How To Find the Best High-Ticket Drop Shipping Suppliers
Hey, guys. Trevor here with eCommerce Paradise. Welcome back to module three. This is the third lesson in what is drop-shipping mini-course. This lesson is going to be all about finding and working with drop-shipping suppliers or known as drop-shippers.
A drop-shipper isn't just you or me, but a drop-shipper is a supplier. You and me, we are online retailers. We are e-commerce marketing professionals. You have to understand suppliers in order to work with them, who they are, where they're coming from, and who they want to work with, who they want to partner with, what the ideal dealer for them is so that you can present yourself as the ideal dealer for them to work with. Before you understand how to present yourself properly, let's talk about one quick thing, because a lot of people that get into drop-shipping and e-commerce, they start out by looking for drop-shippers online by typing in the word drop-shipper plus their niche word.
Let's just say you're selling skateboards, for instance, skateboard drop-ship. If you type that into YouTube, I'm going to do it right now and see what comes up, the first thing that comes up is wholesale2b.com. That's right. It might not be for you in the future, but right now, that's what comes up. Let's see what they do. Free access to over one million drop-ship products. Guaranteed lowest prices online. Get started for free. No credit card needed. They have a link at the top that says our prices. We have to understand this company and what they're doing, wholesale2b.com. There's a lot more of them out here like this.
What they're doing is they're presenting themselves as if they're some sort of a drop-shipper supplier, a wholesaler you would think of as far as that goes, but they're not really stocking anything. Most likely, I'm assuming this, but most likely, what they're doing is they're setting up accounts, and they’re being a middleman fulfiller. They might have a platform set up to where you can actually go to their website, upload the products onto your website, try to sell them. Even if you did make a sale though, you weren't actually getting that product drop-shipped from the supplier. You're not even getting that kind of margin. You're getting much lower margins.
Wholesale2b is drop-shipping it from the supplier to your customer. Instead of having a triangle, you now have a square. A square, which means it's you, Wholesale2b, the supplier, and the customer. What you're looking for is the triangle. You want it just to be you, the manufacturer, supplier and the customer. That's the ideal.
My suggestion is don't ever go with somebody like this. You're going to see that they charge $30 to $40 per month for access to their wholesale platform. These are known as fake drop-shipping suppliers. While some of them do offer a nice service of connecting you with wholesalers that you may not have known existed or whatever, you can always get those connections direct yourself. You don't have to pay their fees.
The only thing that you might ever think about doing is paying for their automation services. Sometimes they offer a service where they will automate the inventory feed. For instance, if the wholesale supplier sells 10,000 products, which is not uncommon, they'll actually make it so it'll upload to your website instantly and update the listings when things go out of stock or when things are discontinued or when in the price changes. It's a really cool automation tool for sure. You can even pay extra to have orders processed directly with the actual supplier. Yes, that might be worth paying for, but that's not until way later down the road. I would never think about starting there.
What you should think about starting in the very first place is looking for actual suppliers. You are not going to find actual suppliers most of the time just typing in drop-shipper and going to Google. The way you find actual suppliers is by finding your competitors first. That's what you got to think about doing.
Drop-shipping can also work if you do private labeling and have your own fulfillment warehouse, so you can consider that as a business model as well, but that's not what I teach. That's just because I don't want to have to deal with a fulfillment warehouse and importing products. However, you might want to.
If you have a product in mind, let's say skateboard bearings, for instance. It's the little part that goes in the wheel that spins the wheel in a skateboard. You could import those from China with your own brand logo on it in big bulk quantities so maybe it costs less than fifty cents per skateboard bearing packet. You could have it imported into a fulfillment warehouse, like either Amazon FBA or your own private fulfillment warehouse, and then you can set up your e-commerce site, and link it to their inventory feed of your products in their warehouse. Sell it. That fulfillment warehouse will ship it to your customer for you.
That is another form of drop-shipping where you are your own supplier, and that's not a bad way to do it at all. The only drawbacks of that of course is that now you are the manufacturer. You have to handle warranty issues. You have to handle returns. You have to take on some insurance maybe because you have to handle all of the possible downsides and the liability of being the manufacturer now. Just consider that as another method. That's what these guys are taking on for you. They're being your fulfillment warehouse for you. Keep that in mind.
When you do find a competitor, and what I usually just say is if you want to find a competitor online, I would say you can start with Amazon. You can type in … Let’s just try the skateboard bearing example for drop-shipping. Let’s just try longboards because they're a little bit more expensive. The most expensive kind of a skateboard these days is either a mountain board or an electric skateboard. Let's try mountain boards. Those are a little bit more expensive. You can always sort by high to low. You go on Amazon and follow me along right now. I know this isn't showing you the actual screen. Maybe I'll do a separate video on that. Let's just take electric skateboards. That's a good one.
What you would do is you'd go to a listing that shows an electric skateboard brand. Take the name and actually search it in Google. Once you're in Google, you can find, through Google shopping ads, your competitors, and you can then see if that competitor has a retail storefront or not. If they don't, then you know they're drop-shipping. This one that I found doesn't. You can then hit up that supplier, whatever that brand name is, try to find their website online. Once you found their website, then you can call them and say, “Hey, guys. I have an online store,” which I show you how to create in my course, it’s really good, so it looks professional before you call them, by the way. You would then call them and get an account. It's really that simple. It's a super simple process.
I create this course called dropship niche hacks, and that course shows you step by step how to do what I just talked about doing.
There's many other different ways you can find suppliers of course, but that's the best way to find the best suppliers, the ones that are for sure are going to drop-ship for you. You don't have to go through a lot of trial and error talking to suppliers that are going to say, “No, we don't, or yes we do, but we have all these requirements.”
The other thing too is this method of high ticket drop-shipping, you're only working with USA-based suppliers, suppliers that can ship out within two or three days and the product arrives at the person's door within a week to a week and a half at the most. Those are the suppliers that you want to work with because you'll get much less chargebacks because people get their product faster, and you'll have an easier time dealing with a supplier in case there's product damage issues or warranty issues.
There are some extra steps you're going to have to take, which I will talk about later, like fraud prevention and stuff like that because it is higher price products you're selling. You want to avoid for the most part these low-price products because you're going to have to do a lot more volume with those products in order to make a business model out of it. A lot of the time, it really is product specific. You're going to have to test out tons of different products and run all sorts of different ads and stuff like that. It's very time-consuming. Whereas, with this model, you will have a full brands’ line of products in your website, and you pitch that brand, and you run shopping ads.
When someone actually searches for that product, they're going to find you and place the order if you're good enough to do it with, but avoid all these drop-shipping from China apps if you want to use this method, and set up a real long-term sustainable business because drop-shipping from China has a lot of cons. I really don't suggest doing it. If you're going to use China as a supplier, I suggest importing in bulk, storing in your own fulfillment warehouse, private labeling your own brand, even creating a separate website for that brand, and then offering that product for sale in your drop-ship store, maybe even doing Amazon and eBay with it.
Then, of course, in the future, you can always call your online retail competitors and have them upload the products to their website too and sell it for you for a discount so you then become a supplier. I suggest using Alibaba for that method, but avoid AliExpress. It's tough. It's a tough business, and it's tough to make it profitable because you have to do a lot of volume.
All right, guys, with that said, Oberlo is one of those really famous apps. You'll probably see that a lot. Oberlo’s thing is being a third party that connects you with the suppliers on AliExpress. It also provides that same service I talked about, uploading them to your website and then automatically fulfilling them. If you did happen to want to go that route, which I don't recommend, but if you did, then that would be a good app to choose. In this case, it's not. Just make sure that you understand that.
A few more methods. Of course, I talked about the first best method is your competition. Find them. The next is to go to trade shows. Trade shows are really cool, especially trade shows in the US. A lot of these companies are based in the US, and you're going to have, like I said, you're going to have a lower success rate percentage-wise, but you can reach a lot of different brands that might not be marketing themselves online that much. Maybe they're newer or maybe they're just a lot bigger, and they don't consider it, but if you talk to them and market to them, you're potentially going to get a lot of good supplier accounts and they’re probably really high margins. You’ll find some really good gold at trade shows, so go check that out.
Directories. That's another tough one. Drops-hip directories are one of those things where it's hit or miss. It's like going to a trade show. It's hit or miss. The only cool thing about it is that, hey, you don't have to walk around all day long and chat with people and spend a lot of energy and stuff like that. Consider it. Directories, some are paid, some are free. One of the most popular ones is salehoo.com, sale-H-O-O. SaleHoo is not that great, honestly. I've tried it. I used it. A lot of their suppliers, some are drop-shippers and stuff like that, but a lot of them have super high competition.
Every single big retailer is selling their products online, and so you're not really going to find any of those really good golden manufacturers that don't have a ton of online retail competition, and those are the ones that you really want to get. Directories can be hit or miss, for sure. If you want to check out a directory, I'm actually creating one in eCommerce Paradise drop-ship suppliers directory, so look forward to that for sure. Make sure you're signed up to the email list because then you'll get notified as soon as it's ready.
Moving on to the next section. Before you contact suppliers, you really have to make sure that you have some things finished. You're going to have to create a website. You have to choose your niche, obviously. Create a website. Get the domain name, all that stuff. I show you how to do that step by step in my website creation course. You do need to be legal. You have to set up a legal business. If you've never done that before if you're new to business, then you need to take a business course or consult with an accountant or a lawyer because everybody is different. Everybody's situation is different. I can't actually give you legal advice. It's beyond my expertise as an entrepreneur to give you legal advice in your situation, but I will leave you with a couple tips.
That is that a sole proprietorship is the simplest form of business to start, but it leaves you with the biggest amount of risk and liability. If you have assets like a home or a bunch of cash and an investment account, signing up a sole proprietorship sets you at risk to lose those assets in case your business gets sued.
The type of business that a lot of people are starting now is an LLC. An LLC can cost a lot of money, depending on what state you set it up in. It's different for every state, but it does give you limited liability. It stands for limited liability company or limited liability corporation. LLCs, there's a lot of different ways to set them up, and they're taxable like in sole proprietor or like a corporation or like a partnership. LLCs are great. They're really easy. It's usually one or two pieces of paper to fill out and a fee and that's it and you get your LLC. You have to register with the IRS. You have to get an EIN number, which is free, and they have a website for that. You have to get a seller's permit, and then you have to get a bank account, but that's about it. Oh yeah, there's a credit card as well that you'll need.
EIN is free. LLC costs money. Depending on the state, you might have to get a DBA, which stands for doing business as. Of course, like I said, you have to get your seller's permit, which depending on the state, might cost money. It might be free. You have to get your business checking account, which is pretty easy to set up. Usually, it's free with a minimum deposit. Also, you have to get set up a credit card of some sort. If you don't already have a credit card or if you have a personal one, but you want to separate your finances between your business, make sure you have a business credit card.
There's all sorts of ways you can do this, different places you can go. I'm going to be creating all sorts of resource guide, so definitely make sure you sign up for the email list and you'll get those emailed to you as soon as they're ready.
When you go to the supplier, you have to understand how you look to them, how you appear, how professional you seem to them. You want to have your whole script down. I have a supplier sourcing course I'm creating, which is really exciting because I'm going to have actual scripts ready, and I'm going to be probably actually trying to get calls recorded when I'm talking to suppliers so that you can hear what a calls sounds like, what the normal questions are like and things like that. It's really, really cool stuff.
I say a lot of different things because I've been in the business for close to a decade, and a lot of the things I say are because I've been there and done that. When I'm starting a new store, I know the direction I'm headed. I know how far I can take these stores. I know that as if it's already happened. I know that's possible. That's the key.
The key on the phone with a supplier is never to be afraid. Have full confidence in your business, even if you've never done it before. You don't need to lie, but at the same time, you want to make sure that you're confident. You're talking like a real business owner. You don't want to talk like a newbie or sound like a newbie because if you come off like a newbie, chances are you won't get the account. You have to follow up with them later when you have more confidence.
Let's talk about some of the traits of good suppliers that you should look for. There's different types of suppliers, and I'll go over this more in depth in my course, of course. Really good suppliers are essential to running a business and creating the business that follows a lifestyle of your dreams. You don't want to have to deal with a lot of issues all day long. That's not a fun business to run. A good supplier is going to have expert staff and definitely focused on their industry. They're going to be doing a lot of marketing for their products, and they're going to be really friendly and knowledgeable.
They're going to have dedicated support representatives. Those are people that you go to specifically to deal with issues because there are always issues with e-commerce, drop-shipping, fulfillment and business in general. You want to be able to contact specific people that are trained and ready to take your phone calls or emails and actually deal with the situation at hand. Some of these brands I've dealt with in the past are single-person businesses, maybe even have one person on staff. If their product happens to sell a lot, it can be a big pain to deal with support later if they don't have dedicated support representatives. Keep that in mind.
You want a business that's going to have the money and the know-how to invest in their technology. In other words, if they have data feeds and things like that, they have an order processing system, that's technology that really makes your life as a retailer a lot easier. If they don't have those systems in place, that technology, it's going to be difficult dealing with their inventory upkeep and dealing with invoicing and stuff like that. Make sure that they have that kind of stuff.
Make sure that they can take orders via email because having to process orders online is a pain, and it takes a little bit more extra effort and training to do. With an email, you can just print out a purchase order and email it to them. It's a lot easier that way.
Suppliers that are centrally located in the US are definitely a lot better than suppliers that are on either coast because a supplier in Los Angeles will take seven days to get to New York when they ship. A supplier located in the Midwest for some reason, let's say like Salt Lake City, Utah. It takes maybe three to four days to ship to the east coast. If they're located more centrally in the US, it can be a lot faster to ship stuff. It especially comes in handy when you have to ship out replacement parts. It shows up a lot faster, which looks better for you.
Of course, at the end of the day, you just want everything to be organized and efficient. You don't want to have to deal with a supplier that's disorganized and inefficient with their processes because the more organized they are with followup, the better you’re going to look to your customer. You have to make sure you only partner with the best suppliers. Even if they're not the best that you work with them to improve their systems so that your business looks better to your customer.
All right. There are some suppliers I’ve dealt with in the past where they have really bad shipping practices, like they don't ship in thick enough boxes or they have carriers ship them that just destroy the packages and stuff like that. Every single time that happens, you have to tell them about it and raise a red flag because that will continue to happen. It just depends sometimes on the UPS driver. It can depend on the LTL truck driver delivery company. Sometimes if they keep making mistakes, you need to tell them that they probably should be looking for a new source. Sometimes they just go with the cheapest offer and that's what happens. You get what you pay for. Just keep that in mind. If you start having messed up packages arrive once or twice or whatever, let that supplier know and hopefully they can change it.
As far as your options when it comes to paying suppliers, there's a lot of different options for you. You can pay with a credit card. You can pay with net terms. What I always recommend doing is paying with a credit card. Sometimes supplier, they require a bank account and you send directly cash to them because they dealt with maybe some scammy drop-shippers, retailers before or something like that. Always, just do the business credit card thing. That usually works out with 99% of the suppliers out there. Honestly, if they don't take a credit card, you probably shouldn't be working with them anyways. Yeah, there you go. Get a business credit card, one that gives you rewards and cash back and give them that.
That's it, guys. I hope it made a lot of sense to you. That's all the stuff you need to know about talking to suppliers. Like I said, I'm going to be making this supplier sourcing course, so I'm really excited for that, so stay tuned for that. That'll be coming up within the next following weeks or months. If it's already created, you will see a link below where you can go and sign up for that course.
Next, we're going to be talking about finding the best products for drop-shipping, and that goes along with suppliers. Stay tuned for that. If you pay for the full access, definitely get into that next video right now. If you have to wait a day, just go ahead and wait a day and we'll see you in the next video. Take care.
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