You’ve been in the dropshipping game for a while and know you need to optimize your operation to get profitable. While it’s tempting to focus solely on branding, advertising, and your Amazon listings, there are other areas you need to optimize, too.
When was the last time you rethought your suppliers? Low-quality products, shipping delays, and bad returns might be your supplier’s fault, but your customers will blame you.
Every successful dropshipper succeeds because of their strong supplier relationships. A subpar supplier means you have a subpar operation. If you’ve resigned yourself to working with less-than-great suppliers because it’s hard to find other options, don’t settle.
Let’s dig into why you need an awesome supplier and 5 ways to find the perfect one for dropshipping.
Dropshippers depend so much on suppliers to ship and store products, which means if you choose a bad supplier, a lot of things go south, fast.
You should care about finding a better supplier because bad suppliers:
Because you’re a dropshipper, your supplier touches every part of your business. It can feel scary because this means you don’t have a lot of control over your business—so the higher-quality supplier you find, the better.
While you always want to find the best supplier for your dropshipping store, this isn’t just about finding a great supplier. At this stage in your business, you want to negotiate deals that put you in the best position possible. But that starts with your supplier. Follow these 5 tips to vet several suppliers and find the right option for your business.
While you’re free to consult Google for suppliers, go to the manufacturer first. You probably have a target product in mind anyway; go to the manufacturer and ask them for a list of approved suppliers.
For example, if you were selling fidget spinners, you could just approach the fidget spinner manufacturer to see who they use as a distributor. They’re usually more than happy to send you a list of approved distributors. This is, by far, the fastest way to find trustworthy suppliers.
To maximize your odds of success, you can always choose multiple approved suppliers with a tool like Spark Shipping. Our intelligent order routing feature lets you route the order to the lowest-cost, in-stock supplier.
Directories are specialized databases that house trustworthy suppliers for quick reference. Some directories even include reviews, so you can vet other dropshippers’ experiences with a supplier before you buy.
The downside is that you’ll probably need to pay either a one-time or membership fee to access the directory, but if you want to save a lot of time, they can be a good option.
After consulting a manufacturer or directory, you’ll have a shortlist of suppliers that could work for your operation. But don’t choose the first supplier you see; evaluate the pros and cons of every supplier to find the best ones for you.
The best way to evaluate a supplier is to make a few test orders. A reputable supplier will be more than happy to accommodate that, although they might require a minimum spend or a number of units on your order. At any rate, that’s much cheaper than saddling yourself with a subpar supplier.
When you commit to a test order, evaluate each supplier on criteria like:
While unit pricing is definitely important, it’s not the only thing that matters to dropshippers. In our experience, contract terms can overpower the savings you get with a lower cost per unit, so always negotiate terms with your chosen supplier.
For example, if your supplier charges a little more per unit but offers free shipping or 60-day payment terms, that can be more beneficial to your cash flow.
Be sure to take your time vetting these suppliers. Instead of communicating over email or chat, get them on the phone for a real conversation. They’ll ask for proof of your business registration and past performance, so have those numbers at the ready. The more data you have, the better. After all, suppliers are vetting you as much as you’re vetting them, so make a good impression when you come to the negotiating table.
If you really want to play the negotiating game well, make a trip to visit your supplier in-person. That might mean making a round-the-globe trip to China, but face time with your supplier will often lead to better terms than you can negotiate over the phone.
Once you do nail down these terms, make sure you get it all in writing with your supplier. The contract should include items like:
You aren’t stuck with your supplier forever. As a dropshipper, you should feel free to drop suppliers when they aren’t delivering on their promises. Even small issues with shipping or product quality can reflect poorly on your business, so don’t be afraid to switch things up. Make sure your contract includes a clause about canceling the agreement if the supplier doesn’t perform.
You might have a solid dropshipping operation today, but one slipup from your supplier can cost you dearly. Make sure you vet your suppliers carefully before committing to a long-term agreement. eCommerce is a ruthless game, but you can come out on top when you follow these 5 tips to source better, more trustworthy suppliers.
You don’t have to do it all alone, either. Spark Shipping helps dropshippers optimize their businesses to get profitable and save time. See how we make supplier management a breeze for dropshippers.