The Ultimate Guide To High-Ticket Drop Shipping For Beginners Lesson 3: How To Find the Best Drop Shipping Suppliers
The Ultimate Guide To High-Ticket Drop Shipping For Beginners Lesson 3: How To Find the Best Drop Shipping Suppliers
Hey guys, Trevor here with eCommerce Paradise. Welcome back to Module Three.
This is the third lesson in the "What is Dropshipping?" mini-course. This lesson is going to be all about finding and working with dropshipping suppliers or known as dropshippers.
Yes, a dropshipper isn't just you and me. A dropshipper is a supplier. And you and me, we are online retailers; we are eCommerce marketing professionals.
You have to understand the suppliers. 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. This is so 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. Many people who get into dropshipping in eCommerce start by looking for dropshippers online by typing in the word dropshipper plus their niche word.
Let's just say, you're selling skateboards, for instance, skateboard drop shipper, if you type that into YouTube, The first thing that comes up is wholesale2b.com. That's what comes up right now.
Looking at what they do, they have free access to over 1 million dropship products, guaranteed the lowest prices online. You can get started for free with no credit cards needed. And then, 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 are a lot more of them out here like this.
What they're doing is they're presenting themselves as if they're a dropshipper 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 a middleman fulfillers. 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, 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. And Wholesale2b is dropshipping 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 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 to access their wholesale platform. These are known as fake dropshipping suppliers. While some of them offer a nice service of connecting you with wholesalers that you may not have known existed, you can always get those connections direct yourself. You don't have to pay for 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 make it. It'll instantly upload to your website and update the listings when things go out of stock or when things are discontinued or when 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 or not. And 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. Most of the time, you will not find actual suppliers by just typing in dropshipper and going to Google. The way you find actual suppliers is by finding your competitors first. That's what you should do.
Dropshipping can also work if you do private labeling and have your own fulfillment warehouse. 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 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 a little part that goes in the wheel that spins the wheel on a skateboard, you could import those from China with your own brand logo on it in large bulk quantity. Maybe it costs less than 50 cents per skateboard bearing packet. You could have it imported into a fulfillment warehouse, like either Amazon, FBA, or your own private fulfillment warehouse. You can set up your eCommerce 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 dropshipping, where you are your own supplier. And that's not a bad way to do it at all.
The only drawback of that 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 because you have to handle all of the possible downsides and the manufacturer's liability now. Just consider that as another method.
But that's what these guys are taking on for you (Wholesale2b). They're your fulfillment warehouse for you. Keep that in mind.
Find a Competitor Online.
You can start with Amazon. Now, when you find a competitor you can type in, let's just try mountain boards. Those are a little bit more expensive. And you can always sort by high to low, right? If you go on Amazon, go to a listing that shows an electric skateboard brand, take the name and search it in Google. Once you're in Google, you can find through Google Shopping ads, your competitors.
You can then see if that competitor has a retail store or not. And then, if they don't, you know they're drop-shipping. And this one that I've found doesn't. You can then hit up that supplier, whatever that brand name is, 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'll show you how to create in my courses. It's really good.) Make your online store look professional before you call them. Call them and get an account. It's that simple. It's a super simple process. I'll 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 are many other ways you can find suppliers, 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 to do is this method of dropshipping, the high ticket dropshipping. You're only working with USA based suppliers. Suppliers that can ship out within two or three days, and the product arrives at your client'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 fewer chargebacks. That is because people get their products faster, and you'll have an easier time dealing with a supplier, in case there's product damage issues or warranty issues.
You're going to have some extra steps to take (which I will talk about later) like fraud prevention because you'll be selling higher-priced products. For the most part, you should avoid these low price products because you're going to have to do a lot more volume with those products to make a business model out of it. And a lot of the time. 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 brand line of products on your website. You pitch that brand, and you run shopping ads. When someone searches for that product, they're going to find you and place the order, if you're good enough to deal with. But avoid all these dropshipping from China apps if you want to use this method and set up a real longterm sustainable business. Dropshipping from China has a lot of cons, and 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 and private labeling your brand. Create a separate website for that brand. Offer that product for sale on your dropship store, maybe even do Amazon, eBay, with it. Of course, 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. You then become a supplier. I suggest using Alibaba for that method. Avoid AliExpress. It's a tough business. And it's tough to make it profitable because you have to do a lot.
Oberlo is one of those 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 into 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.
Go to Trade Shows
The next method 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. You're going to have a lower success rate, percentage-wise, but you can reach many 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 probably with really high margins. You find some really good gold at trade shows. So, go check that out.
Directories, that's another tough one. Dropship 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 you don't have to walk around all day long and chat with people and you spend a lot of energy and stuff like that. Some directories are paid, some are free. One of the most popular ones is salehoo.com. I've tried and used it already.
A lot of them have super high competition. Every single big retailer is selling their products online, and you're not really going to find any of those really good golden manufacturers that don't have a ton of online retail competition. Those are the ones that you really want to get.
If you want to check out a directory, I'm actually creating one in the eCommerce Paradise dropship suppliers directory. Look forward to that. Make sure you're signed up for the email list. If you are then, you'll get notified as soon as it's ready.
Moving on to the next section.
Before you contact suppliers, make sure you have some things finished. Finish your website, get a domain name, and choose a niche. I'll show you how to do that step by step, on my website creation course.
Set Up a Legal Business
You have to set up a legal business. If you've never done that before, if you're new to the business, you need to take a business course or consult with an accountant or a lawyer.
I can't actually give you legal advice. It's beyond my expertise as an entrepreneur to give you legal advice in your situation.
I will leave you with a couple of tips.
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 in an investment account, signing up as sole proprietor sets you at risk to lose those assets if your business gets sued.
Limited Liability Company (LLC)
The type of business that a lot of people are starting now is a limited liability company (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. There are a lot of different ways to set them up. They're taxable like a sole proprietor, corporation, or 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. You get your LLC. You have to register with the IRS. You have to get an EIN, which is free. They have a website for that. You have to get a seller's permit, a bank account, a credit card, and that's about it.
Depending on the state, you might have to get a DBA, which stands for Doing Business As. You have to get your seller's permit, which depending on the state, might cost money, or it might be free. Then, you have to get your business checking account, which is pretty easy to set up. Usually, it's free with a minimum deposit. And also, you have to get set up a credit card of some sort. If you don't already have a credit card or have a personal one, but you want to separate your business's finances, make sure you get a business credit card.
Now, there're all sorts of ways you can do this. Different places you can go to. I'm going to be creating all sorts of resource guides. Make sure you sign up for the email list, and you'll get those emails 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, and how professional you seem. 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. I will probably, try to get calls recorded when I'm talking to suppliers so that you can hear what a call sounds like and what the normal questions are like.
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. And I know that, as if it's already happening, I know that it's possible.
And yes, 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.
Traits of Good Suppliers
Let's talk about some of the traits of good suppliers that you should look for. There're different types of suppliers, and I'll go over this more in-depth in my course.
Good suppliers are essential to running a business. You don't want to have to deal with a lot of issues all day long. That's not a fun business to run.
Have Expert Staff
A good supplier is going to have expert staff and are 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 the people you go to specifically to deal with issues.
There are always issues with eCommerce dropshipping fulfillment and business in general. And so, you want to contact specific people who are trained and ready to take your phone calls or emails and actually deal with the situation at hand.
I've dealt with some of these brands 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.
Have Invested in Their Technology
You want a business that will 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 the technology that can make your life as a retailer a lot easier. If they don't have those systems in place, that technology, it will be difficult to deal with their inventory upkeep and dealing with invoicing. 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 effort and training to do.
Suppliers that are centrally located in the US are definitely a lot better than suppliers on either coast. A supplier in Los Angeles will take seven days to get to New York when they ship. But a supplier located in the Midwest takes me three to four days to ship to the East Coast. If they're located more central in the US, it could be faster to ship stuff. It mostly comes handy when you have to ship out replacement parts. It shows up a lot faster, which looks better for you.
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. 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.
If they're not the best, work with them to improve their systems, so that you know your business looks better to your customer.
And there're some suppliers I've dealt with in the past, where they have really bad shipping practices. They don't ship in thick enough boxes or have carriers shipped in, which 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 could 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. Keep that in mind. If you start having messed up packages, arrive once or twice or whatever, let that supplier know. Hopefully, they can change it.
As far as your options, when it comes to paying suppliers, there are many different options for you. You can pay with a credit card or net terms. What I always recommend doing is paying with a credit card.
Sometimes suppliers require a bank account so you can send cash directly to them. That may be because they dealt with some scummy dropshippers or retailers before or something like that.
Do the business with your credit card. That usually works out with 99% of the suppliers out there. And honestly, if they don't take a credit card, you probably shouldn't be working with them anyways. Get a business credit card, one that gives you rewards and cashback.
That's it guys.
That's all the stuff you need to know about talking to suppliers.
I'm going to be making this supplier sourcing course. Stay tuned for that.
In the next episode, we're going to talk about finding the best products for dropshipping. That goes along with suppliers. Stay tuned for that.
If you paid for the full access, definitely get into that next video right now. And if you have to wait a day, just go ahead and wait a day.
See you in the next video.
Step-By-Step Training for High-Ticket Drop Shipping
Here are the next steps you'll need to take to start your high-ticket dropshipping business:
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eCommerce Paradise was created by Trevor Fenner of Seattle, Washington in 2015 to help you, the entrepreneur, to start and scale your own eCommerce business selling high-ticket products online with the drop shipping fulfillment method so you can make more profit per sale, have a sustainable and evergreen online business, get started with very little upfront investment, and live a location independent lifestyle. Trevor owns multiple 7-figure High-Ticket Drop Shipping eCommerce stores and is a digital nomad, traveling the world while working remotely with the help of his team of over 10 virtual assistants from around the world. Trevor is currently located in Bali, Indonesia. Trevor is also a passionate skateboarder, surfer, scuba diver, photographer, environmentalist, outdoorsman, fitness and tattoo enthusiast.
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