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Common Mistakes Made By Wholesale Dropshippers

Thursday, July 29th

Common Mistakes Made by Wholesale Dropshippers

So the tourist in New York City stops a fellow on the street to inquire how to get to Carnegie Hall and gets the reply, "Practice, practice, practice". It's an old story, but a good answer.

By the same token, if you want to know how to avoid some of the common mistakes made by start-up online retail businesses who use wholesale drop shippers to warehouse and ship product to their webstore customers, the answer is "Research, research, research."

After you have identified the products you want to sell, based on your knowledge and interests which makes you an expert on them, you must find a supplier of those products. A wholesale drop shipping supplier can be the product's manufacturer, wholesaler or distributor. Thorough, in-depth research of suppliers will reveal which wholesale drop shippers are as close to the product's origin as you can get. A common mistake is to engage a company which appears to be the wholesale drop ship suppler, but is actually a middleman layer who relays your order to the supplier, charges for their service thereby increasing your costs, and will occasionally put their logo on the shipping label or include a packing slip with their information inside the box being shipped to your customer.

After finding several wholesale drop shipping suppliers of your product, don't assume all will package and ship a single item for you on demand. Some will require a minimum quantity per month in order to enter into an agreement with you. Some will charge you a monthly fee to be your wholesale drop shipping supplier. Don't expect to get the same wholesale price for product and shipping as another retailer who orders in bulk.

Another common mistake is as age-old as putting all your eggs in one basket. Some wholesale drop shippers offer hundreds of thousands of items in their catalogs and it is possible one wholesale drop shipping supplier can seem to meet all your needs. But it is a very good idea to have a business relationship with more than one wholesale drop shipping supplier for your product. Even if your research has indicated your supplier of choice is rarely out of stock of your product, it can happen. Have a back-up supplier to turn to in order to avoid having a disappointed customer. As an online retailer, having prompt shipment of goods cannot be over stressed.

Additionally, choose wholesale drop ship suppliers who use package delivery services with package tracking. Because you are an online retailer using a wholesale drop shipper to warehouse and ship your product, it is unlikely you ever will lay a hand, or eye, on the item your customer has ordered from your webstore. Not being able to tell your customer when his already paid-for item will be shipped, and when he can expect it to show up at his door can be a major mistake.

These two shipping issues alone can make or break your business.

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Wholesale Dropshipper FAQ

Dropshipping is a way of selling goods without having to personally maintain them in inventory. You act as a liaison between customers and products, passing along orders to the supplier(s) who then ship the products directly from their warehouses to your buyers.
There are lots of benefits to wholesale dropshipping. You don't have to lease a warehouse or storefront, which automatically means your operating costs are lower. It's a less risky option than many other sales models available today.
The easiest way is to select a wholesale dropshipping partner. These services do most of the legwork to source products for you to sell and generally help you advertise your "inventory" on various marketplaces and platforms online. You'll still need to do some work to spread the word, through social media buzz and targeted ads, if you want to maximize your profits.
Sometimes. You'll find services that charge a one-time fee of a few hundred dollars, and others that have monthly fees ranging from $30 to almost $400. Typically, the higher the monthly costs, the more advertising and automation features you get. These fees are in addition to your business costs of setting up a website, advertising, and so forth.
Yes. Once you start to make sales, you'll need to take out a business license according to the requirements where you live. Most payment providers will require proof of those credentials before passing along your profits.
That is one of the trickier aspects of running a dropshipping business. Your customers see you as the business, and so they'll expect you to handle refunds or replacements. Every supplier has different terms for returns - which means you could be out of pocket on the refund until the supplier fixes the situation on their side. Some dropshipping experts recommend that you order product samples for yourself, to decide what to carry in your store and make sure that it's quality merchandise.
In all frankness, there are some dropshippers that are 100% above-board, and many others that are little more than a thinly-veiled scam. Do your due diligence before committing to a dropshipper: find the service's rating with the Better Business Bureau, see what other clients have said about using the platform, and determine how long the company has been in operation. There are trustworthy dropshippers out there, but choose carefully.
Most dropshippers have a free trial period, so you can see how well the service works for you. You could have as long as 60 days to request a refund, depending on the terms of the dropshipper's satisfaction guarantee. Again, it's important to check the reputation of the service you're considering - because all of the guarantees in the world only count if the company actually honors it (and there are some that don't do a very good job of that).
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