Published On: Mon, Aug 14th, 2017

Drop shipping: Read This Before You Sign-on A Supplier

There’s something about drop-shipping that has made this ecommerce model so attractive to many Americans in recent times. One could argue that the low start up capital, complete elimination of the hassles of maintaining inventories, the promise of raking in the cash with little efforts are major attributes that made this online business model appealing – and that wouldn’t be far from the truth.

photo by photoSteve101 via Flickr

Every day, optimistic entrepreneurs launch new drop shipping businesses in hope of finding success – and everyday drop shipping stores close business because of the tough terrain. The reality is – it’s not easy – even though some of the traditional challenges of running an ecommerce store have being eliminated.

To understand this, here’s how a drop shipping model works. A seller (in this case you) opens an online site. A visitor arrives at your store and makes a purchase. You receive the order and forward same to your drop shipping partner. Your drop shipper packages the order and sends to your customer. And the cycle repeats itself. In an ideal case, you never get to handle the order.

But, what do you do when things go wrong – when there are backorders? Lost shipments? And returns? How do you minimize the odds for such cases? The first step is a careful scrutiny and choice of dropshipping suppliers

Here are some questions to ask your dropshipper to ascertain whether they’re a best fit for your business:

Do You Have a Drop Shipping Program For Online Stores?

Well this is the first question you need answer to. Asking your suppliers if the offer drop shipping service for their online clients helps you clarify things. It is also imperative that you explicitly explain the kind of drop shipping you had in mind to the supplier.

Do You Ensure My Company’s Information is on the Package?

It is important for your brand to know just how your orders will appear when they’re delivered to your clients. You don’t want to be taken by surprise with complains from your customers about the packaging and origin of their orders.

There’re dropping shipping suppliers especially those from China – printing their company name and country of origin on the packaging of your orders. So be sure to ask this question.

What Are Your Discount Policies For Drop Shipping?

Understanding what discounts are on offer for drop shipping companies helps you price your inventory appropriately and ensure you mark-up adequately to make a profit.

What Are Your Damaged/Return Policies?

There are two reasons to ask this question; one is to find out the percentage the drop shipper charges for returns. Most dropshippers charge a 25% restocking fee for returns which is a standard practice. Another reason is to make sure their guarantee policy aligns with yours. For instance, if you offer a 30 day return policy, but your dropshipper offers only 15 days, you will still honor yours.

What Are The Requirements to Sign-Up?

You should be aware that most legitimate suppliers will ask for a copy of your resale certificate or your EIN. This helps you make the tax deductibles for each order and remit same to the IRS periodically.

You May Ask To Use Their Product Image On Your site

You may have to ask for permission to use their product image and description on your store; this is because you’re most likely not going to see the products in person. However, due to SEO requirements some may not allow you to use their product descriptions, and you should also write your own unique product descriptions for the same reasons.

How Long does It Take For Orders To Be Processed And Shipped?

Ideally orders should be delivered same day! But, it is industry standard to have orders delivered between 2-3 business days. Asking this question helps you align your shipping with your dropshipper.

Do You Provide Tracking Numbers?

Remember your customers are likely to request for tracking number for their orders, hence getting answer to this questions enables you know how to handle this request when your customers eventually ask you.

Alright, there you have it. Asking these questions will help you filter through a list of potential dropshipping suppliers to choose those that fit perfectly with your business model.

Author: Pankaj Deb

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