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Starting a Dropshipping Business: Product Sourcing Strategies

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On the surface, it appears dropshipping is an e-commerce business owner’s dream.  There are no products to keep on hand, shipping or much else.  Basically, all you do is kick back and let the dollars roll in.

If only it were truly this simple.  You have to find the products you want to sell before you can do anything, and that starts with sourcing your products.

E-commerce business lives and dies on the customer and their satisfaction.  In the dropshipping business, product quality is even more important.  You have to find a business partner – one that will be in charge of finding and shipping the products on your behalf.  This, on the same level as your products themselves, is key to a successful business model.

Product sourcing is not about the product and price.  It is about the supplier being able to meet the customer demands within reason – shipping and returns – plus several other elements.

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If you are interested in the dropshipping model as a business, keep reading.

Dropshipping definition

Those new to dropshipping will benefit from the following.  Dropshipping means you do not have any inventory on hand or need to do any shipping.  You make a sale, and your partners will handle the rest of the work on your and the customer’s behalf.

You start with a business front or on somewhere like Amazon where you will have a list of your products.  A customer makes a purchase, the sales order goes to your business partner and the order is filled.  You receive a percentage of the sale.

On the surface, this looks like quick and simple money.  After all, how difficult is it to sell other people’s products and earn a percentage without worry about all of the business details?

Actually, there is quite a bit to worry about.

Starting in the dropshipping world is not going to be easy.  You are up against established businesses with ample experience and customer bases.  They are already moving the products you are looking to sell.  This is going to be an uphill battle.

Product Sourcing Strategies

Finding the best products is not impossible.  All you need are the strategies to find them.

Research the Internet

There are already plenty of dropshipping companies online and selling products.  This means there are plenty of directories and platforms with list of suppliers available.  This will significantly cut down on the time you will spend doing research.

The adage: Garbage in; garbage out is certainly true here.  If you choose the first supply company you find, chances are you will not get the products you are after.  Put in the time and effort to find a quality supplier.  You will gain the competitive edge you want over your competition.

Reverse engineer

It is a pretty good idea to find what suppliers your competition is currently using for their products.  Look for a product you like and a drop shipper.  Go to the manufacturer’s site.  You want to find terms like ‘dropshipping’ and ‘wholesale.’  Do you want to get serious about it?  Find a phone number or email, and contact the manufacturer directly.  More on this in a moment.

Scammers abound

Dropshipping is a popular business method.  This makes the format an ideal place for scammers to look for unsuspecting new business owners.  Here is a partial list of common scammer characteristics:

Membership fees

The honest dropshipping suppliers make their money on sales.  If you see a fee to signup to start listing products, this is a huge red flag.  The same is true for directories and other platforms – there are plenty of free sites with the same services.

Pricey

Check all wholesale prices for consistency.  Prices that are exceptionally high could be a scammer looking to make profits on the difference.

Reaching out directly to the manufacturer

Dropshipping is one of the more direct ways to work with supply partners.  If you need to contact them for some reason, do so.  There are times you may find someone who has not done the dropship model, and if so, this is an awesome opportunity for you and for your supplier.

Final thoughts

Dropshipping has a unique advantage over other e-commerce models because of the tight relationship offered.  This means you need to be exceptionally careful with finding quality suppliers.  Be sure to review their reputation before moving too far forward.