Now that you have learned how to find your ideal profitable drop ship niche and set up the foundation of your drop ship website, you're ready to learn how to find legitimate drop ship suppliers who will store and ship your products to your customers. If you'll recall, on day 1 "Niche It" I taught you about finding a winning drop ship niche, I showed you how to research and make a list of your real competitor drop ship websites. Today I'll teach you the top 4 types of drop ship suppliers and reveal my 2 strategy formula on how to quickly and easily find legit suppliers to work with.
To begin let's clarify what a supplier is and what types of suppliers there are.
So what is a drop ship supplier?
A drop ship supplier is a company who has a warehouse stocked with product and will ship those products to your customer on your behalf after you sell them. Remember this image from the 1st day training?
A dropshipping supplier allows you to retail their products for a profit and they take care of the rest. You would still fulfill the customer support, but when it comes to storing and shipping the product, your drop ship supplier will do all that for you! And this is one of the major reasons why building an ecommerce business working with drop ship suppliers is one of the easiest top 3 approaches to implement to make great money online (the other two being affiliate marketing and service oriented businesses).
Many drop ship suppliers will have their own customized set of rules to follow, but most of them will be the same. The best suppliers are usually a bit more challenging to find. It takes some time to research them out and then contact them to ultimately get accepted but it's worth it. Let's talk about the 4 major types of drop ship suppliers and then I'll teach you how to easily find the dropship suppliers you will need to consider working with.
4 major types of dropshipping suppliers
- Open door suppliers: Easy to find. Very loose application requirements, if any. Everyone can apply and get accepted immediately. Some of them charge a fee to be accepted into their program. Since there's no price regulation (M.A.P.) contracts in place the pricing competition among other retailers is extremely challenging - usually a down hill battle - and therefore can be more challenging to make a profit with these suppliers if you are trying to sell these products as your core products. It's best to sell products from open door suppliers as up-sells, instead of directly. These suppliers will not have a M.A.P agreement for you to sign so you can share an example with them and ask them to develop one. Click here to access open door suppliers.
- Private label drop shippers: You have 100% control over the brand and product retail price. They fulfill it and ship it for you. Work with these suppliers when you want to create your own brand and want to have freedom over the retail price. Whatever you choose the retail price to be it shall be. There are hundreds of private label drop ship companies researched and available to choose from here.
- M.A.P. suppliers: Best to research and find these suppliers on your own because they will want to speak with you personally. They care a great deal about your character and integrity. They care about solid relationships. Can be challenging many times to secure a relationship with. Definitely worth the time scouting out these suppliers though. They have Minimum Advertised Price contracts you must sign before you can retail their products. Learn how to find M.A.P. suppliers here.
- Exclusive suppliers: these suppliers will usually only approve to work a limited number of retailers such as yourself. They will have strict requirements. You will come across these suppliers once in a while and if you do it might be worth it for you to jump through their hoops to establish a retail relationship with them.
The best suppliers are the last three: private label, M.A.P. and Exclusive suppliers. Those supplier types will have at minimum these standards and rules to follow before they will agree to allow a retail relationship with you:
- Website: You must have at least a basic website up and running (it doesn't necessarily need to be launched, it just needs to be set up so you can potentially share it with your supplier if they ask. This is why I taught you how to set up your basic drop ship site in the previous step.)
- Possibly a business entity: I say possibly because this really it will really depend on the supplier, but most solid suppliers will require that you have an Empower Identification Number and possibly a sales tax ID. Not all require this, but it's best to be prepared and get the ball rolling with setting up an entity, such as an LLC or corporation, etc. Depending on where you live these business entity types will be different. Speak with your tax advisors and/or attorney to help you determine what entity is best. NOTE: you do not need to have an entity in place to move forward though with building up your drop ship site.
- High level of integrity: your suppliers are going to trust you not to damage their brand and reputation they have established. They need to know you are a person of integrity, that you are honest. The better you can prove these traits to your suppliers the sooner you'll be able to work with them.
- Confidence: when speaking with suppliers you should be the type of person to believe in yourself, regardless if you are brand new to the drop ship game or not. Be confident can get accepted a lot faster.
Once you are accepted with your suppliers they should be able to give you access to everything you need to retail the products on online. For example, you should receive a data feed or CSV file from them providing you whole sale prices for all products, image links, inventory status, shipping/tax data, and so forth. From there you can use that data to populate your website with.
2 strategies to finding legit drop ship suppliers
1st strategy: Directories (why and why not)
The best and most effective and free approach to find real, legit dropshipping companies you can work with is to research them out yourself and speak with them directly. You can find dropship suppliers for free, the only cost is the time it will take for you to sift through the Google.com and/or Bing.com search engine results to find them. If you believe you lack the time or patience or skill to research them out then I recommend setting up an account with any of these top 3 verified dropship directories:
- DropshipXL - visit us here - While there is a directory benefit to the service there are many other benefits as well such as teaching you how to be a great success building a drop ship business and much more.
- SaleHoo - visit their site here - They focus on helping you find products you can sell on Amazon. If that is of interest to you this is a great choice.
- WorldWidebrands - visit their site here - This partner company has been around the longest and is arguably the best online and well established directory on the internet. They work a lot with trade shows and have a great filtering process they take before accepting supplier applications into their directory.
Again, if you don't have the time, skill or patience to take the best approach to researching suppliers out yourself and speaking with them to establish a relationship quicker, then any of the top 3 directories are legit and will help you save time finding them on your own.
2nd strategy: Research niche competitor websites
After teaching you all about how to find your ideal profitable drop ship niche in Day 1 training you should have found around 5 to 20 competitor drop ship websites (remember these are people selling the same products you want to and have no warehouse).
You should take the time now to visit each competitor website and research their website specifically for the "brand names" or "manufacturers" they work with. When you see the names of the suppliers you can extract that data and place it on your tracking spreadsheet. Sometimes the product listings in their store will reflect the name of the brands they work with, sometimes it's as easy as looking in their navigation bar, or footer, or sidebar and some times on other pages. You might have to do some digging. Many times there will be 10 or more suppliers, sometimes hundreds listed out.
After you have researched your competitor drop ship websites you should now document all of the brand/manufacturer suppliers they work with into a master spreadsheet so you can keep track of them and then contact them to get accepted. As you call them some might not accept your request to work with them right off the bat, that's okay. Keep trying and going through your list until you have been accepted with at least 5 or more suppliers for the same products. The more suppliers you have the more flexibility you will have and the more traffic you can generate!
