congratulations, you are now ready to set up your dropshipping store. It has been quite a long journey but all of it was very very important. Learning the first steps to starting a dropshipping business is key. Many people decide to set up build the store before the basics and then end up failing.