Table of Contents
- 1. What is dropshipping?
- 2. Why it is important to find the right dropship suppliers?
- 3. Should I Dropship or Buy in Bulk?
- 4. How to Start Looking for IT Wholesalers that offer Dropship Services?
- 5. What’s required to work with a Dropshipping Company or an IT Distributor?
- 6. How to Contact a Dropshipping Supplier?
- 7. What Questions should I ask a Dropshipping Supplier?
- 8. Common Problems with Dropshipping
- 9. Things to Consider when Choosing a Dropshipping Supplier
- 10. Ways to Avoid Dropshipping Scam
- 11. Here’s how to spot a fake supplier
- 12. How VARStreet can help the IT VAR?
1. What is dropshipping?
Dropshipping is the process in which a reseller does not stock the product that they are selling but rely on suppliers or distributors to stock, package and ship the orders on their behalf.
An IT dropshipper is involved in the drop shipping of IT related products. These products may include laptops, printers, PoS machines, servers and fax machines, among others. IT distributors stock various brands and have a huge range of product portfolio.
2. Why it is important to find the right dropship suppliers?
In a dropshipping business model, you completely depend on your suppliers to successfully run your online business. From inventory storage to packaging and shipping of orders, the supplier is responsible for each phase of the order fulfilment process. Customer satisfaction is also crucial for a successful dropshipping business.
A poorly packaged item, delay in delivery or sending the wrong product can damage your brand reputation and ultimately decrease customer satisfaction. Hence, take your time and ensure that you choose the right dropshipping supplier for your online business.
3. Should I Dropship or Buy in Bulk?
When you buy in bulk, it is imperative to rent a space to store these large quantities of products. Renting a warehouse for storage can be expensive and substantially increase your operational cost. Your company will have to handle packaging and shipping of products, thereby putting additional burden on business expenses
Dropshipping is a far better option as you don’t require any upfront investment to store inventory. Nor are you responsible for packaging and shipping. Your dropship supplier handles the order on your behalf.
You do not need to have an office either as you can run your business from anywhere! Due to the low investment required in a dropshipping model, you can start a dropship e-commerce business while working full time.
4. How to Start Looking for IT Wholesalers that offer Dropship Services?
Study the distribution channels of the Industry
The process of a product going from a manufacturer to a customer is different for different industries. There can be different types of dropshipping IT wholesalers which may include manufacturers, importers, exclusive distributors, regional distributors, wagon peddlers, etc. Finding where you fit in this process can help a great deal in finding the right IT supplier.
Search on Google
Google is the most popular web search engine in the world today and used to find information on absolutely anything under the sun. Once you decide what IT product to resell search for “wholesale dropship suppliers for product X” in the Google search engine. You can try different combinations to find what you want. Choose results from the first and second page to view some of the best IT wholesale dropshippers.
VARStreet Distributor Page
VARStreet’s distributor page can provide you with a wealth of information about some of the leading dropshipping suppliers in the IT industry. VARStreet’s e-commerce platform is connected to 40+ IT distributors in USA including Ingram Micro, Synnex, Tech Data, D&H, Digitek, Supplies Wholesalers, ScanSource, etc. The distributors provide a range of IT products and are well-known for their reliable dropship services.
Contact the Manufacturer
Most manufacturers have well-established connections with some of the best dropshippers in their industry. After you have decided what products to sell, contact the manufacturer and inquire about their wholesale distributor connections. Get in touch with these distributors and check if they offer dropship services.
Order from the Competition
Order from your competitors to know which dropship supplier they use. The package will usually have a return address or a contact number.
Ordering samples from a dropship supplier gives you an excellent opportunity to evaluate suppliers on various parameters. When you place an order, you can find out whether the supplier is capable of delivering products on time, the product quality and check if the supplier is using good packaging material.
Use Supplier Directories
Supplier directories like Worldwide Brands, Doba and Wholesale Central provide in-depth information on reliable suppliers. Most suppliers listed in these directories are pre-screened to ensure suppliers are genuine. Although you have to pay a membership fee to access these directories, it is worth the investment. The information available in these directories is invaluable, and you get easy access to many suppliers in one place.
Focus on networking
Due to fear of competition, not many IT resellers are willing to share information on dropshipping wholesalers. It is advisable to build a network to extract this information. A strong relationship with an industry insider will help you acquire beneficial information. Online forum participation, industry newsletter subscriptions and presence on networking websites will ultimately help you in finding a reliable dropshipper.
Attend trade shows
Trade shows help to grow your business as well as your network. They provide you with the opportunity to interact with the manufacturers, wholesalers and other stakeholders of your industry. Attend your industry trade-shows, they are great for networking and obtaining industry information and exposure.
5. What’s required to work with a Dropshipping Company or an IT Distributor?
Sales Tax ID
It is mandatory to have a sales tax ID, also referred to as a reseller’s license, to start a business in the US. You can easily get this from your sales tax department’s website. A sales tax ID allows you to collect sales tax from your customers.
Account with the Distributor
Submit necessary documents and complete the reseller application process to open an account with the distributor. Most legitimate wholesalers will require proof that you’re a legal business before allowing you to apply for an account.
VARStreet’s e-commerce platform is equipped with an aggregated catalog that provides product information from 40+ IT distributors. All you need is an account with these distributors to set up and launch your online business using the VARStreet platform. The aggregated IT product catalog gives product information from multiple distributors.
6. How to Contact a Dropshipping Supplier?
Email them first
Sending an email is an easy way to contact the supplier. Instead of making a call, send an email first. When you visit the suppliers’ site, you will easily find their email address and contact numbers.
Follow up with a Call
If you do not get any satisfactory response via email, pick up the phone and call. Suppliers are accustomed to having people call them and you’re likely to get someone who’s friendly and more than happy to answer your questions. If you are unsure of what to ask, write a few questions before calling. It will be a lot easier and you will not skip out any important questions.
Distributor Websites have a Sign-up for Resellers
You can find a sign-up form or an email address for resellers to contact on all distributor websites.
7. What Questions should I ask a Dropshipping Supplier?
Do they offer a product data feed?
Uploading products on your e-commerce store and maintaining it can be, not only time-consuming but also extremely demanding. Suppliers that provide inventory data feed will allow you to directly import data seamlessly into your ecommerce platform.
Product data feed automates the process of uploading products into your site. This is particularly beneficial when the supplier has thousands of products in their catalog. You need to find which systems the suppliers use and how seamless the integration between both your systems will be.
This article will give you information on why you need efficient product catalog management and the common challenges you may face.
Where is their Warehouse?
The location of the supplier’s warehouse determines delivery times. In a large country like the United States, a centrally located dropshipper is your best bet, as deliveries can reach more than 90% of the country within 2 to 3 working days.
Centrally located suppliers will save you money on shipping fees and allow you to consistently promise faster delivery times to your customers.
Do they run promotions and offers for resellers?
The IT VAR business runs on very low margins. The profitability of the business increases on the promotions run by the distributors for the resellers. For example, 1 laptop free on a sale of 10 or free shipping offers etc.
Do they Sell Directly to Consumers?
If the answer is ‘Yes’, the supplier becomes your direct competitor, making it difficult to earn a decent margin. However, in most cases, dropship suppliers sell their products to resellers at a wholesale price. It is advisable to avoid suppliers that sell directly to the public.
What are the Costs besides the Direct Cost of the Product?
Is the supplier demanding any other fees apart from dropshipping fees? For instance, some suppliers charge a restocking fee whenever a customer returns the purchased item and asks for a refund.
Other charges such as duties on imported goods, fuel surcharges and delivery fees may also apply. Keep in mind that any additional fees charged by the supplier will eat into your bottom line, making it difficult to sustain your business.
Do they Charge Dropshipping Fees?
Dropship service provided by suppliers is never free. After all, they are involved in managing inventory, packaging and shipping orders. Per-order fees will vary depending upon the size and complexity of the products.
Some suppliers may have a minimum order requirement, although none of the VARStreet distributor networks has a minimum order requirement.
What are their Payment Terms?
Every supplier has their own payment terms and conditions. A good supplier will negotiate payment terms for you. Decide and agree on payment terms before you start using any supplier. Keep the cost, retail cost and profit margins in mind when negotiating payment terms.
What are their Return and Refund Policies?
Find out how the supplier handles returns and refunds as their policies will have a direct impact on your policies. You need to know how they handle the entire return process and who pays the return shipping fees.
8. Common Problems with Dropshipping
Syncing inventory is one of the most common problems faced by entrepreneurs who have started their own dropshipping business. Keeping stock up-to-date on your e-commerce store can be difficult when you are completely dependent on your suppliers for accurate inventory data. The lack of a proper mechanism to sync inventory will lead to your online store displaying ‘out of stock’ items as available.
Completely Dependent on your Suppliers
In a dropshipping model, you, the reseller, are removed from the responsibility of packaging and shipping your products. You have absolutely no control over delivery time or product quality.
You completely rely on suppliers for order fulfilment. Therefore, it necessary that you choose the right dropship suppliers, as you will be solely held accountable for late deliveries or damaged goods.
Delay in Order Processing
Manually processing orders placed on your store, creating purchase orders with the suppliers and keeping track of them will eventually get difficult as your business scales. Automating your order management process and integrating with your suppliers will reduce errors and delays in processing orders.
9. Things to Consider when Choosing a Dropshipping Supplier
It goes without saying the dropshipping supplier you choose offers high quality products. This will build brand trust and improve customer retention.
A few other factors to look for in a dropshipping supplier:
No huge per-order fees
In most cases, dropshipping suppliers charge a small amount for the services they provide to their customers. Dropshipping services such as stocking, packaging and shipping of orders come at a cost.
Per-order fee is the fee that you must pay, whenever you place an order with the supplier. This fee is reasonable and ranges between $2 and $10. If the supplier charges a high per-order fee, it can eat into your margins, making it a cost burden.
Minimum Order Requirement
Some suppliers have a minimum order requirement for dropshipping. This means you must ensure a specified number of orders per month or quarter. A well-established business with a strong client base and a higher cash flow can easily bring in the sales.
However, if you are a new reseller, meeting that requirement can be difficult.
VARStreet’s e-commerce platform is connected to 40+ IT distributors that offer dropship services. Not a single distributor has minimum order requirements. This is extremely beneficial for fresh entrepreneurs who don’t have an established customer base.
Long shipping times can lower your conversion rate and sales. Issues with supplier reliability and delivery time will drive customers away from your business. On the other hand, timely delivery of products will keep your customers happy and your business reputation intact. So, choose a supplier who has a strong reputation for shipping orders on time.
Invested in technology
Automation is the key to boost efficiency and grow your dropshipping business. Avoid suppliers that depend on manual processes to run their business.
Suppliers that have automated their dropship services will enable you to scale your business easily. Automation will erase repetitive and error-prone processes and allow you to focus on strategies to grow your business.
Make sure the supplier you choose has a fully functional website that offers in-depth product information. Suppliers that offer inventory feeds will ensure your product listings are automatically updated, thereby eliminating the need for manual uploads.
10. Ways to Avoid Dropshipping Scam
VARStreet, a popular e-commerce platform has everything you need to start your dropshipping business. VARStreet will help you launch your e-commerce business with minimal costs. VARStreet has integrations with 40+ IT distributors that offer reliable dropship services. When a customer places an order on your VARStreet e-commerce store, a purchase order is automatically sent to the distributor who then manages the packaging and shipping of the order to the customer on your behalf.
- Import Products from Suppliers.
- Fulfil Orders Automatically.
- Real Time Inventory and Price Auto Updates.
- Pricing Automation and Rules
11. Here’s how to spot a fake supplier
Monthly or Membership Fee
There are some dropshipping suppliers who take undue advantage of their customers by demanding membership or monthly fees. Legitimate suppliers usually never ask for any fees to do business with them. Their earnings should come from the products they sell and not through fees.
However, you can inquire about the reason for their fees. If the reason is valid, you might consider using the supplier.
No address displayed
All legal suppliers will have a registered address, so if you are searching for suppliers in online directories, make sure their addresses are listed. In case the address is not shown, it is an indication of a fake supplier.
Not Listed on Better Business Bureau
The Better Business Bureau (BBB) is a nonprofit organization that aims to protect consumers from fraud. They do this by evaluating various business organizations and then giving accreditation to them.
Illegal schemes, scams and frauds are often reported to the BBB. BBB does the job of investigating questionable business practices. Access their website and check the suppliers that you want to work with. Review their business and then decide whether the supplier is a good fit for your dropshipping business.
Make a small order to test their process
Place a test order to know how your suppliers’ package and ship orders. This lets you assess the supplier, their delivery time, packaging and handling of the goods.
12. How VARStreet can help the IT VAR?
VARStreet’s e-commerce platform is integrated with 40+ leading IT distributors. The aggregated catalog is complete with rich content and updated daily through a data feed from source systems. One of the biggest advantages of the aggregated catalog is real-time price and inventory data from multiple distributors. This can help you to source right and increase your margins.
All VARStreet distributors are based in the USA and Canada. Local distributors ensure shorter delivery times. So, whenever your customers place an order on your VARStreet e-commerce store, it will be delivered in a minimum amount of time.
VARStreet automates the syncing of inventory between your suppliers’ website and your online store. A confirmed shopping cart on your store automatically creates a purchase order with the supplier. Inventory levels get automatically updated as products are sold on your store. No uploading or updating inventory levels manually!
VARStreet comes with a built-in order management system (OMS) that enables you to track orders. It is designed to automate and streamline the order processing of your business. You can easily track the sales cycle workflow from sales to delivery. VARStreet OMS will improve sales visibility and ensure efficient order processing.
Learn more about Dropshipping:
- Top 10 US Drop shipping suppliers for your IT e-commerce business.
- 10 Reasons why a Value-Added IT Reseller should have an E-commerce Store.