If you’re thinking about starting a dropshipping business in 2022, it can be a very smart financial choice. The dropshipping industry is expected to reach $557.9 billion by 2025 and a lot of online merchants would rather use a dropshipping service than keep their own inventory.
But one of the biggest decisions you can make when you start your business is what supplier you will use. If you make the wrong choice, it can doom your business because a dropshipping business model with a bad supplier leads to various problems that result in unsatisfied customers.
Here are all of the factors to consider when choosing your supplier.
Use E-procurement
Technology is one of the best things that ever happened to the business world and there are a lot of tools every small business owner should use. For those running a dropshipping business, e-procurement is an essential tool.
Electronic procurement, better known as e-procurement, is the sale and purchase of services, works, equipment, and supplies through a networked system such as a web interface. The point of this technology is to automate and centralize the interactions between value chain partners.
Here are some of the primary functions that eProcurement systems provide:
- Automating processes to reduce errors and free up resources.
- Providing streamlined navigation between stakeholders and partners.
- Providing one platform for all activities related to procurement.
- Improving communication between partners and stakeholders, which allows the procurement cycle to be streamlined.
- Offers updates in real-time for all vendors, partners, management, and stakeholders.
One of the biggest benefits of using e-procurement is automating laborious tasks. This includes document management for purchase orders, price negotiation, evaluating and selecting suppliers, and more.
It also provides you with visibility for your purchasing behaviors which will allow you to see exactly how much your organization spends and what your funds go toward. There are a lot of reasons why you should opt for e-procurement and if you opt for one of the best e-procurement systems on the market, you will make your job much easier.
Know What You Want to Sell
One of the first things you should decide when starting your business is what exactly you will be dropshipping. Let’s say for instance you want to start a coffee dropshipping business, you will need to have a great website and amazing products but also good branding and very little risk involved.
Once you have decided what products you want to sell, you need to find a supplier that meets your needs and the requirements you have based on the niche you’re in.
For example, if you’re selling something that is perishable, you need to ensure your supplier will be able to distribute the products in a safe manner. This isn’t an unreasonable request at all considering a lot of businesses offer online food delivery, and the industry is expected to reach $324,556 million in 2022.
You also need to decide if you want to work internationally or just offer your products locally. If you’re interested in working with an international market, you need to ensure your supplier is able to send your products worldwide.
Look For Someone Who Is Organized and Efficient
There are many dropshipping suppliers out there. Some only employ competent workers who are determined to be as efficient as possible and fulfill orders with little to no errors and mistakes. On the other hand, some are sloppy and irresponsible and a living nightmare for dropshipping businesses.
However, it can be hard to determine which companies are worth the money unless you actually work with them. But you can work around that issue by placing a few test orders from the companies you’re considering working with and seeing how they operate.
With these test orders, you can find out:
- In what way the company handles the orders they process.
- How long does it take for the items you ordered to ship.
- What kind of packing do they provide for the items they ship and if the products you ordered arrived in good condition.
- What kind of tracking information the company provides and if the invoice arrives rapidly.
Be On the Lookout for Fake Dropshipping Suppliers
As we already mentioned, the dropshipping business is very profitable and popular, which is why there are a lot of untrustworthy suppliers on the market. Sometimes it’s hard to pinpoint these suppliers, but there are a few things you should do to put your mind at ease:
Contact the Supplier
Contact suppliers to find out some important details. Ask about their business verification such as licensing because legitimate businesses will always be willing to provide you with credentials. This will also give you a chance to start building a relationship with them.
Check the Feedback and Reviews
If you’re using an open marketplace such as AliExpress or something similar, you can easily find feedback. Bad suppliers will be flooded with negative feedback and it will be easy for you to see who you should avoid.
Look Out for Fees
A lot of fake suppliers will ask you to pay a monthly fee just because you’re doing business with them. You will be required to pay a fee for every order but not on a monthly basis when you’re working with a trusted supplier.
Final Thoughts
With so many different dropshipping suppliers to choose from, it can become overwhelming to choose just one and be certain you’ve made the right call. But if you follow the advice you read about here, you’ll be able to discern the good from the bad and pick a supplier who will give you everything you need.
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