The Dos and Don’ts of Contacting Dropshipping Suppliers
Contacting dropshipping suppliers is one of the biggest hurdles in building a successful dropshipping business. And for a few good reasons too.
First, picking up the phone and calling potential business partners for the first time is intimidating!
Second, all the marketing and business jargon is a bit tricky, especially for those who are totally new to business.
And finally, there's just so many 'what if's'!
So to help handle a lot of the confusion about contacting dropshipping suppliers, I've gathered up seven questions from the community and I'm answering them in this blog post.
This blog post is also available in video form. Click ‘Play’ below to start watching! Make sure to subscribe to our YouTube Channel for weekly updates and insights!
This list of questions came from a poll we sent out on our Instagram page. (And if you're not following us there, now would be a good time to fix that!)
Along with the answers, I'll also tell you all the dos and don'ts I've learned from contacting dropship suppliers for the better part of a decade.
Question #1: How does one get a listing of reliable suppliers? Where should I look?
Don’t pay to work with a middleman. Do work on building relationships with suppliers.
Do not go on Google and search “dropship suppliers”. What you're going to find doing that is basically a bunch of middlemen that make money by charging you a monthly fee or a quarterly fee or a yearly fee.
Once you pay these websites or directories, they give you access to products to sell.
Now, when you do that, you have no direct relationship with the suppliers you want to work with. Yes, it's easy to get approved, but you're not really getting approved for anything. You're just paying someone so that's what you do not want to do.
Having direct relationships with the suppliers and brands you're working with will pay off in the long run. With a real relationship with the supplier, your margins are locked in through price controls.
Now if you want to see how to do everything from finding them to contacting them to getting approved with them, definitely check out my webinar. If you're not part of Drop Ship Lifestyle yet just head over here, and I'll show you exactly how to do that.
Takeaway: Never work with middlemen, go direct to the source that is where the relationships are. That is where the money is and in my opinion, that's the only way to drop ship profitably, in the long term.
Question #2: How should I ask suppliers to ship for me?
Don’t use the term ‘dropship’, do consider yourself an ‘internet retailer’.
When you reach out to dropshipping suppliers, you want to tell them that you're an internet retailer and you're looking to get approved to sell their products.
Now when you're talking about the logistics and everything, I really don't recommend bringing up the fact that you are not going to be stocking inventory. That's basically already implied, when you tell them you're an internet retailer.
If you want some of the scripts we use when contacting dropshipping suppliers, definitely join me for our free webinar where I share that information!
In most cases, the dropshipping suppliers will send you over an application to fill out. After that, they will send over price lists, product photos, product descriptions, etc.. At this point, they will tell you what carriers they ship with, and that's when you let them know you want to ship on their accounts.
What that means is when the suppliers ship an order for you, they are just going to add shipping onto your invoice.
That's what we want, because they probably move so much volume that first of all their price is going to be better, than what we would pay a UPS or a FedEx.
And not only that, but if anything goes wrong with an order, they will have the insurance claim on their end. That way they'll take care of it all and, we want to ship on their account if ever possible. Again, that's typically how it works.
If that's not how it works with one of your suppliers, well things are a little different. The supplier is actually going to tell you they will want to work with you but they will need your FedEx account number or your UPS account number, or whichever company they prefer to ship with.
If that's the case, then you can just go to the FedEx or UPS website, make an account, and give them your account number.
What happens then is when they ship, it just basically sends you an invoice, you pay UPS or FedEx or DHL or whoever directly.
Takeaway: The time and the place to ask is after you're approved and once you have the price list. Then try to work with them and ask who they ship with. All you have to do is tell them you prefer to ship on their account and to have them bill you for it.
Question #3: One of my potential suppliers doesn’t offer prepay terms. They only offer credit or money transfers. What should I do?
Don’t run balances with different suppliers, do send wire transfers.
In this question, what they are asking is if the dropship supplier doesn't accept prepay, they'll instead ship stuff for free, but they'll ship it on credit and then every 30 days or so, you would have to pay one invoice.
So what are Prepay Terms? Once an order is placed on your website, you’ll pay your dropship supplier and they’ll ship it to the customer. This doesn’t mean you’ll have inventory or pay cash in advance, you’re simply paying before they ship it.
The other option is a wire transferr? The problem with that is you're not going to earn credit card miles, which is not good from a benefit perspective on your end.
What I would do if I had those two options, is I would just pay with wire transfers, rather than taking credit and making payments every 30 days or so.
That's more of a personal thing for me. I don't like to have big debts with anyone.
The biggest debt we have in our business, is our credit card bill every month, we pay it off. I would not want to have all these running balances with different suppliers.
Again, that's just a personal thing. It makes it easier for me to know exactly what my payables are and what my liabilities are.
Maybe you could do that if you have credit, if you wanna go through a credit check, if you want to apply for credit.
Remember if you want do that then just be prepared for a credit check. If not, wire transfers are super simple.
Takeaway: If you're comfortable with taking credit out different suppliers and have different balances all over the place, go that route. If not, wire transfer are more than fine.
Question #4: In Australia, suppliers hate online only stores. How can I convince them it’s worth their time?
Don’t support that idea, do explain what your store brings to the table.
Disclaimer here, obviously I've never drop shipped in Australia. I have never built a store there but we do have a ton of students there that have a lot of success, okay?
What those students have told me, this is covered in, our doing Business Abroad Course which is part of my Drop Ship Blueprint is that you do kind of have to sell this to the suppliers there because it's not as popular as it is in the States.
Basically if a dropshipping supplier says to you, "You're online only, this isn't worth it, we only want to work with retail stores," what you wouldn't to do is tell them, "You're right I understand.
Why? Because you don't want to empower them and support their idea that online retail isn't worth it.
Instead, explain to them that's really not true because of all the benefits there are in working with online retailers.
Then just go through all the things that you can bring to them and all the things that you can help them with. Just flip it on them!
Takeaway: Don't agree with them. Instead, be respectful and explain to them why that is the old way of thinking. Do this by showing them what you can bring to the table and how it will increase their revenue!
Question #5: Can you help me find dropshipping suppliers in India?
Don’t look for dropship suppliers in pre-established markets, do look for suppliers in well-established markets.
Okay, next question is about sourcing suppliers in India. We do have successful members from India but they're not doing business in India.
My advice though, is not to try and build a dropship store serving the market in India. I'm not saying it will never be possible to dropship to Indians using Indian suppliers, it's just not established there, yet.
I'm saying this from my experience and having worked with over 10,000 students from over 35 countries. And in markets that aren't established yet, it's just a totally different game.
HOW TO START
YOUR OWN BUSINESS
WITHOUT PRIOR KNOWLEDGE OR EXPERIENCE
And again, that's not to say it's not possible. But right now, and for immediate future, it's not kind of something like where you can click a few buttons, turn on a switch to ads and start getting sales and having it more streamlined.
So if you want to use a streamlined system, like the one I teach for dropshipping, my advice is do not look for suppliers in India. Instead find another market.
For example, our students from Australia, what they do is build a store in another market that's already established the US, UK, or Germany. There's tons of other markets where there's opportunity and you can do business there, okay?
Takeaway: If you want a streamlined system to start a dropshipping business, choose to source suppliers from a well-established market like the UK or United States.
Question #6: I’m located in the US and one of my potential suppliers is in Canada. Thoughts on working with them?
Don’t apply as normal without asking questions. Do ask questions so you aren’t setting up this relationship blindly.
So if you're located in the States and have a a potential supplier in Canada you can still work them. But my advice, is not apply with asking questions.
When you contact them , you'll want to start the conversation a little differently than if you were contacting a domestic dropshipping supplier. Early in the conversation, get straight to the point and ask something along the lines such as:
"We see that you are headquartered in Canada and I'm just curious, do you work with brands, in the United States? And if so, how does that relationship work? Do you have a warehouse in the US? Who handles shipping?"
Takeaway: Ask questions up front in this scenario, so you're not going into it blind and then realizing you have to figure out extra things after you've been approved.
Question #7: Do I need a resale certificate to start contacting suppliers?
Don’t wait, do sign up for an EIN (Employer Identification Number) free from the IRS website.
With the sales tax certificates, not every supplier you work with will require one. Some of them will, some of them won't. What they will require at a minimum is an EIN (Employer Identification number), which is also known as a tax ID.
If you're doing business in the United States, an EIN is free to get online on the IRS website. Just so everybody knows, this is if you're doing business in the States. So that's free to get online, I'll post a link below this video.
The sales tax certificate, if you're doing business in a state that requires sales tax, then yes, you should apply for one but again.
If you already did apply and are only waiting on the certificate, I would still start reaching out to suppliers. You have that in progress and if you have an EIN number, then you should be good to go to get the ball rolling to start the approval process and to start sending traffic and getting sales.
Takeaway: Apply for the free EIN number on the IRS website and learn more about sales tax in this recent podcast I shared on the subject.
Hope you found this useful. If you did, please let me know in the comments!