Dropshipping isn’t a new concept in business, but it is an effective method for order fulfillment that most retail customers are not aware of. Dropshipping is a term that many online sellers only use to sell on eBay and other auction sites. They then realize the benefits and potential of reselling these products. Many online sellers are able to realize the wide range of goods they can resell via dropship. This helps them move from selling unwanted household goods and clothing to improving their image and advertising new factory sealed goods. Some even open their own online retail shops.
Many people who choose this route will find the reselling relationship with their dropship provider to be long-lasting, profitable, and lucrative. However, for others, it will be a nightmare that could endanger their online business, reputation, and cause them financial ruin.
There are many horror stories. Many companies are now offering top-quality branded goods at ridiculously low prices to dropshippers. You may also find that they fail to deliver the goods or that the items they send are not what you ordered. This means that you will have to appease your angry buyer by refundeding their purchase price and their shipping costs. You will then be the one left with a bad reputation and out of pocket. If you place a few orders with your supplier, and none are fulfilled, you will have to pay your customers back. This could cost you a lot.
Dropshipping is easy if you know what to do to verify your suppliers. Although it is not bulletproof, there are a few steps that can help reduce the chance of costly disasters.
1. Dropshipping Suppliers Recommendations are the best. There are many dropshippers advertising online and all claim to have the best deals. However, it is the experience of others that will help you find the right one. Many ‘directory websites’ are available on the internet that offer free or paid lists of dropshipping businesses. While some sites may provide accurate information, others are owned by suppliers and list only their company details.
2. Contact Information After you’ve found a supplier who sells the items you want, make sure to check their contact information. Every legitimate business will encourage customers to contact them. That’s how you get more business. You should see contact information on the suppliers’ site, including a phone number, physical address, and e-mail. You should check if they have them. If not, give them a try. Do not submit any supplier website that has incorrect or insufficient contact information.
3. Terms & Conditions Dropship suppliers must clearly state their terms and conditions. It is highly recommended that you read them. It is important to understand your position in case of issues such as undelivered goods or defective goods. If you have any questions, please e-mail us. This falls under Business to Business contract legislation. In most countries, it will differ greatly from the laws covering Business to Public. You will therefore have different responsibilities to your customers than your supplier.
4. Registration and Subscription fees Dropshipping companies often charge resellers subscription and registration fees to access their catalog. This is a common practice and widely accepted. Most dropshipping companies will allow you to access the prices for a limited period of time if you contact them before you register. They may also e-mail you a sample pricelist. Be careful with sites that charge ongoing subscription fees. Make sure you only use the site for a short time and check the paperwork twice to make sure that you don’t sign up for a long term that could lead to unwanted membership.
5. Stock Levels and Dispatch Times Always ask about stock levels when you contact potential dropship companies. Many suppliers will display stock levels on their websites, but many are simply middlemen or agents who place orders only when there are enough orders from resellers that they meet their minimum order quantities. It could lead to unacceptable delays in your customers receiving their goods. This could result in you being forced to refund.6.
6. Accepted Payment Options There is a wide range of online payment options available, and each one has costs that must be accounted for in the selling price. These include PayPal, Nochex and Google Checkout. It is important to confirm the payment method they will accept. Dropshipping suppliers should expect payments in the same manner as customers. This will help you save time and money. Many suppliers from overseas will require payment via Wire Transfer or Telegraphi Transfer. This is risky without the protections that PayPal offers. If you don’t have a strong and trusted relationship with your supplier, it is best to avoid this method at first.
7. Branded Products A quick internet search will reveal countless websites offering designer clothes and top-brand electrical goods at a fraction off their retail prices. Dropship is possible. In short – Steer Clear. If you order the goods from a trusted supplier who has sourced close-out, refurbished or Grade B returns, you can almost guarantee that the branded or designer goods are fake. Reselling them could lead to the retailer facing the consequences of dealing with counterfiet goods.
8. Search Reviews After you have compiled a list of potential dropship suppliers, take some time to perform a quick search on the company names. You should see a few interesting listings. Usually, there will be comments or reviews posted in Forums and Blog pages by other dropship resellers. There are more negative comments than positive ones. Happy resellers will be less likely to write about their dropshipping supplier or tip off the entire world. However, the bad posts will speak for themselves and help you make a decision.
This checklist is not meant to guarantee success in dropshipping. It does not cover everything that you need. It is hoped that this checklist will help you avoid making costly mistakes when starting a business.