Chapter 7: Sourcing Suppliers
Fortunately for many potential dropshippers there has never been a better time to get involved. There are more suppliers offering products than ever before and each one is becoming increasingly accessible and more streamlined to use.
While there is a long list of potential reliable dropshippers to source as a suppliers, manufacturers are often times more than willing to distribute their items on your behalf if you simply inquire. For those who are just getting started in dropshipping there are a number of places which are more than helpful to get things moving.
Alibaba
Alibaba has been around since 1999. This is highly recommended as the best place to start. With millions of buyers and suppliers across the network. A immense marketplace for wholesalers you can virtually buy and sell anything at a fraction of the retail price. With over 40 different product categories you have a choice between anything from consumer electronics, machinery and apparel. Alibaba is likely the largest market and most commonly used by dropshippers.
1688.com
This has come to being known as the Chinese version of Alibaba. With much of the same products this websites offers cheap wholesale goods straight from Chinese manufacturers. This is my preferred sourcing website as the target customer is the local Chinese. This means that prices are much cheaper compared to the likes of AliExpress or Taobao which have jacked up prices to accommodate foreign buyers.
Taobao.com
Similar to eBay, Amazon and Rakuten, this Chinese website is an online shopping platform founded by the Alibaba group. Centered more around consumer to consumer goods, this platform is great for small businesses and individual entrepreneurs dealing with small online stores.
Dealing with Manufacturers
The first towards using these kind of websites once you have found a product, is to request a sample product from the manufacturer. The reason we do this is to ensure the product is first of all what it is claims to be and then a simple check for the kind of quality you want to be distributing to your customers.
You also would want to be purchasing directly from the manufacturers and not just another third party. The reason for this is to ensure you are getting the best price for your products and have the best possible profit margins straight from the beginning. You will also want to ensure you are never paying upfront for a product before it is sold or paying recurring fees in order to continue doing business with a manufacturer as this can often be a sign of fraud.
If you come across minimum order sizes, which given these products are often sold in bulk can occur quite frequently, the best possible approach would be to establish a line of credit with a manufacturer. This allows you to start a relationship with your manufacturer and gain their trust and build your own reputation.
An example of how this works would be say if your manufacturer has a $500 minimum order and you are spending around $100 per customer. The best approach would be to pre purchase $500 worth of products to show the manufacturer you are serious about doing business with them. You can then continue to order from them, drawing from your $500 line of credit.
With this being said, developing a good relationship with your manufacturer can go a long way and be an important stepping stone in growing your business. As time progresses your manufacturer will start to look out for you and ensure that your dealings with them go as smooth as possible in order for you to continue doing business with them. This can be highly advantageous down the line when every deal can have a massive effect on your bottom line.
Never ever pay upfront recurring fees to your source or manufacturer. Popular and legit manufacturers will never demand an upfront fee. The lousy and shady ones do as they would like to dig yourself a grave before burying you in it. It is alright to negotiate and be firm on your decision. Remember there are plenty of manufacturers and factories out there who are more than willing to do business with you at a lower price.
Alternatively, there are several reliable dropshippers available. These are some that I have personally used for various products in the past and am still using a handful of them today.
http://www.wholesalecentral.com/Dropshippers.html
http://www.worldwidebrands.com/
http://www.freedropshippinglist.com/
These sites are very reliable and have great customer support. They also offer customer protection and even insurance if needed.