For some who are starting an online business, finding the right drop shipping wholesalers to develop an eBay or other e-commerce venture, might be the most important decision you'll make.
When considering a business relationship with a drop shipping wholesaler, you don't have to deal with manufacturing or stocking products. This is great if you don't want to do a lot of work in your online business. But it can also be messy, as you have no control over order fulfillment.
This is how many entrepreneurs who do business on Amazon and eBay operate as retail store fronts. They simply show products they feel are good sellers, transfers customer orders and the shipping details to their manufacturer or wholesale partner, and let them ship the goods directly to the customer. In Amazons case, these sellers
are known as affiliates.
As the retailer in dropshipping, you make a profit on the difference between the retail price you set and what the wholesaler charges. Of course, since you're not doing the product production and or handling other aspects of product development, drop shipping usually is a little less profitable.
Still, many make a great e-commerce business out of drop shipping, despite the many myths that scare some people away from this type of operation. Let's discuss the myths and realities surrounding the aspects of dealing with drop shipping wholesalers.
Drop shipping is a scam!
Very little in life is all good versus all bad. So when it comes to doing business with drop shipping wholesalers, you have as equal a chance of running into a good one as a bad one. Unfortunately, there are some businesses out there that don't even supply a product.
They take your money, claiming to be drop shippers, and you (or your customers) receive nothing in return. To steer clear of this, you need to research who you are buying from prior to sending a payment. It's that simple. Google the company and read reviews and customer feedback to get a sense of the company.
You need a membership!
Be wary of drop shipping wholesalers who insist you pay a membership fee. Most likely, if you are required to purchase anything, you should do business elsewhere. It's fairly unusual to have to pay any fees, unless they're associated with some custom, special order or shipping.
Now, there is a growing number of wholesalers (or their agents) online who are offering you an entire e-store website from which to sell their goods. Some of these have merit and require a membership fee to get your website selling their merchandise. But these "cookie cutter" websites will draw little traffic on their own.
But just do your homework before you pay anyone anything online.
If someone asks you to pay a licensing fee, be careful. When dealing with most drop shipping wholesalers, there is no reason for you to purchase a licensing fee. They're making a profit when you purchase the item in the first place - so why would you need to cover their licensing fee?
There should be no hidden fees. The only fees you should pay are for the product and its shipping period.
You must work off a list!
If someone in this business tells you that you have to work from a list of prospects, and that you need to buy the list from them .. then don't do it. Normally, these lists are quite old, out-of-date, and hold no value at all. It's just someones attempt to make some extra money off of you.
Additionally, you'll end up paying more fees and extra shipping, as some of these lists involve a middle man who holds no business value at all. Beware!
You don't need a contract!
Although it would be nice to not deal with paperwork, having contracts with drop shipping wholesalers is a must! Any company that's legitimate will agree to a contract and stick to it. Honestly, to protect yourself as a business, contracts serve that purpose and should always be the first step to any business move. Consider having a lawyer review the contact so you know what you're getting into.
If you had bad ideas about drop shipping before, hopefully this will reverse some of those thoughts. In other cases, your eyes may have been opened about what to watch out for. It's important to do your research, protect yourself and remember there are always a few bad apples among a bunch of good ones.
You can always check with others who are using the drop shipping wholesaler to see how their experience has been. Look for testimonials on their websites or try and locate current businesses working with the wholesaler and talk to the business owner.
Best Practices Report