Take Caution Before Purchasing Dropshipping Services
So now just about anyone can take advantage of real time inventory control techniques to get products to customers only when they need them. That’s where dropshippers come in. You set up your online storefront, a customer makes a purchase, and you transmit the order to the dropshipper who pulls the merchandise, packages it, and ships it to your customer. Presto, you’ve made a sale and you never even had to lay eyes on the product.
There are many advantages for sellers, the biggest of which is the fact that you don’t have to carry inventory. The dropshippers will do that for you. They get their products directly from the manufacturer and because they are buying in such large quantities, you can enjoy a significant price savings.
Dropshipping is not without its hazards. You much rely on the dropshippers to get your items to the buyers on a timely basis. You also rely on them to make sure that the quality of the products is what you expect. As you are looking for good dropshippers, be cautions of companies that attempt to insert themselves into the process. These companies are known as “middlemen” and they attempt to get a mark up on the products before they go to your customers. It can be difficult to spot these middlemen as their who goal is to appear to be a legitimate wholesaler. Key tip-offs are set-up fees and monthly fees to use their services. Legitimate wholesalers will not charge you these fees.
As most of us know, anytime an industry is thriving, particularly anything relating to the Internet, it becomes the target of scammers and other unscrupulous people. As a consequence there are a few other things you need to be on the alert for when you begin to think about tackling the dropshipping market. The first of these are lists and directories that are available. These lists may be sold under the guise of clubs or monthly services. Many of these services also sell your contact information so that you become the target of numerous other companies hawking their wares. Be sure to check out any service before you sign up. If it sounds too good to be true it probably is!
While it is a shame that we have to continually be on the alert for people trying to get the best of us and our money, all we need to do is be cautious and make sure we know what we are buying and from whom we are buying it. Yes, it is possible to make money using dropshipping. But it is also possible to be taken advantage of. Buyer beware.
Dropshipping Wholesalers: Looking for the Perfect Match
The concept behind using dropshipping wholesalers is a simple one. You take an order for a product through your website. You route the order to a dropshipping wholesaler and they send the item directly to the customer. These wholesalers get their products directly from the manufacturer. Because they buy in bulk, they get much better prices than you, as an individual seller can. They pass the savings on to you and you in turn, mark up your product and sell it on the open market.
The benefits for you as the seller are clear. You have no cost to carry the merchandise, you do not have to coordinate with the shipping agent, and if you have no sales you lose no money. At the same time, you set the price you want to sell the product for and you only pay for the product once you have made the sale. There is some risk to working with dropshipping wholesalers since you are completely reliant on a third party to make good on the sale. For many sellers, the benefits far outweigh the risks as they have been able to build stable lucrative businesses using this method.
According to some sources, dropshipping orders increased nearly 20% in 2008. This is particularly interesting since all online shopping is estimated to have increased only 6% over the same period. This growth is due in part to the popularity of using drop shipping to sell on auction sites. In the bustling commercial world of auctions, small sellers can compete with large heavily financed retailers with deep pockets. By using dropshipping wholesalers to supply their products, little guys can offer the same depth of products as the big guys because they avoid the cost of carrying the inventory. Theoretically, everyone gets a better price because competition is increased and dropshipping wholesalers can offer better prices due to volume sales.
So how do you find reliable dropshipping wholesalers to work with? Even the most rudimentary Internet search will return hundreds of hits. You see list after list advertised. Should you buy one of these? Should you subscribe to a directory of dropshipping wholesalers? The truth is, many of these lists and programs are simply scams that prey on those of us who don’t know enough to weed through all the clutter we find. You may be only spending a few dollars on a list but multiply that by the many thousands of others just like you who are out there looking for wholesale drop shippers and you see that there is some serious money at stake. Visit forums, join discussion groups and look for background on the companies you are considering. If you can afford it, trade shows are excellent ways to actually get to meet the people you will be buying from before you enter into a contractual arrangement. Learn about their background, their history, and their track record. IF you can talk with others who have worked with them before, do it! You have a lot at stake here. Anything you can do to increase your odds of success are worth the money and effort.
Minimizing the Risk of Working with Dropshippers
First and foremost you need to do your homework and your first stop will likely be the Internet. There are hundreds and hundreds of dropshippers listed on the web. How do you weed through this haystack of information. Well, you can narrow your search using a couple of criteria. Think about how will you be selling your product and what product will you be selling. Some dropshippers are unwilling to work with online sellers because they believe that their products become over exposed and they end up losing profit in the long run. This is relatively unusual these days but it does happen. Next, what are you going to be selling? You can easily whittle down your list of available dropshippers once you determine the types of products you will be selling.
OK, you’ve found a list of dropshippers that look good, now what? Start researching the individual companies. You need to locate information relating to their track record, their payment terms, their shipping methods and the like. You will likely be albe to eliminate a few candidates right off the bat since not all companies will offer the terms you have in mind. Next, visit online forums and dropshipping discussion groups to see if you can find complaints or praise for the dropship companies you are researching. This will help you narrow the list down a little further. So now you are left with perhaps 5 good viable candidates. OK, dig a little deeper then make contact directly with the company. How you are treated when you contact them will give you a pretty good feel for what their customer service is like. Did you stay on hold for a long time? Are they courteous and can you speak their language? Remember, if you have a problem with your orders these are the people you will have to deal with.
Your dropshipper is your face when it comes to dealing with your customer—they represent you. The packages that your customers have been anxiously waiting for will be coming directly from a stranger. Do you trust this person to represent you in a fashion that you will be proud of? Will the dropshipper have ample supply so that your customers do not receive backorder slips? Does the dropshipper provide products that are of a quality that you can be proud of them? Remember if a customer is not satisfied with your service or product he or she is much more likely to discuss it than if he or she is happy. You do not want negative feedback or flaming messages posted about your business in forums. Buyers do talk and all retail markets are extremely competitive in this day and age. All things being equal, buyers will select the more favorably reviewed provider.
In short, it is up to you to make sure that the dropshippers that you select are the right fit for you and your customers. Only by taking the time to fully research them can you reduce the odds of failure. With a little background research and lots of hard work, you can build a successful and profitable business.