How to Choose Wholesale Distributors for Drop Shipment
Drop shipping has become a popular way for retailers to provide their customers with products. Most drop-ship companies are also traditional wholesale distributors. Though it has not taken the place of traditional wholesale buying, drop shipping enables entrepreneurs to start up with considerably less money, and alleviates the hassle of storing and shipping products. To choose a good wholesale distributor that also drop ships, you will need to carefully look at their reputation as well as several aspects of how they do business.
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Instructions
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Compare shipping prices among the drop shippers you are considering. The main thing to look for is whether the company overcharges for shipping and what shipping methods they have available. The more shipping options that are available, such as expedited and overnight, the better -- this means more flexibility for your customers.
As for overcharging, you will need to look at the published rates of the companies the drop-ship company uses. For example, if it's known that a flat-rate box costs $7.95 to ship, but the drop-ship company is charging $12 for that same flat-rate box, they are overcharging.
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Evaluate the company's drop-ship fees. Some companies don't charge anything to send drop-ship orders aside from the cost of the product and shipping, while others charge between $3 and $7 per each drop-ship order on top of product and shipping costs. If you are selling products with a small profit margin, it's best to choose a drop-ship company that charges low or no drop-ship fees.
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Get recommendations from other sellers, read sellers' forums and message boards, and peruse reputable, non-biased review sites to determine whether the drop-ship companies you're considering have a good reputation. This is a very effective way to see what other sellers' experiences have been, whether the companies make good on their business promises, and whether the merchandise they ship to customers is truly of good quality.
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Ask any drop-ship companies you're considering whether they offer branding services, such as putting your company logo on order invoices or allowing your orders to be shipped in branded packaging. At the minimum, any drop-ship company you use should not disclose the fact that they are a drop shipper to your customers. This means their Web site, business name, logo, and contact information should not appear anywhere on your customer's order receipts, invoices or packaging.
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Determine whether the drop-ship company you're considering has customer service polices that are in alignment with your own by thoroughly reading their policies. For example, if you guarantee your customers that all orders will ship within three business days, and that defective merchandise can be returned within 30 days, you should ensure that your drop-ship company promises the same.
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Ensure any drop-ship company you do business with has several valid ways to contact them. It's not enough for them to list an address or fax number. The contact information has to actually work. Since you will be entrusting the company with your customers' orders, an e-mail address is not enough -- they should also provide, at the minimum, a phone number and physical address.
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Look at whether the drop-ship company provides product images for you to use, what quality the photos are, and whether you'll have access to multiple angles or just one product shot. This is important because if you have to take your own product photos, having a drop shipper is not of much help since you'll have to end up buying all of the products and hiring a photographer.
Note that product images and descriptions are totally different. Ideally, you should come up with your own product descriptions so that you're not using the same ones as other sellers who are working with the same drop-shipping company.
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