How To Find The Best Wholesalers For Your Dropship Business

By Author: How To Find The Best Wholesalers For Your Dropship
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The concept of dropshipping via wholesalers has become popular with many small or home-based businesses. The plan is this: The business owner gets in touch with the supplier. The supplier ships the products ordered by the business owner's, or reseller's, customers. Here is the difference between retail and dropship businesses: The supplier ships the product to your customer, not to you. The reseller never handles stock. He or she finds customers for a product and then asks the supplier to send the products directly to the customer. The customer pays the reseller the retail value. The reseller pays the supplier at wholesale prices. The difference is the reseller's profit—simple enough in theory.

The Challenges

In practice, a dropship business is tough. One of the first and biggest challenges you will face as a reseller is how to find a good supplier. In a retail setting, the store usually orders their goods from wholesalers. Once the goods arrive, the retailer pays for them and stocks them in their store or warehouse. The customers browse through the product list (if online) or visit the store and purchase ...
... a product. For a dropship reseller, things are rarely this easy.

First, suppliers do not want to work with dropship businesses. They want to do business with resellers who pay cash upfront after purchasing stock. This means they expect you to invest in large amounts of stock. Second, you will need a warehouse or storage facility. Third, your product offerings may be limited if you don't have room for storing too many different types of items. Fourth, you take on the hassles of a regular retail business—packaging, labeling, shipping, and so on. Last, if the products remain unsold, you lose your investment, what business administrators call zero return on investment.

Locating Wholesalers

The only choice is to find wholesalers willing to work with dropshipping businesses. It may seem impossible, but there are suppliers who offer wholesale or discount prices for small stock purchases. Some advice to launch you dropship business follows:

1. Approach manufacturers directly with a dropshipping proposal. Do not work with large, well-known manufacturing companies, who prefer doing business with large dealers.
2. Look for local manufacturers or suppliers and introduce them to the dropship business. However, your profits may be limited because of the limited reach of the supplier.
3. Find wholesalers via agents. Agents are paid a commission by the supplier, which impacts the wholesale price for resellers. Again, your profits may be limited.
4. Turn to a wholesale directory, perhaps the cheapest and most effective way to find wholesale dropshippers. Directories can be easily accessed online, and they are either free or require a very reasonable membership fee. They act as an online B2B platform to bring together resellers and wholesalers.

Finding the right wholesaler takes a lot of hard work and patience plus a bit of good luck. But, the rewards are worth the effort.
One of the primary success factors in the dropping business is access to the right wholesalers. Given that a wholesaler usually works exclusively within a retail selling model, finding wholesale dropshippers is often a challenge.