Search and assessment of suppliers for dropshipping: secrets of quality cooperation
22.06.2023 17:37
It is impossible to build a successful dropshipping business without reliable and trusted suppliers. No matter what platform you sell on, no matter what product you choose, a discerning customer will compare your terms and conditions and customer service with competitors. And fast order delivery, no delays, and no product defects are mandatory quality markers that are often decisive for customers in choosing a store.
So, where to get goods for dropshipping? Where to start looking for reliable suppliers and how to do it right? Let's deal with everything one by one.
Who are suppliers?
A supplier is a legal entity or individual entrepreneur that provides goods or services to other trading companies or individuals, such as dropshippers. Suppliers provide the necessary goods and materials for the production or sale of products and services.
Suppliers can be manufacturers, wholesalers, distributors, importers, or intermediaries that deliver products or services to sellers or end users.
A supplier searches for and purchases goods, stores them, transports them, and ensures quality and timely delivery. It can also provide technical support, advice and after-sales service to its customers.
Choosing reliable and qualified suppliers is an important condition for running and developing any business, including dropshipping. A supplier directly affects the efficiency of a dropshipping seller's work, the provision of quality customer service, and the satisfaction of their needs.
Selection of suppliers. Stages of an effective search
The relationship between the manufacturer and the buyer has come a long way until the flexible dropshipping business model appeared, which simplified and improved the path of goods from the direct manufacturer to the consumer.
The search for manufacturers or wholesale companies consists of several conventional stages.
1. Market research and analysis
Conduct market research in your niche to find out which suppliers are popular among other dropshippers. Use a variety of resources: forums, blogs, and social media to find recommendations and reviews about suppliers.
Decide whether to work with a local or foreign supplier. This will depend on the number of suppliers in your chosen niche. When choosing suppliers, you need to look into their sources, delivery times, and service potential.
2. Check reputation
Before cooperating, find feedback from other customers. Foreign suppliers' ratings and reviews can be found on specialized platforms: Alibaba, AliExpress, eBay, Amazon, forums, etc.
3. Contacting potential suppliers
Contact the suppliers you are interested in and find out more information about their work. Pay attention to the speed and quality of the response.
Talk to the supplier that meets your needs. The conversation will help you clarify important points and terms of delivery, and even negotiate discounts on a regular basis.
Suppliers may even provide you with contact information for some of their current customers so that you can get feedback on their experience before you commit to a deal.
4. Ordering trial samples
Order trial samples of products to make sure the quality of the products and the speed of delivery. This will help you assess whether the supplier is delivering on their promises.
If one of your competitors uses the same supplier as you, order from the competitor and find out how the products are packaged and whether they offer services such as customized labeling. This way you can get an idea of the level of service and compare it with your competitors.
5. Establish the payment procedure
Check the supplier's pricing policy and payment terms:
- full or partial prepayment for batches,
- payment with the supplier after the customer pays for the order,
- payment by deferred payment, etc.
Discuss verbally and specify in the contract the possibility of additional purchase discounts and the option to freeze prices so that they do not change for a specified period.
6. Fix the terms of cooperation in the contract and CRM system
In order to successfully conduct dropshipping trade, data on suppliers, monetary and trade transactions with them must be recorded in one accounting center, preferably in the store's CRM system.
You can transfer data on counterparties, warehouse and financial transactions (details, invoices, invoices, checks, returns) to the Torgsoft accounting program. If you keep records manually and store documents on a work computer, especially with high trade turnover, this will eventually lead to chaos in management, and therefore affect the financial performance of the business.
Signs of reliable suppliers
The best dropshipping suppliers stand out from the rest by the following characteristics:
Documentation and composition
A reputable supplier or manufacturer should have the relevant documents on the legality of their activities: licences, certificates or hygiene conclusions, depending on the type of product.
It's also worth finding out in advance how the supplier stores products, especially if they sell equipment, consumables, and food.
Expert knowledge of the industry
Top-notch suppliers have competent sales representatives who know the industry and product line in depth. Personal support, especially in the early stages of business, is of paramount importance, especially if you are opening a store in an unfamiliar niche.
A personal sales representative will take care of a particular client-seller and solve any issues that arise in the course of work. There are some wholesalers who do not provide consultations, which is why the process of establishing a partnership takes months. Avoid such partners.
After-sales service
The speed and quality of processing customer orders by the supplier's service department is important. It generates invoices, manages warehouse operations, and ships orders to the end user.
It is clear that a dropshipper, like a retailer, does not have access to the supplier's "internal kitchen". However, by ordering trial batches, they will be able to assess the speed of order processing, the conformity of delivery batches, and the competence of employees who will provide them with information about possible delays in logistics or product reservations.
Investing in innovation
While there are plenty of good suppliers out there with outdated websites, it's a better experience to work with a supplier who understands the benefits of technology and invests in it.
Features such as inventory, databases that automatically sync with online stores, and a searchable order history are all essential in a high-tech, competitive environment.
Convenient location
If you are choosing suppliers from Ukraine, it is better that their warehouses are located in large cities with a well-developed logistics system. It will not be fast to deliver goods from Chernivtsi to Kharkiv, so if speed is a key search criterion for you, focus on local markets.
Organisation and efficiency
Suppliers with a good reputation have a well-established order fulfilment system. Others constantly fail to deliver or supply low-quality goods. Until you use the services of a supplier yourself, you cannot determine the level of their reliability and competence.
Placing a few small test orders can help you determine how the supplier works. By placing test orders, you will learn:
✎ How does the order processing process work?
✎ How quickly are the goods prepared for shipment?
✎ How quickly is information on order progress and invoice provided?
✎What is the quality of the packaging when the goods arrive?
Before you start sourcing, it is important to know how to distinguish between genuine wholesale suppliers and retail stores that pose as wholesalers.
A genuine supplier purchases goods directly from the manufacturer and can usually offer you better prices.
When selecting suppliers, ask them basic questions:
✓ What are the terms of returning goods?
✓ What is the range of price fluctuations for the product?
✓ What is the warranty period for the products, if any?
✓ Free shipping option and its terms and conditions
✓ Are the product instructions adapted for Ukraine?
✓ What are the pricing conditions?
In general, try to go directly to manufacturers - this way you can get more loyal and favourable partnership terms and not set higher prices on your own website.
Suppliers to avoid
There are certain signs that a supplier may be fake. In addition to negative reviews and low quality products, other factors can identify a bad dropshipping supplier.
A bad sign is if the supplier charges a monthly or recurring fee from the dropshipper. Such fees may indicate that the supplier is an intermediary that makes money from placing its products in catalogues. However, catalogues usually charge a fee for access to their database. If the supplier insists on such fees, you should stop communicating with them.
Another red flag is ads such as "goods at wholesale prices for everyone", when a wholesale supplier offers its services to anyone. As a rule, to become a partner of a supplier, a retailer must create an account on the supplier's website and provide proof that he is a legitimate business. If the "supplier" does not require this, it is most likely a regular retail store that sells goods at higher rates.
Where to find suppliers for dropshipping business?
You can form your own database of partners based on recommendations, or you can enter the query "Supplier database dropshipping Ukraine" in Google and see the results yourself.
Domestic suppliers operating in the Ukrainian market since March 2022 can be found on aggregator resources such as: foks.biz, bigopt.com, olx.ua, social media, as well as specialised online catalogues, which are mostly paid for.
Access to Ukrainian suppliers will allow you to trade both domestic and foreign goods. However, you will not be able to choose the desired product categories yourself, as the supplier prepares the catalogue at its own discretion. At the same time, the physical presence of a partner in Ukraine will help you resolve possible conflicts faster and easier than with American or Chinese suppliers.
If you decide to cooperate with foreign manufacturers or distributors, look through their catalogues and study the terms of partnership in detail.
The most famous foreign online supplier platforms:
- AliExpress
- AliBaba
- CDS (Bluember)
- Doba
- InventorySource
- MegaGoods
- National Dropshippers
- SaleHoo
- Sunrise Wholesale
- Wholesale2B
- Worldwide Brands
- Wholesale Central
Each of them has its own peculiarities and terms of partnership, as well as advantages and disadvantages. You should evaluate them based on your specific needs and terms of cooperation:
- type of product
- estimated period and delivery options,
- the possibility of supplying small batches, discounts, etc.
For example, AliExpress, a popular Chinese retail aggregator, offers more than 100 million products in 40 niche categories for wholesale purchases. Like other similar platforms, it brings together e-commerce stores, suppliers, and products in one place. It delivers products to 254 countries within 15 to 45 business days.
However, the terms of purchasing products on AliExpress are not always favourable. To run a dropshipping business on the best terms, we recommend exploring other trading platforms such as 1688 and Taobao, which offer products at lower prices than AliExpress. The disadvantage of this method is that you need to spend time on a proper translation from Chinese to find products and study their characteristics.
The CJDropshipping mobile app will help you search for the necessary products - it is an aggregator that brings together suppliers from China and the US and delivers various goods to the US, so it is suitable for those dropshippers who aim to enter international markets.
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