| Drop Shippers, the manufacturers or distributors | | | | profits will decrease.Although manufacturers or |
| who are willing to ship their products to your | | | | direct distributors are large companies, some of |
| customers, bring a powerful benefit to | | | | them may not have an established website. You |
| ecommerce. Online businesses that engage in the | | | | can still contact them by calling them or sending |
| wholesale-retail trade can cut down on all the | | | | them a mail. I would recommend that you call |
| hassles of shipping their products by simply | | | | them personally so that there is more room for |
| establishing business relationships with drop | | | | negotiations, and also a warmer 'touch' to the |
| shippers, and using them as part of their business | | | | business relationship.Before calling your drop |
| model. This article will cover the aspects of | | | | shipper directly, you will need to establish your |
| selecting a reliable drop shipper, the process of | | | | business as a legal entity before starting any |
| setting up with drop shippers, and also some of | | | | business trading. Registering your business with |
| the common problems that may arise from | | | | the government involves getting your Tax ID |
| working with drop shippers.Selecting a reliable drop | | | | number, and also your official business name. You |
| shipper is a very crucial element in your drop | | | | can contact your state's administration and find |
| shipping business. If the drop shipper you work | | | | out how to register your business. U.S. citizens |
| with is honest and reputable, you can consider | | | | can get a lot of resources and information on |
| yourself to have won half the battle in the order | | | | registering a business at your business registration |
| fulfillment process. Although this may not be true | | | | is done, you can start contacting your drop |
| in some circumstances, the direct manufacturers | | | | shipper and negotiating with them. There are |
| and the upper level distributors are usually more | | | | several important issues that you have to discuss |
| reliable than the smaller distributors. Manufacturers | | | | with them:1) Shipping. Most of the companies |
| usually produce their products in large quantities, | | | | outsource the delivery of their products to a |
| and require higher capital to finance their | | | | delivery service like FedEx or UPS. Once you |
| companies. More often than not, these businesses | | | | email a customer order to your drop shipper, you |
| are reliable companies, because only businesses | | | | will need to be able to keep track of the status |
| with a strong track record have the ability to | | | | of the delivery. If any customer were to query |
| secure such high capital to finance their | | | | you on when the goods are to arrive, you will |
| manufacturing process.Also, first and second tier | | | | then be able to account for them fully. Established |
| distributors are usually reputable as they are | | | | delivery services like FedEx offer online real-time |
| bigger and more established, since their distribution | | | | tracking services. With the tracking numbers |
| spans a wider region. This is in contrast with lower | | | | issued by the services, you can log on to the |
| tier distributors or middlemen, who make their | | | | internet to track the delivery status of the goods. |
| profit simply by marking up the prices. Some | | | | Alternatively, you can choose to include the |
| low-tier distributors may be fly-by-night | | | | tracking number in the email autoresponders sent |
| organizations or businesses that may shut down | | | | to your customers, so that they can log on to |
| easily due to their small size. Hence, whenever | | | | the FedEx or UPS website to track the |
| possible, you should look for the direct | | | | shipment.You would also need to find out what is |
| manufacturers or distributors of the products and | | | | the delivery service that your drop shipper uses, |
| ask if they offer drop shipping services, due to | | | | and calculate the shipping costs. Shipping costs |
| their reliability. Direct manufacturers or distributors | | | | within a country should be significantly lower than |
| should also be your first choice because their | | | | international shipping, thus it is advisable to select |
| prices have not been marked-up by any | | | | a drop shipper based in the country where most |
| middlemen, and thus the higher your profits can | | | | of your customers are. This not only cuts down a |
| go.(This is not to say that smaller distributors are | | | | lot on shipping costs, it will also reduce the hassles |
| unreliable, there are also numerous honest | | | | of international shipping like customs security and |
| distributors out there with established track | | | | slow delivery time. Additionally, lower shipping |
| records.)Simply phrased, the drop shipping process | | | | costs would encourage more purchases from |
| is as such: You set up a website catalogue selling | | | | your customers, as compared to cases of |
| the goods that you want to sell. After a | | | | international shipping where the high shipping costs |
| customer has placed an order on your website, | | | | can sometimes account for up to half the price of |
| you can call or email your drop shipper to deliver | | | | the goods, deterring them from making |
| the specific quantity of products to your | | | | purchases.Usually, the logistics department of the |
| customer. Your drop shipper will then ship the | | | | drop shipper is willing to label their products with |
| products to the mailing address as specified on | | | | your company name and logo, so that it will |
| the order form.When selecting the products you | | | | appear as if you were the one who shipped the |
| want to sell, you have to also consider the | | | | products to your customers.2) The wholesale |
| shipping costs involved. If your drop shipper and | | | | price of their products. Although this would not |
| your customer base are located in different | | | | vary much among manufacturers of the same |
| countries, you should definitely sell products which | | | | products, some manufacturers do offer a slightly |
| cost in the price range of hundreds or thousands | | | | lower wholesale price than other suppliers for the |
| of dollars, so that the higher international shipping | | | | same product quality. It would pay off much in |
| fee would account for a smaller proportion of the | | | | the long run if you scout around for wholesalers |
| retail price of the product. If your drop shipper | | | | with lower price, as you would make a bigger |
| and your customer base are located in the same | | | | profit on each sale. You can also negotiate among |
| country, it would then be feasible to sell products | | | | several wholesalers first because some |
| that are cheaper as the shipping costs are much | | | | wholesalers allow greater room for negotiation |
| lower.So how should you go about looking for | | | | than others. If your online businesses can have a |
| your product suppliers? The first approach you | | | | guarantee of selling a large quantity of products, |
| can take is through the search engines. You can | | | | you should be able to get a lower price for them, |
| start off by searching for 'Manufacturers | | | | similar to the discount given for bulk purchases.3) |
| directory', 'Wholesalers Directory', or 'Drop | | | | Credit and Billing. You would have to make clear |
| Shippers Directory', and look through the websites | | | | with your drop shipper how you are going to pay |
| containing the lists of such manufacturers. | | | | them, whether it is by credit cards or by checks. |
| Alternatively, you can type your product | | | | Will the payment be made immediately after each |
| keyword together with the word 'wholesale'. For | | | | purchase of goods, or will it be paid after a |
| example, if you want to sell wooden carvings, you | | | | certain minimum quantity of goods is purchased, |
| may want to try the term 'wholesale wooden | | | | or will it be paid at the end of each month? These |
| carvings' and take note of the websites offering | | | | details may appear trivial, but it is important to |
| wooden carvings at a wholesale price. After | | | | clarify all this at the start to prevent disputes |
| which, you can email or call the manufacturer and | | | | later.4) Product Return Requests. Because your |
| check if they offer drop shipping arrangements. | | | | customers expect their products to be of a |
| Or, if they offer the function to sign up for their | | | | pretty high standard, your drop shipper will need |
| drop shipping service on their website, you can | | | | to guarantee you a certain standard of product |
| immediately sign up for it, but only after verifying | | | | quality, and be willing to replace any defective |
| that they have a record of excellent and ethical | | | | products. Be wary of drop shippers that do not |
| service. (You can do this the easy way by | | | | offer these guarantees! If it turns out that many |
| browsing their website. Most of them will display | | | | of their products are defective, then your |
| the awards or commendations they achieved for | | | | reputation is at stake, and you would end up with |
| excellence and reliability.) A good example of a | | | | many useless defective products. Clarify the |
| wholesaler that offers drop shipping registration | | | | process of returning defective products. You may |
| on their website is The drop shipping service can | | | | want your customers to return the products |
| be found on the left navigation bar under | | | | directly to your drop shipper, instead of sending |
| 'Wholesalers'.Remember to target manufacturers | | | | the products first to you, then from you to the |
| as your first choice. You can find a directory of | | | | drop shipper.An agreement with your drop shipper |
| manufacturers and distributors at If you cannot | | | | on their refund policy should be finalized. If they |
| find any manufacturer offering drop shipping | | | | do, you need to determine whether the funds are |
| services, you should then target the direct | | | | to be transferred first to you or directly to the |
| distributors one level below the manufacturers. | | | | drop shipper.In conclusion, the process of |
| Their prices would have only been marked-up | | | | establishing a business relationship with a drop |
| once, and hence the lower your cost. You can | | | | shipper can be quite complicated. However, if |
| locate these distributors by getting the | | | | many of the details are clarified right before any |
| manufacturer to recommend some of the more | | | | transactions are made, your online business should |
| reliable ones. If none of these first-tier distributors | | | | be able to handle all the hassles smoothly.*You |
| offer drop shipping, you then move on to the | | | | are welcome to reprint this article as long as you |
| second-tier, and so on. However, it is not | | | | include the Author's resource box with the article. |
| advisable to go on to the lower tiers, as your | | | | |