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Your Complete Guide to Dropshipping

Looking to build a successful online business? This comprehensive guide covers everything
you need to know about running a dropshipping business.



Finding Suppliers

It may seem obvious by now but it's worth mentioning again: To run a successful online retail store with the dropshipping business model, you must find the right supplier. A good dropshipper can take your enterprise to the next level, but a bad one can destroy your reputation — and your business.

Finding a good dropshipper is easier said than done, as there are a large number of variables to keep in mind. For example, a quality dropshipper will:

  • Ship products within 24 hours of receiving an order.
  • Use a shipping service that delivers products to the customer in a reasonable time frame (2–7 days, depending on location).
  • Not charge excessive fees for shipping.
  • Package products properly so they arrive undamaged.
  • Quickly refund money and replace returned products.
  • Have a quality customer service team that you can contact quickly to resolve issues.

So how do you find a dropshipper that meets these criteria?

Here are a few methods you can try:

Contact the Manufacturer Directly

First, check a product and its packaging to find out the name of the manufacturer and its website. If you cannot find the name of the manufacturer, search for the product name in Google.

Once you locate the website, you should be able to find an email address or a phone number for the sales department. If you cannot find contact information for the sales department, call the company’s office and ask to speak to the sales department.

Now, contact that department directly and ask if the company dropships. If not, ask for names of wholesalers, distributors or dropshippers the company works with.

Visit Industry Trade Shows

Attending trade shows can be extremely rewarding because you will make face-to-face contact with potential suppliers and get to know their representatives on a personal level. Remember, almost every industry has trade shows that wholesalers, distributors and manufacturers attend.

Try attending one of these and bring a big stack of your business cards. At the trade show, you will meet veterans of your industry and see new products before they come out.

To locate a trade show, simply run a search for the industry in Google and add the phrase “trade shows.”

Use Wholesale Directories

There are many wholesale directories available online today. One of the best is the SaleHoo Wholesale Directory, which has more than 8,000 security-screened suppliers offering 1.5 million products in over 150 categories. It also features reviews of suppliers from experienced online retailers.

Word of Mouth

Ask other retailers selling products similar to yours what dropshippers they use. Some online retailers won’t tell you who they use out of fear of aiding a competitor; others will be very helpful. By simply asking, you can identify reliable sources of dropshipped goods.

Google Search

What are other retailers saying about a potential dropshipper? A good way to uncover a dropshipper’s reputation is to run a Google search on the name. If there are major complaints, a Google search should turn them up quickly.

Another good way to learn more about a dropshipper’s reputation is to ask about them on the SaleHoo.com forums. This way you can learn from the experience of seasoned retailers.

How to Screen a Dropshipper

Now we come to the most important matter in this section: screening dropshippers.

You must screen a dropshipper carefully because your reputation will depend on that company. If your supplier does a poor job of shipping, order fulfillment or customer service, it will drive your customers away, and worse, it will reflect badly on you! Using a bad suppliers is one of the fastest ways to destroy your reputation.

You need to ask a dropshipper some questions before establishing a relationship; these questions will reveal how professional the dropshipper really is.

(Note: It's not a good idea to go in guns blazing and ask a supplier all of these questions at once. Most suppliers will list the answers on their website, so try to find the answers yourself and fill in the gaps when you contact them). 

The questions to ask a dropshipper include:

  • "Do you take credit card payments?": This is the fastest and easiest way to pay for merchandise. When you pay by credit card, you can also cancel an order quickly if something goes wrong.
  • "Do you have a sales representative that I can actually talk to?": A professional dropshipper should provide you with the name, telephone number and email of a sales representative you can contact during normal business hours.
  • "What fees do you charge for shipping and handling?": The supplier should have a list of these charges on hand.
  • "What shipping service or services do you use?": A reputable dropshipper should offer more than one shipping service, including the possibility of shipping goods through the postal service.
  • "Do you ship internationally?": This can be critical because people all over the world can order your products through websites such as eBay and Amazon. Always ask for a list of countries your potential supplier does not ship to.
  • "How are the items packed and packaged?" If possible, have the supplier ship you a sample to see how an order arrives. It should be professionally packed in a thick envelope or box and preferably in some sort of protective layering, such as bubble wrap.
  • "How are the items labeled?": Ideally, you’ll want your business’s name on the label, but not your address as the return. The last thing you want is several returned or undelivered shipments dropped on your doorstep instead of at your supplier's warehouse!
  • "What is your return policy?": Will the product be returned to you or the dropshipper? Will you be charged for returned shipments? Find out this information now, before a problem arises.
  • "What is the policy for undelivered shipments?": Will you be charged for products shipped but not delivered? Again, it is better to know this now rather than later.
  • "What are your terms for payment?": Ask whether you will be billed on a per-item or monthly basis. Make sure you are not obligated to pay in advance for unfulfilled orders.
  • "Do you send out email notifications?": A good dropshipper should notify you by email every time an order is shipped and any time there is a problem. The notification email should come with a tracking number.
  • "How long do you take to ship an order?": The best way to determine this is to use the tracking number in the notification email to chart the order’s progress. If shipments take more than a few days to arrive, you need to find a new supplier.
  • "How long have you been in business?": A good rule of thumb is, the longer the company has been around, the better.
  • "Can I have references from other customers?": An experienced dropshipper should provide you with a list of satisfied customers that you can contact.


Final Thoughts

A smart online retailer never puts all of his or her eggs in one basket. If possible, find two, three or more dropshippers and use them all on a regular basis. This provides you with a backup if something goes wrong and gives you an alternative if prices go up. Having more than one dropshipper also makes it easier to negotiate for a better deal on prices and fees.

Congratulations! You now know how to find a quality supplier. Make no mistake about it this is a huge step in the right direction. But now it's time to bring everything together and discuss how to run a dropshipping business through SaleHoo on a day-to-day basis.


Next Lesson: Day-to-Day Operations