Avoid Dropshipping Disasters – Some Valuable Tips

Although dropshipping is not a new business concept, it is a method of order fulfillment that your average retail customer is totally oblivious to. Many online sellers who only actively sell on auction sites such as eBay often stumble across the term ‘dropship’ and only then realise the merits and potential of reselling on this basis. For many, the realisation of the vast range of goods available to resell on a dropship basis is instrumental in their progression from selling unwanted household items and clothing to smartening up their image and advertising shiny new factory sealed branded goods, with many opening online retail stores instead, or as well as advertising in their usual way.

For many who progress along this route, the reselling activity with their dropship supplier will be a long lasting, fruitful and profitable e commerce dropshipping one, without any major issues arising to sour their business relationship but for many others the whole experience of starting out using a dropship supplier will be an absolute nightmare one that could ruin their online business, their reputation and cost them a fortune financially.

The horror stories are plentiful, with so many companies now advertising top range branded goods at unbelievably low prices for dropshipping resellers, if you hook up with the wrong one, you may find that once they have taken your orders and your money they then fail to deliver the goods, or commonly what they do send is not a the real mccoy which means that you are left to appease your irate buyer, refunding their purchase money along with their postage costs. This then means you are the one who is out of pocket along with that dreaded tarnished reputation. Think about it, if you have made a handful of orders with your new supplier and each one is not fulfilled, in a short space of time you will need to refund your buyers and that could be a lot of cash.

There is a very simple checklist that anyone new to dropshipping should use to verify their suppliers. Its not bulletproof but by following a few simple steps, the risk of costly disasters can be reduced.

  1. Sourcing Dropship Suppliers The best dropshippers to use are the ones that are recommended, there are many advertising on the web and they all promise the best deals but its the benefit of other peoples experiences that gets you the right one. There are many ‘directory sites’ listed on the internet offering free or paid for lists of dropshipping companies, some may be good and offer accurate information but then there are many that are owned and compiled by the suppliers themselves listing only their companies details, so best to avoid to be safe.
  2. Contact Details Once you have found a supplier that sells the range of items that you are looking to stock, check out the contact details on their site. Any legitimate business encourages contact with customers, after all that’s how to get more business done. The suppliers site should clearly display a contact phone number, physical location address and e-mail details. If they do, try them out, see if the phone gets answered, test the response time to your e-mail because in future if you encounter problems with any orders you may place, you need assurance they are on hand to deal with them. Avoid any supplier site with incorrect or no contact information.
  3. Terms and Conditions All dropship suppliers should clearly state their terms of business and it is strongly advisable to familiarise yourself with them. You need to know where you stand when issues arise such as undelivered items or faulty goods received, if you have doubts or questions then e-mail a request for clarification. Remember, this falls into Business to Business contract legislation and in most countries it will vary greatly from the laws that cover Business to Public, in other words, as a reseller you will have different responsibilities to your customer than your supplier has to you.
  4. Registration and Subscription Fees It is common practice for dropshipping companies to charge their resellers registration fees and possibly ongoing subscription charges to access their catalogue and it is widely acceptable. In most cases, if you contact these suppliers before registering they will normally allow you access to the prices for a limited time or maybe e-mail you a sample price list. Always tread carefully with any site that charges ongoing subscription fees, dip your toe in the water first with the shortest time possible and double check the paperwork to ensure that you don’t inadvertently sign up for any lengthy minimum period that will incur costs for unwanted membership.
  5. Stock Levels and Dispatch Times When communicating with any potential dropship company, always enquire about the amount of stock they carry. A lot of suppliers will show stock levels on their sites but many advertise themselves as wholesale / dropshippers when in fact they are purely middlemen or agents and only place orders with their supplier when enough orders are placed by resellers that meet minimum order quantity restrictions they have. If you end up with a middleman it could mean lengthy and unacceptable delays for your customers to receive their goods, which potentially means you having to refund.
  6. Accepted Payment Methods There are numerous online payment methods available and all of them incur costs that need to factored into the selling prices, PayPal, Nochex, Google Checkout to name a few. When choosing your dropshipping supplier always confirm how they expect to receive payment, ideally you want them to accept payments the same way that you do from your customers as that is where the funds will be held and you will save time and charges if this is the case. Many overseas suppliers will expect payment by Wire Transfer or Telegraphi Transfer and this is high risk without any customer protection that you have with the processors like PayPal. Initially, it is advisable to steer clear from this method unless you have built a solid and trusting relationship with your supplier.
  7. Branded Goods One quick internet search will find countless sites offering designer clothing and the latest top brand electrical goods at a fraction of their retail price available for dropship. In short – Steer Clear. Unless you are ordering the goods from a known and trusted supplier that has sourced some close out, refurbished or Grade A returns you can almost guarantee that branded or designer goods that are priced too good to be true will be fake and reselling these could mean that you as the retailer face the consequences of dealing in counterfiet goods.
  8. Web Search Reviews Once you have found a potential dropship supplier or compiled a shortlist, then take the time to do a quick internet search of the company names. It should throw up some interesting listings and normally amongst them will be reviews or comments made in Forums or Blog pages from prior or existing fellow dropship resellers. The chances are that you will find more bad comments than good as any happy resellers are less likely to post about their fantastic dropshipping supplier and tip off the whole world of their money making arrangement but the bad posts should speak for themselves and will assist you in your judgement.
    By following this simple checklist you are not guaranteed overnight riches and success when dropship selling as it just covers some of the fundamental basics for anyone starting out. The hope is, that it portrays the need for diligence when in business and will avert some from making costly mistakes by jumping in feet first with the first dropship company that they find.

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