DropShipping providers, which are primarily wholesalers and manufacturers who are prepared to supply online retailers on the basis of DropShipping, play a particularly important role in this business model and have a direct impact on business results. For this reason, drop shipping providers must be selected with a great deal of expertise and above all in a strategic manner.
Strategic vendor selection means, above all, adhering to certain standards when it comes to evaluating and selecting drop shipping suppliers. In the following article, you will learn, among other things, why drop shipping providers play such an important role, which standards are meaningful and useful when evaluating suppliers, and how best to proceed if you want to create a high-quality pool of providers for your business model. In this way, you ensure optimal starting conditions and gain a clear advantage over the competition.
Selection of DropShipping providers as a success factor
When we talk about a drop shipping provider, we mean a supplier who supplies you with the goods that you want to sell to your customers in your online shop. The suppliers are usually wholesalers. So we are dealing with companies that do not supply the normal end customer with their offers, but restrict themselves to supplying other companies. In some cases, drop shipping providers may also include a manufacturer who is willing to supply drop shipping dealers directly. As a rule, however, you work predominantly with wholesalers.
But why do these DropShipping providers play such a crucial role when it comes to the success of your business model? On the one hand, suppliers are very important for all types of trade. On the one hand, it depends on them which products one can offer to one’s own customers. This in turn has a direct effect on the popularity of your shop and thus on your sales. In addition, the supplier determines the price at which he is willing to sell to you.
Price is a decisive factor in the selection of suppliers
This purchase price determines the corridor within which you can set your own sales price. On the one hand, the selling price determines how attractive it is for a consumer to buy from you. This in turn directly influences your sales. On the other hand, the difference between the sales price and the purchase price forms your company’s gross profit. The supplier is therefore not only responsible for sales, but also for profits.
When we talk about DropShipping, a special situation is added. As a DropShipping retailer, you do not ship the orders and the products they contain to your customers yourself, but leave this task to the DropShipping provider, who also has a significant influence on customer satisfaction. He finally decides how quickly the customer receives the goods, in what condition they reach him and whether they are professionally packaged.
You are thus handing over a large part of the responsibility for your business model and are dependent on your drop shipping providers working optimally. If this is not the case, your customers will become dissatisfied and will not develop into loyal regular customers.
The choice of suppliers today is almost unlimited
In earlier times trade was much easier than it is today. As a dealer you had only few contacts to suppliers at that time, most of whom were in your immediate vicinity. In this way you had the opportunity to get to know potential business partners very well before starting a business relationship. You could also ask other companies in the area if you wanted to know whether a particular company was a reliable or rather dubious partner.
Today, of course, the situation is completely different. In the course of globalization, the world has become very small. It is no longer a special feature for traders to buy goods directly from faraway countries. Partnerships between parties in regions of Germany that are far apart from each other or trade between European countries are now standard and completely normal. The direct personal impression of a company is thus largely eliminated.
If you operate your business in Northern Germany and cooperate with a drop shipping provider from Bavaria, you will only meet the business partner in exceptional cases. If there are national or even continental borders between you, then personal encounters are not at all up for discussion.
How to build a fruitful business relationship
On the one hand, it is of course great that we are now more or less open to the whole world in trade. Boundless shopping possibilities offer attentive dealers the opportunity to surprise their customers with products and novelties that would otherwise be sought in vain. On the other hand, the market has also become unmanageable and sometimes frighteningly large. When you focus on the whole world, you suddenly have thousands of potential suppliers to choose from who you can supply with specific products.
Their main task today, therefore, is to select the optimal drop-shipping providers from the flood of potential companies and to establish a stable and fruitful business relationship with them. This is not always easy. After all, it is important that your suppliers are inexpensive, reliable, professional and reliable. And often one cannot draw any conclusions about these essential characteristics only from the Internet pages of the enterprises. It is therefore imperative that you develop standardised testing and evaluation procedures that help you to really assess potential partners. Your business success ultimately depends on this.
Your red thread through the DropShipping provider jungle
As a DropShipping dealer you have worldwide suppliers at your disposal from whom you can purchase your products. This represents an opportunity on the one hand and a challenge on the other. They have never before had such comprehensive access to products of all kinds. This is basically very good and allows you to put together really attractive and impressive ranges.
In addition, the strong competition between drop shipping providers has a positive effect on prices. However, you really need to look globally for suitable suppliers if you want to maximize the benefits. And you should carefully review every company you do business with in advance.
Of course, search engines on the Internet potentially offer you the opportunity to discover new DropShipping providers. However, you have three problems to contend with. Firstly, the Internet is primarily tailored to the needs and requirements of consumers. So you have to search quite cleverly to find wholesalers right away and not to end up in end customer shops again and again.
Secondly, linguistic barriers must be overcome. Even if you are familiar with different languages, the question still remains as to how well you are able to perceive the subtleties of content that often tell you whether you are dealing with a professional or rather dubious company. And third, you need to put every single drop shipping provider you want to work with through its paces. And this is only possible via Internet not always quite simply.
Use professional portals for provider research
One way out of the dilemma is to use business search engines that specialize in drop shipping. In our database, for example, you will currently find more than 700 DropShipping suppliers who supply you with well over 4 million different products.
By using such a possibility you save yourself the time-consuming search for suitable wholesalers in the net. In addition, you do not have to explain to these suppliers what DropShipping actually is. The DropShipping providers listed here are already professionals in this field, so you can start cooperating with the companies immediately.
With the right strategies, choosing the right provider becomes child’s play
Especially for beginners and newcomers it is not always easy to take the right steps on the way to becoming an optimal DropShipping provider. With increasing experience, this task becomes easier for dealers. But at the beginning you can use a little support. For this reason, we provide you with a total of five selected strategies that you can use to make the selection of your DropShipping providers as successful as possible right from the start.
Work through the individual strategies one by one and then select the ones that are most convenient for you. From the outset, it is best to make it a habit to be strictly strategic when evaluating and selecting suppliers.
Rely on the first impression
We know this situation mainly from our private lives. You get to know a new person and before you know much about your counterpart, you have already made a first impression. This can be both positive and negative. Surprisingly, in very many cases, one notices clearly later that this first impression was correct. If one trusted one’s intuition more, then one could often save a lot of time and directly rely on the first impression. The same applies to the evaluation of drop shipping suppliers. Here, too, you often have a clear idea of what to think of this potential partner from the very first contact with a company.
Now, of course, the question arises as to what conclusions one should draw from such an impression. Let’s assume you have a subjectively bad impression, then it would certainly be too hasty to drop the potential supplier immediately. On the other hand, you should not simply ignore your intuition. She often gives you valuable and important hints. When you are confronted with new companies, pay careful and attentive attention to small signals that you receive, for example, on the website. If you have any doubts about the seriousness or professionalism of a potential partner, then it is imperative that you investigate them.
Standardized searches for knowledge gain
We live in the information age and today it is very easy for everyone of us to get an incredible amount of data, details and information about any company from a PC. For example, we can visit the websites of interesting DropShipping providers and look for hints there. We can search the Internet freely, for example to track down dissatisfied customers from potential suppliers, or we can check databases and publicly accessible registers to see if we can find information about a particular company. Problematic in this context: Especially the vast amount of available information and sources makes it very difficult to obtain a fast and accurate assessment.
We therefore absolutely need a standardized approach to our research, which pays off especially when we want to compare different DropShipping providers with each other. First of all, we should define very specific criteria. These could, for example, relate to factors such as the size of a company, its reputation, the product areas it represents, its legal form, annual turnover, network valuations, location or similar criteria. In the next step, we can then begin to search specifically for the information we need to fill the individual factors and criteria with content.
Log the reaction times of the partners
In business life, the most important thing between business partners is the highest possible degree of reliability. Of course, this is especially true when it comes to drop shipping business models. As a retailer, you must be able to rely on the selected drop shipping providers at all times. After all, the success of the entire company depends to a considerable extent on their performance. Imagine, for example, that one of your suppliers does not ship the orders forwarded to him within one or two days, but only after a week. That would be pre-programmed the dissatisfaction of your customers. And dissatisfied customers will certainly not order from you again. The same applies if the goods are not attractively packaged or if the products are not in good condition.
If you ask a potential DropShipping provider during the initiation whether he works reliably, he will answer you with “Yes”. Who would be honest here if he doesn’t really have so much reliability to offer? This presents you with the challenge of finding out how the supplier really works. Simply log all reaction times. For example, the time that elapses before you receive a callback, before a quote is created, or until a sample is shipped. This allows you to draw conclusions about the real reliability.
Get a personal impression of our products
We live in the digital age and as a DropShipping retailer you should take advantage of all the benefits that this brings and work for yourself. An essential feature of modern communication is that we can access almost any information without having to leave our desk. The World Wide Web connects us in a comfortable way with the whole world and this is of course also noticeable in the selection and evaluation of DropShipping partners. Here we can use the Internet to really research a lot of information about companies that could potentially be considered as suppliers. However, you should not rely exclusively on what you can read about a company on the Internet. After all, the truth content here is often very difficult to verify.
In order to get a really objective picture, one should supplement the impression one first got on the basis of the research with a personal assessment. Ideally, you should take the opportunity to get to know the DropShipping provider in his own rooms during a personal meeting. If this is not possible because of the distance, you should at least make a longer telephone call and concentrate on obtaining further relevant information and completing your own impression.
In difficult times, true qualities are revealed
With regard to personal friendships, this is clear to everyone: how well an interpersonal relationship really is is only recognized when things are not going so well. After all, it is not particularly difficult to stand by people when they are doing well anyway. But what does it look like when there are problems and conflicts, when difficult situations have to be overcome and when life is complicated? Only then does one learn who the real friends are and immediately recognize in whom one may have been wrong.
In business life, the situation is no different. If everything goes well and there are no problems, then it is not particularly difficult to be a good business partner. Only when problems arise do you get to know the selected drop shipping providers really well and notice who you can rely on and who turns out to be a disappointment instead. This experience cannot be replaced by thoroughly checking the individual supplier in advance. Here we simply have to wait and see what the concrete behaviour is when it becomes difficult in the context of cooperation. If you discover that you are wrong about the good features of the DropShipping provider, you can still withdraw and look for new partners.
Of course it is very important to evaluate your suppliers as accurately as possible before starting a cooperation. However, this necessity does not end with the beginning of the cooperation. You must continue this permanently and in this way find out how good your partners really are.