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An unusual startup using all the principles of the dropshipping business model is selling Arctic ice to cocktail bars in the United Arab Emirates and Dubai. Yes, yes, this is no joke! Companies that harvest ice from Greenland’s fjords have been trying to export it for years without success. It was dropshipping that solved the problem of finding partners. Dropshipping has long been an effective tool for online and offline promotion.
What do you need to be successful in the dropshipping business? First of all, you need time to get the business up and running. And, of course, a structured approach to choosing: products, market research methods, suppliers, marketing and customer service. And at the heart of it all is the right product for the consumer and a trustworthy supplier.
How do you find dropshipping suppliers?
Finding and vetting suppliers is an ongoing process that starts long before you start your business and never stops. By constantly researching the market, studying the competition, new ideas, profitable opportunities and interesting offers come up.
Dropshippers can work with both larger dropshippers, wholesalers, distributors and manufacturers looking to reduce costs. Admittedly, the latter are more likely to require volume purchases, but it’s worth trying one way or another.
Where to look for dropshipping suppliers?
- Search engines. The easiest way to start is to search for keywords and popular queries in your niche.
- Online marketplaces. Popular online marketplaces such as Alibaba, SaleHoo and Doba offer databases of suppliers in various niches.
- Social media. Most suppliers and companies have social media accounts. Explore LinkedIn, Facebook and Instagram using hashtags and keywords.
Price: value for money
Dropshipping is usually a low-margin business. This depends on the price a supplier charges for their goods. When choosing a supplier, compare their prices with those of their competitors. Find out what discounts the supplier can offer on large orders.
When calculating the cost of goods, take into account hidden costs such as commissions and taxes, as well as additional delivery and handling charges. Don’t forget overheads for: website maintenance, advertising, promotion, staff salaries (if any), product certification (if any).
Supplier reputation: certifications and standards
Research the supplier’s reputation, study customer feedback and how they rate the quality of the goods. Check for quality certificates and product compliance with standards. This will give you confidence in the reliability of your partner.
The seller cannot check the quality of the goods sent on his behalf. If the product does not meet the buyer’s expectations, all claims must be made directly to the seller. It is up to him to deal with the problems and to resolve the issues of replacement and refund.
Working conditions: payment methods, delivery conditions
Read the terms and conditions carefully. Find out if there are any minimum order requirements, their price and quantity. What are the payment terms and methods? Minimum order policies may vary from supplier to supplier.
Delivery times are extremely important in drop shipping. Make sure they meet your expectations. You need to understand how much it will cost you to ship the item and how you will be able to track it. The seller has no control over the processing, checkout, shipping and logistics of the order. Any errors or problems that occur during the shipping process can reflect badly on the business.
Returns policy and customer service
Your returns policy has a direct impact on your reputation. Make sure your potential supplier has a clear and fair returns policy. Contact them and ask specific questions: How quickly do they respond to problems with an order? Does it offer guarantees, when and where it will repair goods at its own expense?
Read reviews from other drop shippers about a particular supplier. Technical support and the ability to service and repair goods are important issues that can be inconvenient and affect your business.
Marketing and advertising
Clarify what marketing and advertising tools the supplier can provide to promote the goods. Ideally, we all want to work with responsible suppliers who supply only high quality products. In reality it can be much more complicated. But when you start your own business, even a small one, you still need to research and check potential suppliers as much as possible.
Financial health of the supplier
Investigate the supplier’s financial strength. Start by looking for information about the company on its official website. Read any reports, presentations or other materials published there. Search the internet for financial news, analytical reports that might influence a potential supplier.
It is important to gather and analyse information from a number of sources. Unfortunately, this can be difficult to do without professional training. On the Stelvel Ltd platform you can get an objective and comprehensive view of the financial situation of a dropshipping supplier of interest. The company carefully selects dropshipping suppliers, checks the counterparties, their reputation and their financial situation using: balance sheets, annual reports, profit and loss statements, cash flow statements. These documents provide an overview of the company’s financial position over a given period. Stelvel specialists monitor databases, world rating agencies (Moody’s, Standard&Poor’s) and financial platforms (Bloomberg, Reuters).
Dropshippers can boldly expand their product range, grow and expand their business. The key is how they screen and analyse potential partnerships. So when choosing a dropshipping supplier, always assess the prospects of working together and consider all the criteria above.