As a followup to my last post on drop shipping, many people wanted to know how to find reputable drop shipping companies.
For the majority of new ecommerce entrepreneurs, finding reputable drop shipping suppliers can be a daunting process, littered with scams and dead ends.
In this post, I’m going to show you how to find drop shipping suppliers for your next project, what to look for in a supplier, how to evaluate then, and I’ll even give you access to my personal list of 50 drop shipping companies that I’ve compiled.
Finding Drop Shipping Companies Overview
What Products Should You Drop Ship?
Choosing which product to drop ship isn’t an easy task. There’s many factors, considerations and criteria to consider. Since this is a whole topic on it’s own, your best bet is to read the free 120 page ebook I wrote on choosing the perfect product to sell online. Check that out here: How To Find A Product To Sell Online: The Definitive Guide.
I also have several resources on A Better Lemonade Stand that can help you find and choose the right products to sell online. Check out How To Find Trending Products To Sell Online and my Instant Product Evaluator tool which will ask you a series of 17 questions about your product idea and niche to help you better understand the strengths and weaknesses of your product idea.
However, one of the most important product considerations when choosing a product to sell online and using drop shipping is the retail price point of the product. This is important because margins on drop shipped products are slim, making it difficult to make sizable profits. This can make it extremely difficult if you’re selling $5-$20 products and only making a few dollars per sale. Consider choosing products priced at least $50 and up.
The Drop Ship Supply Chain
A manufacturer is the actual builder of a product. For example, Nintendo is the manufacturer of the Wii gaming console. A wholesaler is anyone who buys directly from the manufacturer and resells to retailers at discount wholesale prices. A drop shipper is anyone who will ship a product for you directly to your customer.
In order to have a full understanding of drop shipping and to find the right supplier for you, it’s important to understand the supply chain.
A manufacturer is the one that actually produces the product. Some manufacturers will have a drop ship program in place which allows you to directly partner with them. This is an ideal scenario because you cut out all the middle men and usually means you’re getting the cheapest price, which allows you to have the greatest margins.
If a manufacturer doesn’t have a drop shipping program in place, then they are most likely working with one or several wholesalers. A wholesaler may also be known as a distributor and is simply someone who specializes in distributing products. These wholesalers (distributors) will purchase products in bulk from the manufacturer and then may offer a drop shipping program which allows you to partner with them. If you are drop shipping goods through a wholesaler, it’s safe to say the price has been marked up from the original price they paid the manufacturer.
Sometimes, additional wholesalers might be involved, which may pretend to be purchasing direct from the manufacturer. In this case, you will be purchasing products at a further increased price. This is where you have to be careful because by this point your margins are going to be razor thin and it can be very difficult to compete.
Attributes of Real Wholesale Drop Shippers
I mentioned above that sometimes fake (middlemen) wholesalers will try to play themselves off as real wholesalers when in reality they aren’t. Real drop shipping wholesalers generally all carry several attributes in common that you can watch out for to help better protect yourself and ensure you’re getting the best possible price:
Real wholesalers generally don’t sell to public – Most wholesalers are focused on selling to other businesses and don’t sell direct to the public.
Real wholesalers require an application – If you can just sign up with an email and name, chances are they aren’t a real wholesaler. Most, if not all wholesalers will require some type of application to weed out the tire kickers.
Real wholesalers require EIN# & Re-seller Certificate (For US Citizens) – Any legitimate drop shipping wholesaler will require some legal information from you to set up an account. In the USA, this is usually a EIN# and re-seller certificate. If you’re from another country working with a US based drop ship wholesaler, just tell them you’re from another country and aren’t required to have those items.
Most real wholesalers have ancient looking websites – Don’t expect a beautiful, modern website. Most real wholesalers haven’t stayed current with the times and have very dated looking websites.
Real wholesalers don’t publish their prices – Because they don’t sell to the public, and want to protect their pricing, real wholesalers do not publish their prices. They will either give you a special login after your application is approved to send you a spreadsheet with their pricing.
Requirements To Work With Drop Shipping Companies
To get into drop shipping, there’s a few things you’ll need to get setup. In the USA, you’ll need an EIN# and a re-seller certificate to work with legitimate drop shippers.
An EIN# is like a social insurance number for your business, so you’ll also need to have a proper business set up. Once you have a company set up, getting an EIN# is an quick process.
A re-seller’s certificate (also called a resale license, re-seller’s license, resale permit, sales tax permit or sales tax ID) is also for Americans planning on drop shipping.
If you’re a US-based seller, this certificate exempts you from paying sales tax for the wholesale products you’re reselling to others. Your customers will pay this sales tax when they buy the product. You’ll collect the money and send it to the state on a routine schedule.
Where To Look For Drop Shipping Suppliers
There are a number of ways to find drop ship suppliers, but 3-4 main ways. In this section I’ll cover the most common approaches to finding a supplier.
1. Contact the manufacturer directly – If you know which product or brands you want to sell the best approach is to contact the manufacturer directly. As mentioned previously, this is the best way to cut out middlemen and get the best possible pricing.
The manufacturer may or may not have a drop shipping program in place, however, if they don’t they should be able to point you to authorized distributors that have drop shipping program established.
2. Search on Google – As you probably can imagine, searching Google is your best bet for finding drop shipping suppliers if you’re willing to work hard to find them.
The most important thing to keep in mind when searching Google for suppliers is that it’s not easy to find them. Wholesale suppliers notoriously have outdated websites and don’t keep up with modern search engine optimization tactics. That’s means that for the first time, you won’t likely find your answer on the first or second page. In fact, it’s not uncommon to have to dive into page 10+ before anything relevant starts to show.
When searching, you’ll always want to use a variety of terms like wholesaler, wholesale dropship, drop shipper, supplier, wholesale reseller, wholesale supplier etc.
3. Purchase a supplier directory – While there are a lot of drop shipping directories online, many of them are low-quality and provide little value. However, there are some legitimate directories.
Some of the best sources can be online supplier directories. These directories can contain profiles for hundreds or thousands of manufacturers, wholesalers and suppliers.
4. Referrals – As you do start to uncover suppliers, even if they aren’t the right fit for you, be sure to ask them if they can point you in the right direction. Being in the industry means they will likely have great contacts and many would be more than happy to refer you to someone that might be a better fit.
Additionally, some of the best leads can come from referrals by friends and family. Social networks have made it much easier to get the word out so make sure to use these channels.
Free Wholesale Drop Shippers Directory
I built out a personal directory of dropshipping suppliers of various products and product categories. Below, I’ve listed a handful of wholesale companies just so you can see the variety of products you can drop ship. For the free directory of 50 drop shipping suppliers, wholesalers & manufacturers, check out the Drop Shipping Suppliers List Google Doc.
|Company Name||Product Category|
|AZ Importers||Hobby & R/C Toys|
|Ah Goo Baby||Child & Baby Products|
|Coffee Bean Direct||Specialty Coffee|
|Essential Pet Products||Pet Products|
|EZ Dropshipper||As-Seen-On-TV Products|
|Cutting Edge||Safety, Security & Spy Products|
|Fragrance Net||Fragrances & Beauty Supply|
|Grey Eagle Trader||Outdoor Gear|
|Guardian Survival||Survival Equipment|
|Morris Costumes||Costumes & Dance-wear|
|Viking Wholesale||Replica Knives & Swords|
Purchase The Premium Drop Shipping Directory
The full directory contains over 150 drop shipping suppliers from many different product categories. Many drop shipping directories charge monthly fees and some even try to charge you hundreds of dollars per year. I am charging a flat rate of $19 for access to my personal, curated directory to cover the time it takes to keep it updated.