The Ultimate Guide to Dropshipping: How to Start a Dropshipping Business

August 12, 2019 7:20 PM — Posted by anaheimsigns — Posted at Anaheim Signs ,Sign Company ,Sign Design ,Sign Installation ,Sign Manufacture ,Sign Shop

You’ve decided to launch an online store and join the ecommerce revolution. The very first questions you need to answer are all about your product: what will you sell, where will you get it and how will you get it to your customers. Amazing marketing and incredible customer service won’t get you very far without sourcing, inventory management, order fulfillment and shipping processes in place.

Does that sound intimidating, boring or even impossible? You may want to skip the hassle and check out dropshipping.

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Before dropshipping, there were two major ecommerce models:

  • Make a unique product from scratch. Do you love knitting cashmere cat sweaters? Great! You’ll have a completely unique product to bring to the marketplace. But can you create demand and scale your business?
  • Purchase inventory in bulk. You won’t need to develop a new product, but you might get stuck with a garage full of widgets you can’t sell. If you do get traction, you’ll need to tackle fulfilling and shipping orders on your own.

With dropshipping, you are only responsible for marketing and selling the products. Another person in the supply chain worries about product, inventory, packaging and shipping. But that means rather than finding efficiencies in the system, you’ll need to get very clever to take on Amazon, big box stores and other dropshipping ecommerce stores.

Want more tips on how to be a successful online retailer? Check out this webinar series.

The Pros & Cons of Dropshipping

Dropshipping can sound like a magic bullet for making money online, but don’t be fooled. Like anything else, there are upsides and downsides to dropshipping.

The Pros:

1. No startup capital. If you’re just getting started, dropshipping lets you launch without investing a lot of money. Traditional retailers need to buy and store inventory in order to sell it to consumers. But if you’re using a dropshipper, you can offer a full catalogue of products with little overhead.

2. Less hassle involved. As mentioned above, you don’t have to deal with on-hand inventory, which means that you don’t have to handle packing or shipping either. This lets you focus your time and energy on marketing and growing your business.

3. You can easily expand your offerings. If you want to expand your offerings, dropshipping is a great way to test new products with your audience. This will allow you to truly see if they’re a market fit without having to invest in large amounts of expensive inventory up-front.

The Cons:

1. Managing the logistics. The logistics for dropshipping can be hard to overcome as your business expands. If your dropshipping supplier relies on multiple warehouses, this will be even more of a challenge. Poor logistics management can lead to a subpar customer experience, due to improper tracking numbers, incorrect addresses and shipping delays.

2. The low barrier to entry. This sounds like a positive, and it is. But at the same time, because of the low barrier to entry, plenty of other people will be selling the same products. This makes it harder to stand out as a new business and means there’s stiff competition. Remember, if a supplier dropshipping for you, they’ll dropship to anyone, and that makes it tough to stand out.

3. No control over the packaging. If you’re an online-only store, the very first physical interaction you have with your customers is when they open their purchase. But if you’re dropshipping, you give up control over the packaging. That means no special touches or cute thank-you cards that can really make your store stand out. These days most reputable dropshippers will at least allow for private label shipping with customized invoicing and packing slips.

4. Tight profit margins. It’s very difficult for small businesses to compete on price, and the nature of dropshipping means you aren’t selling a unique product. Make sure you are ready to invest in something that will differentiate your store, like great educational resources, strong copywriting, or building a unique niche market.

Avoid These Common Dropshipping Mistakes

After you’ve decided to start dropshipping, you need to make sure you’ve got a solid strategy in place from the get-go. And that means avoiding these common mistakes.

Expecting Your Products to Sell Themselves

As mentioned above, dropshipping automatically puts you in a competitive space, because others are selling exactly the same thing that you are. It’s all too easy to think that you’ll be able to set up dropshipping for your store and then have an instant money-maker on your hands.

The opposite is true — when you’re dropshipping, you need to put all of the time that you save on shipping and fulfillment into marketing and SEO. Those are the elements that will drive traffic to your store and make you sales when you’re a dropshipper.

Since you can’t control the fulfillment or packaging with dropshipping, you always want to put a priority focus on quality customer service and giving customers a positive experience with the parts of the buying process that you can control.

Relying Too Much on One Supplier or Not Testing Suppliers

If you rely on one supplier without having a back-up, you’re setting yourself up for logistical issues down the line. What if they raise their prices to a point you can’t afford? Or go out of business? Or simply decide not to work with you any more? Even on the less drastic end of scenarios, they could be out of stock on a product and have no idea when they’ll get it back in stock. Always have a backup supplier that you can turn to if your go-to supplier doesn’t work out for a particular order.

Every time you start working with a new supplier, you should make sure that they cut the mustard by placing test orders. When you get the order, examine it closely, considering the packaging, shipment time and so on, and make sure that everything is top-quality. It’s a good idea to continue placing test orders on a somewhat regular basis. Fulfillment is critically important to any online business, and you want to catch any slips in quality before they become an issue.

Stressing Over Shipping Rates

Dealing with shipping rates can be a hassle, even if you ship all your orders from one location.

If you ship from more than one warehouse, or dropship through multiple suppliers, it can be a nightmare. What if an order draws on two different warehouses, or three different suppliers?

Instead of stressing about multi-location shipping on every single order, take a step back and look at the big picture. What are you trying to achieve? Accurate shipping rates? Or more sales, happy customers, and repeat business? If you’re burning energy over shipping prices on every single order, that’s energy you’re not spending on creating a better shopping experience, growing your store, marketing and so on.

So what should you do instead? Take a look at past orders and use them to work out a flat shipping rate. Or perhaps a tiered rate based on cart value. Will it cut into your profit margins?

Yes, on some orders. But you’ll come out ahead on others, and if you’ve set your flat rate properly, shipping costs will even out over time. There’s also the fact that flat rate and free shipping has been shown to increase conversion rates—one of the main reasons customers abandon their shopping carts is because of shipping costs. A flat shipping fee removes confusion and seemingly “hidden” fees that show up at checkout.

As you can see, dropshipping isn’t a one-size-fits-all solution, but it can be a great way to start or scale an ecommerce store. At every stage of your business, you need to step back and evaluate whether or not dropshipping makes sense for your store.

Dropshipping on Amazon

One place dropshipping has thrived in the past is Amazon. If you want to sell product on the platform, you’ll need to be responsible for making sure orders are shipped and stored properly by yourself or the wholesaler you’re marketing products for. You also must be transparent about who created the product and who seller is.

According to Amazon, although dropshipping on the site is acceptable, sellers must be as transparent as possible so the customer knows who they are buying a product from and where they can contact if there’s an issue. The seller and marketer must also be responsible for processing and managing returns without Amazon’s assistance.

For businesses that don’t want to pay warehouse costs, Amazon offers an FBA (or Fulfilled By Amazon) service where vendors can ship products through the them. However, the seller of the products is still transparently listed as the dropshipper and products are not affiliated Amazon.

With the FBA program, Amazon receives a client’s products in bulk. They will then warehouse the bulk safely in their own locations and use their own service to ship to customers on behalf of the vendor. Amazon has also partnered with Shopify so that its ecommerce clients can also take advantage of the service and avoid warehousing.

According to Oberlo, this service has a number of benefits, like low warehouse costs. However, it’s also heavily regulated by Amazon so there’s not much wiggle room to adjust Amazon’s pre-set dropshipping process.

For example, dropshippers must follow FBA policies including one which states they cannot purchase products from another vendor and re-sell them under their own name.

Dropshipping on eBay

With the auction site. eBay, you can create an account and business listing and then start selling or auctioning off your products.

While it’s easy to list and sell your or your wholesalers products on eBay, vendors do have to pay various fees, such as Final Value Fees, which eBay describes as a percentage of the total purchase. This total purchase amount includes shipping but excludes sales tax.

Additionally, while eBay allows dropshipping, its process is also regulated. While you can sell items from a wholesaler, you can’t purchase the same items from another eBay seller and then resell them as your own. They still also require similar levels of transparency so the seller of the item and contact information is clear. Like Amazon, the seller must deal with any returns, order management, or any product complaints.

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The ultimate guide to DropShipping

So you’ve heard about DropShipping and you’re wondering if it would suit your business. Maybe you’ve started researching different ways to start your own business and you’re wondering if it would be a good option for you. Whatever has brought you to our guide to DropShipping, welcome along! We’ll guide you through everything we can think of that we get asked regularly – and a few other things you might not have thought about too.

The ultimate guide to DropShipping Summary Image Avasam

What is DropShipping?

What is DropShipping

Let’s start with the basics. If you’re new to retail or eCommerce and are wondering what DropShipping is, here’s a short definition:

DropShipping is a direct to consumer retail fulfilment method where a seller does not hold stock.

That means, in plain English, that a retailer or seller sells products, but doesn’t have a warehouse or have any stock. The seller just sells – they direct their orders to a supplier who send the order on their behalf.

To break it down step-by-step:

  • The customer places an order, and makes payment – either on the seller’s eCommerce website, a marketplace or in-store.
  • The seller immediately places an order for the item with a supplier, and makes payment.
  • The seller pays the supplier for the item (including delivery costs).
  • When payment has been received from the seller, the supplier processes the order and sends the item to the customer.

Customers shopping online may not know (and indeed in most cases, won’t care) that their order is being fulfilled this way.

DropShipping isn’t restricted to eCommerce sellers though. High street retailers are starting to expand their offering by engaging with DropShipping suppliers. When customers place orders in-store (with the benefit of being able to get advice and assistance from sales assistants) and payment has been taken, the supplier dispatches the order either directly to the customer’s home, or to the store for collection. The retailer makes additional sales, and the store (and the wider high street) benefits from additional footfall and impulse purchases, while the customer is more confident they have the right product.

Is DropShipping allowed?

We understand why some people think DropShipping sounds like it could be a scam. But legitimate DropShipping is absolutely allowed, and a real, viable option for sellers. There is, however, a procedure called retail arbitrage which is not allowed on many marketplaces. This is where a seller takes money for a product they don’t own, and don’t have access to sell it arranged with a supplier. Once they have the money with them, they find a listing for a lower price and pay them to send it to their customer. This is different from DropShipping because essentially, you’re ‘stealing’ a sale from someone else and making money on it. With DropShipping, the supplier doesn’t want to deal with the customer – they simply want to get paid and send the order! That’s the bit that you’re taking care of when you’re legitimately DropShipping.

If you search for retail arbitrage, there’s a lot of links telling you it’s possible and that you can still do it. However, we know of sellers who have had their seller accounts disabled on several marketplaces because they were practicing arbitrage. We don’t recommend using arbitrage as a strategy – fighting to get your account reinstated can be a huge challenge, and ultimately, you may be left without your account on that marketplace.

Key DropShipping terms

key dropshipping terms

OK, so there’s lots of terms you’ll need to know when it comes to eCommerce and specifically DropShipping. Here are some of the main terms:

Manufacturer: The company that actually produces the product. A manufacturer may also act as a supplier.

Wholesaler: A company that buys from a manufacturer and stores it for sale to retailers.

Supplier: Similar to a wholesaler, a company that buys from manufacturers and ships products to customers for sellers.

Seller: A person or company that lists items for sale on different platforms.

Marketplace: A website that hosts sales for sellers. Examples include eBay, Amazon, Wish, Groupon and so on.

Shopping cart: A solution for eCommerce websites. Examples include WooCommerce, Magento and Shopify.

Pros and cons of DropShipping

Pros And Cons of Dropshipping

Although DropShipping is a brilliant option, it isn’t a one-size-fits-all solution for everyone – so it might not be for you. (If you decide it isn’t right for you – maybe right now, maybe ever – take a look at our low investment business ideas blog for more inspiration!) There are lots of reasons it might not suit you – whether you’re already in business or not. We’ll take a look at some of the advantages and disadvantages of DropShipping to help you decide next.

Advantages of DropShipping

There are loads of reasons DropShipping is a great method of making sales. Here are some of the main ones we hear people talk about the most.

Easy to start

If you’re able to find a great solution to help manage your DropShipping business, it can be incredibly easy to start. A well-designed platform will help you ease into selling, and means your business runs efficiently immediately. If you start out without a solution, trying to implement a solution down the line might end up being tricky.

For suppliers starting DropShipping orders, once their technology solution is in place, suppliers benefit from DropShipping sales with no extra effort. They don’t have to create and manage an eCommerce presence, deal with customer support or with marketplaces – they just pick, pack and dispatch the orders as they arrive in their system.

Low risk and low cost

Many people tell us they’re put off starting their own business because of the chance of failure, or because costs are too high. With DropShipping, there are relatively few costs – and usually these are limited to software or platform subscriptions. Risk is also significantly reduced, since there are no requirements for warehouse space or investment in stock. This means that DropShipping becomes a viable way to start a business where other options are unsuitable.

For many suppliers, setting up a direct to customer eCommerce presence would take up more resources than they are willing to invest. By fulfilling orders from sellers, they are able to increase their sales and profits more efficiently, without needing to invest in their own eCommerce presence. That’s because their sellers are taking care of the marketing and promotion of the product, so they don’t have to. Their sellers also take care of customer service, meaning that suppliers don’t need to invest in additional staff to take care of that either.

Flexibility

Many modern businesses start as an experiment to complement existing businesses, or as ‘side hustles’ aiming to supplement income. This means that flexibility is crucial to the success of the business. Luckily, a DropShipping business can be managed anywhere with a reliable internet connection. Since ‘trading hours’ are 24/7, 365 days a year, as long as customer service is handled promptly, there is no reason sales can’t be handled from anywhere in the world. With a good DropShipping system, sellers should be able to engage with unlimited numbers of suppliers. More suppliers means that the potential to scale up their business, with potentially infinite numbers of products, is limited only by the amount of time they are willing to invest.

Suppliers can benefit from the flexibility of DropShipping too. Since they control how many sellers they are going to work with, they can use DropShipping to scale up their business at the rate that suits them. They can choose what to offer through the DropShipping setup, from their entire inventory to just a few items. They can also take advantage of offering attractive mixed order options to help clear dead stock – which may be particularly lucrative for bricks-and-mortar retailers.

Easy to manage

Once an automated system is in place, DropShipping is very easy to manage for both sellers and suppliers. There should be little need for interaction between seller and supplier, and automation means that human error is almost eliminated. Generally, a good system will allow for sellers and suppliers to integrate with multiple marketplaces, and automate everything from the purchase through to shipping dispatch notifications.

Disadvantages of DropShipping

Although there are lots of advantages to DropShipping, there are some disadvantages that you might want to consider – especially if you’re looking to use it to diversify an existing business. Let’s take a quick look.

Low margins

We’ve put this first in the list of disadvantages because for most people, it’s the biggest hurdle to overcome. Since the margin on each product is smaller, sellers need to sell a lot of products. This can be mitigated in two ways:

  • To make sales, sellers need to focus on creating great content for each listing and marketing themselves. In the beginning, much of their profit might be invested in paid adverts, or PPC (Pay-Per-Click) adverts. Once they begin to build their sales and get recognised as a good seller, it can get easier.
  • Sellers can focus on higher value items, with a higher margin. It’s more difficult to find the right supplier, but the potential benefits mean that you can make a decent living from the margins while making a sale or two a day instead of trying to make 300 sales a day. Because of that, the customer service burden is much lower too.

Less competitive prices

When a traditional, bricks-and-mortar seller deals with a supplier, they are typically offered wholesale prices. That means the more they buy in one transaction, the lower the price per unit. With DropShipping, suppliers don’t typically give their sellers those preferential prices. That means sellers pay more per item – which contributes to those low margins we just talked about. Some suppliers will recognise volume of sales however, and give highly successful sellers a better rate once they have been working with them for a while.

Stock reliance

While DropShipping is incredibly flexible and allows sellers to react to trends in sales, it does mean that there is the potential for sudden stock shortages. Sellers are dependent on their suppliers having enough stock to fulfil their orders. If there is a sudden spike in demand for a certain product when their supplier is out of stock, sellers might end up being unable to take advantage of the trend. This risk can be mitigated by engaging with several suppliers, so that if one is out of stock, orders can be sent to another.

Huge competition

If you’ve searched DropShipping online (as you probably did to find this article) then you already know there are thousands of pages talking about it. If you search ‘how many dropshippers are there’ or similar online, you’ll find it hard to get anything like a straight answer –because the number constantly fluctuates. Small sellers start up and cease trading daily, and the number of DropShipping suppliers worldwide changes as regularly as businesses start offering it as an option or stop. But, suffice to say – there’s an enormous amount of competition. That doesn’t mean sellers should be deterred though! Rather, they should look to invest time and effort into their strategy, to ensure their listings, and their business stands out.

These might be the downsides to DropShipping, but the issues they present can be minimised, so don’t let them put you off. If you’re choosing from the right suppliers, you’re less likely to encounter these issues. Dealing directly with manufacturers, brand owners and wholesalers means you’re not dealing with unnecessary middle men. You can also eliminate the issues of dealing with suppliers from overseas that may have issues communicating clearly in good English, or who have different ideas about what ‘good’ customer service really is. We know some sellers who have tried to buy items from marketplaces such as Amazon and eBay, with a view to make money on those items. But since they were buying at retail price, those sales were scarce because customers would go directly to where the product is cheaper – on the same marketplace they bought from! Going directly to the source of those products is key to making sure your margins are the best they can be.

The key to successful DropShipping is reliable suppliers, situated geographically close to your customers. By using a platform like Avasam, you can connect directly with the right suppliers, and source the best products for you and your customers. Look for a platform that also automates all your DropShipping processes, and connects with marketplaces, shopping carts and shipping providers, without you needing to pay for additional functionality. The ideal platform does everything you need – from sourcing products to shipping to helping you grown, and frees your time so you can sell more.

Methods of DropShipping

Methods of Dropshipping

There are different ways to set up DropShipping arrangements, and each one may be appropriate depending on the type of business you have. We’ll look at the most labour-intensive methods first before getting to the most straightforward ways of DropShipping.

Manual DropShipping

This type of arrangement takes the most effort, but may suit bricks-and-mortar retailers who occasionally get requests for specialist items. It might suit car parts specialists, for example, who may not need to keep a part for a vintage vehicle in stock, but may need to help a customer find a particular part every now and again. When the retailer takes the order, they place the order with their supplier by phone, fax or email. When the supplier agrees, they take payment from the retailer, before sending the item to the retailer or the customer directly. Note how there’s no automation here – it’s all done manually, business to business. There’s a lot of scope for human error, and it will take quite a lot of time.

Semi-automated DropShipping

This is where a supplier might make their products available to sellers by providing their inventory as a file that can be downloaded from a shared location and imported to the seller’s system. The file needs to be updated on the seller’s system regularly. Orders may be made by file uploads, but there are still huge chances of mistakes being made – especially where sellers are less technically competent.

With a proprietary DropShipping system

Some suppliers have invested in their own DropShipping platforms, so sellers can connect to their inventory and place orders with them. It’s a lot more automated, but there are drawbacks. If you know you’re definitely only ever going to want to DropShip orders from one supplier, this might work for your business, but if you want to engage with several it might be trickier. You might find you need to engage with several suppliers, and adding multiple suppliers to your existing system might require the support of a developer.

Completely automated DropShipping

Completely automated DropShipping can be done using specially designed platforms. The best are designed to automate absolutely everything – from finding suppliers with the right products, to connecting with online marketplaces and sending shipping updates. By using these platforms, you’re not tied to a specific supplier – you can engage with as many as you like. There’s usually a cost associated with automated DropShipping platforms, but subscription costs are usually small in comparison with the sales they create for your business.

How much can you make DropShipping?

How much can you make Dropshipping

Again, it’s difficult to give a direct answer, because there are so many variables. It can depend on what your niche is, how many items you sell, and how much your margins are. If you are not currently employed, and you can put all your time and energy into planning and building your business, you can write your own paycheque!

Is DropShipping worth it?

This question is very subjective, and depends on you and what you’re hoping to achieve from it. If you’re aiming for a business that can make you some extra money as a side hustle – yes, absolutely it can be. It’s a flexible way to earn extra money in the gaps of time in your life – so if you’re saving for a house, extra travel and so on, it’s a good option.

If you’re looking to find a way out of your current 9-5 grind, DropShipping can help you get there too. Full disclosure though: it won’t be a quit immediately situation, or even inside a month. You’ll need to build your business gradually during evenings and weekends, and perhaps your lunch breaks too. The reward will be sweet though, once you have a solid business and you can finally submit that resignation letter!Imagine the feeling of knowing you won’t have to do that commute, or report to that manager again… If that doesn’t inspire you to get started, we don’t know what will!

If you’re looking for a ‘get rich quick’ plan then DropShipping might not be worth it for you. DropShipping can be easy, once you’ve got your system or platform in place and you have your processes perfected. But to get to that place, and to be making sales consistently, you’ll have to invest a lot of time and effort. Depending on your niche and what you’re actually selling, it might be years before you’ve perfected your business strategy and are exceeding your targets.

Starting a DropShipping business

Starting a DropShipping business

Starting a DropShipping business might seemdaunting, especially if you’ve not had experience selling or you’re not confident with technology. That doesn’t mean you should be put off completely though! You just need to make sure you get the right tools, and do enough research so you can learn as you go.

Especially if you’re brand new to selling, we recommend using a platform like Avasam for the most streamlined experience. You can go ahead and create your own setup, but without developer skills and knowledge of API connections, you might find it tricky, or time-consuming.

Who can start DropShipping?

Literally anyone can start a business DropShipping! There’s no restrictions – although under 18s in the UK can’t have a business bank account or get credit. That means teenagers will need the support and guidance of their parents or guardians to develop their business. If you’re reading this and are under 18 and thinking about starting to sell, great – we applaud your tenacity. We don’t recommend abandoning your education, (in fact, quite the opposite – we advise you to learn as much as you can!) but if you’re looking for work experience, to start a business so you’re ahead when you leave school or you just want to earn some money, DropShipping can be a good place to start.

Outside of UK teenagers, it doesn’t matter who, or where you are – as long as you have an internet connection and a PC or mobile to work on, you can start DropShipping! The main thing is that you can use a PC or mobile device well enough and can put enough time in to build your business. You don’t need to be in the same country that you’re DropShipping to either – you could be selling in the UK but living in Australia, or selling in South America but living in Japan… The flexibility of DropShipping is one of the major advantages of the business model, as we’ll discuss later!

Who is DropShipping not suitable for?

Who is DropShipping not suitable for

DropShipping is a great option for setting up your own online business, but it isn’t right for everyone. Here are a few cases where DropShipping might not suit the individual:

Brand focused entrepreneurs. Creating a brand that customers become loyal to can be tricky. Building a brand that using DropShipping can be even harder! There are so many parts of the customer experience out of your control. If your supplier goes out of stock suddenly, you may need to cancel customer orders. You don’t have control over the customer experience – you don’t get to influence packing or shipping options. If you’re promoting a luxurious image, but orders turn up in a brown cardboard box, customers may opt for a cheaper competitor in future. With Avasam, you have greater control over out of stock levels and working with reliable suppliers – but even with Avasam, selling online isn’t for everyone.

Entrepreneurs aiming for high margins. DropShipping can disillusion entrepreneurs because the margins on each product can be so low. With traditional DropShipping items and suppliers, gross margins can be up to 20%. After paying transaction fees, marketplace and shipping fees and so on, profits on each item can end up being tiny – especially on lower cost, trending items. There are some online sellers who are making over £1 million, but their businesses are only making £40-£50,000 in profit. That’s why it’s so important to find your niche, and ensure it’s profitable before starting.

Non-creative marketers. When selling online, you start out as a small fish in a very, very big ocean. You could undercut and reduce your margins to fractions of pennies, but even then, you’re up against it. Other businesses might outperform you simply because they are the supplier themselves, and have years of great reviews. That means you have to be incredibly creative in your marketing. If you’re hoping to rely on Google Ads or Facebook Ads, you’re not going to succeed. You’ll need to find out where online your target customers are, and how you can appeal to them. That involves significantly more work – potentially creating your own images, videos and so on. If that doesn’t sound like you, there are ways round it – you might work with freelancers to create video, for example. But that cuts into your margins, so it might not end up being viable long-term. We’re not saying if you can’t do those things that you shouldn’t try – absolutely not! But just be aware that you might need to invest more time and energy into your sales campaigns.

We say it a lot, but for good reason: do your research. Figure out what you want to achieve by creating your business. Once you’ve done that, you can decide for yourself whether DropShipping is worth it for you or not. If it isn’t, you can find other business inspiration here – and we wish you the best of luck with your endeavours!

How to find DropShipping suppliers

How To Find Dropshipping Suppliers

When you search online for ‘DropShipping suppliers’, you’ll find lots of links to overseas suppliers. While DropShipping from China (and elsewhere) can be a solution, we hear lots of reports of difficulties. Issues include misunderstandings due to language barriers, time zones causing delays in communication and long delivery times, and just a lack of accountability in general. We’re not saying that DropShipping from China isn’t a good idea – we know some sellers make great profits from it. We’re simply providing you with information we hear about, so you’re fully informed.

These issues aren’t the only complaints we hear, but they’re some of the biggest concerns that deter sellers. Not only that, there’s thousands of middlemen and scams around DropShipping. The importance of the supplier means many potential sellers, after doing research, decide not to pursue creating a DropShipping business. There’s just too many variables that mean they could end up out of pocket.

The good news is that doesn’t have to be that way. Many suppliers can be found in person at trade events. If you can’t make one of those, here’s a few ways you can avoid the scam artists when doing your research:

Real suppliers won’t charge fees that don’t directly relate to the service.

There’s a few reasons a supplier might charge you, but they won’t charge you fees simply for doing business. There’s a couple of reasons you might expect to be charged though:

  • Supplier directories may charge a fee to access their information and feeds. It is possible to create a business without using supplier directories – you just might need to do more research.
  • Some suppliers have minimum order sizes. That means you may need to make some up-front payments, so you have some credit for your orders. As your business builds and you show your supplier that you’re reliable, they may provide a credit account for you. This is at their discretion though, and you should not assume that it is always possible.
  • Per-order fees are standard and expected by many suppliers.

Suppliers don’t usually deal with the public.

As a seller, you’re going to need wholesale prices in order to make a profit on what you’re selling. Otherwise customers will simply go straight to the supplier and get the better price – you would, wouldn’t you? A reliable supplier might have their own eCommerce presence, but they will have wholesale prices available to sellers. If a potential supplier is offering wholesale prices to the public, they’re simply a seller. That’s fine, but working with them won’t be worth it for you.

There are exceptions to this rule, but they’re rare, and usually relate to a supplier that has grown from a seller, and retains a small presence in a particular niche.

Reliable suppliers are contactable.

If you find a website for a supplier where there are no phone numbers, use caution. Most reliable suppliers will have a phone number that is manned during office hours as a minimum. They want your business – otherwise they don’t make money.

When looking at their website or email communications, check their work. The odd typo is inevitable in a busy business – but if their email and website is full of mistakes, again, be careful. Similarly, if they take days to get back to your email and have vague excuses for why, alarm bells should sound. Also, be concerned if they won’t give you a firm agreement on the cost. Whether a single cost, or a banded structure based on how many you sell, if they won’t commit, why should you? It’s not unusual to renegotiate periodically, but how can you plan your prices without knowing your business costs, and make a profit?

Great suppliers are very happy to prove they’re great at what they do. When speaking with a potential supplier, ask them for a reference. If they can’t give you names of businesses that they have worked with, there’s likely to be a reason for that.

At this point, you might be wondering… Is there an easy way to find a DropShipping supplier? The good news is, yes!

The easy way to find DropShipping suppliers

The Easy Way To Find Dropshipping Suppliers

Your business selling is dependent on your suppliers. That means it’s critical that you find good ones! However, it’s traditionally been difficult to find reliable suppliers – particularly if they’re overseas. If you search online for ‘DropShipping supplier’ you’ll find thousands of pages promising great service, prices and so on. But there are also scam pages out there – we reckon there’s more scam pages than reliable suppliers!

If you’re looking for reliable (often, but not exclusively UK-based) suppliers, you can find them at trade events. We have often been in attendance at Spring Fair and Autumn Fair,where we meet great suppliers, but there are plenty of other events too.

If you’re searching online, it’s definitely worth checking UK suppliers on websites like Trustpilot. Although you might encounter complaints on these pages,consider what the complaint actually is. It might be something that is unlikely to bother your business.

The key to finding reliable sellers (that you don’t have to wonder about!) is knowing where to look. Not only that, if you have the right system, you can use more than one supplier with no problems.

You might think we’re selling ourselves a bit here (we are!) but with Avasam suppliers, questions about reliability are reduced. We’re not promising that our suppliers are all 100% perfect, 100% of the time – humans are involved, after all! But our Avasam Verified Supplier Programme, makes it easier for sellers to find the products they are looking for, with assurances about the service on offer. We have strict criteria for suppliers to be awarded Avasam Verified Supplier, and even stricter for Avasam Verified Platinum Supplier status. Considerations include order delivery time, English-speaking support staff, low dispute rates and so on. Because our suppliers are all UK-based or close by in Europe, there are less chances of problems with communication, service levels and so on that get reported with ‘from China’ DropShipping setups.

Which marketplaces are best for DropShipping?

Which Marketplaces Are Best For Dropshipping

Again, there’s no right or wrong answer here, because it really does depend on your niche and where your target customers are. But here are the 10 most popular marketplaces with Avasam users:

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You can see who we've worked with near you that you might know for a reference by browsing our hierarchical portfolio directory below. For local sign shop, cities we serve include Anaheim, Carlsbad, Corona, Costa Mesa, Downey, East Los Angeles, El Monte, Fontana, Fullerton, Garden Grove, Glendale, Hollywood, Huntington Beach, Inglewood, Irvine, Long Beach, Los Angeles, North Glendale, Norwalk, Oceanside, Ontario, Orange, Pasadena, Pomona, Rancho Cucamonga, Riverside, San Bernardino, Santa Ana, Torrance, and West Covina. For local sign company, cities we serve include Anaheim, Carlsbad, Corona, Costa Mesa, Downey, East Los Angeles, El Monte, Fontana, Fullerton, Garden Grove, Glendale, Hollywood, Huntington Beach, Inglewood, Irvine, Long Beach, Los Angeles, North Glendale, Norwalk, Oceanside, Ontario, Orange, Pasadena, Pomona, Rancho Cucamonga, Riverside, San Bernardino, Santa Ana, Torrance, and West Covina. For local sign maker, cities we serve include Anaheim, Carlsbad, Corona, Costa Mesa, Downey, East Los Angeles, El Monte, Fontana, Fullerton, Garden Grove, Glendale, Hollywood, Huntington Beach, Inglewood, Irvine, Long Beach, Los Angeles, North Glendale, Norwalk, Oceanside, Ontario, Orange, Pasadena, Pomona, Rancho Cucamonga, Riverside, San Bernardino, Santa Ana, Torrance, and West Covina.
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