How to Recognize a Good Wholesale or Dropship Provider

Starting your own Internet business of selling products directly to the consumer requires you to have your suppliers in place. Most likely, you will not stock the items that you sell, but you will establish a relationship with a drop-ship or wholesale provider to ship the products for you. Finding reliable sources can be a challenge sometimes, and you may lose a few customers while you fine-tune your supplier list and weed out the ones that don't perform. Therefore, before you advertise your website, know how to recognize the good drop-ship and wholesale providers so that you will make a profit from the very beginning.

Instructions

1. Join a legitimate drop-ship or wholesale association or club. Ask others in the industry for a reference to one, or request of list of members from the association to call.

2. Decide what you would like to sell in your online store. Using the association's list, find the name of a drop-shipper or wholesaler that offers that merchandise.

3. Look for ratings of the various suppliers from other distributors like yourself. If your association provides this service, read the comments about satisfaction levels and reasons for the ratings.

4. Call the drop-ship or wholesale supplier. Check to see if you are able to speak to a customer service representative right away or if you have to leave a message. If you must be called back, make sure the company returns your call before you choose to work with it.

5. Ask the supplier if there are product minimums that must be met to receive the wholesale price or if you have to sign a long-term contract. Avoid these suppliers. Inquire about the length of time before an order is shipped out. A 24- to 48-hour turnaround from the time the order is received is acceptable.

6. Request a trade credit application so that you can apply for terms. This means that you will not have to pay for the product as soon as it ships, but that you will be billed later. Since it's similar to loaning money, you must be screened or place a few orders before most vendors will approve you. The advantage to trade credit is to help your business maintain cash flow operations.

7. Order a sample from the supplier for free or a reduced price. Handling and using the product will let you know the quality of the items that the supplier offers.

8. Ask the drop-ship or wholesale providers if they will ship the order "blind." This means that the packaging will be blank, with your company name as the return address. Otherwise, your customers will know who your suppliers are and may try to order directly from them next time.

9. Order a product as if you are a customer. Check to see how fast it ships out, when it is received, the quality of the packaging, the blind ship status and the condition the product is in when it is delivered. If there is any reason for you to doubt the authenticity of the drop-ship or wholesale provider, look for another one that sells the same type of products.

Tips & Warnings

• Avoid purchasing lists of wholesale or drop-ship providers. It's possible that the list will be outdated, and you won't know the quality of the companies on it. You are better off joining associations and screening wholesalers yourself.

References

• Drop Ship Access: What Is Drop Shipping?
• Dropship Strategy: Drop Shipping Reviews
• Small Business Trends; Trade Credit: What It Is and Why You Should Pay Attention; Anita Campbell; May 2009
• Dummies.com; How to Find a Good Drop-Shipper; Marsha Collier
• Candela: Blind Shipping
• Worldwide Brands: The Scammers Are All Over the Net and They're Targeting You

Resources

• National Mail Order Association
• Drop Ship Access
• Advertising Specialty Institute
• "Entrepreneur"; How to Find a Drop-Shipper; Corey Rudl; June 2004