Starting a very own dropshipping venture may actually be seen as quite a challenging task. This is the reason why entrepreneurs who have a limited experience of running such a business start their activities by searching for middlemen, especially for dropshipping suppliers.
The most typical aspect where a middleman’s help is required is assortment strategy. Even if newcomers in this business know what exactly they are going to sell, they will most likely have some difficulties with their search for the companies who can dropship directly to the customers.
Therefore, beginners tend to ask for a professional advice from dropshipping services providers. These middlemen own a database of trusted dropshipping suppliers and provide an access to it with monthly fees. The terms can vary significantly, but the algorithm is usually the same:
- A dropshipper makes a payment to the dropshipping services provider;
- A dropshipper gets an access to the providers’ database;
- A dropshipper chooses the desired items from any of the suppliers available and adds these products to the webstore.
These items can be imported to a dropshipper’s website along with their full description and images. Therefore, when customers visit this store and place an order, they actually make their purchase from the wholesale supplier.
Suppliers, in turn, basically provide the full range of services traditionally associated with dropshipping business: they store items, arrange shipments, provide sellers with tracking codes and, if required, customize the delivered packages by designing them in style of the dropshipping store they work with.
In other words, dropshipping services providers make it really easy for a webstore owner to establish the necessary business contacts with wholesalers.
It doesn’t mean, though, that these providers have no downsides: some of the features they possess make them quite uncomfortable for dropshippers, who, in turn, begin paying attention to sensible alternatives.
Another useful source of information about wholesalers is a trade directory. Usually, a directory is a catalog of distributors, their addresses, branches, products, and sometimes financial position or sales value. They also contain lists of names of goods on the market and their manufacturers as well as lists of materials and components with the names and addresses of the supplier. The information in the directories is structured so that you can search by product type/name or by its distributor/manufacturer.
So, dropshipping directory is a database of wholesale suppliers grouped by category, market or niche. Many directories organize special verification to ensure the suppliers are legitimate and genuine wholesalers.
Most directories charge a fee for access to their database. These fees can be either single or monthly/yearly payments and vary from $60 to $300.
Some of the most popular directories are Worldwide Brands, SaleHoo, Doba, Wholesale Central, Drop Ship Access. They have hundreds and even thousands of suppliers and millions of products.
There are also smaller directories – A Better Lemonade Stand, Free Drop Shipping List, The Watchman Advisors, Top Ten Wholesale. But their databases may be not so actual. Besides, in some minor directories, you need just to fill up a form to call yourself a verified wholesale supplier. Seems like it carries little credibility.
- Reputable directories guarantee legitimate and quality wholesalers.
- They are good to seek ideas for products to sell or niches to choose from.
- The information is well structured, so it is a convenient way to look up a large number of suppliers in one place in a short time.
- Many suppliers mentioned in the directories are retailers selling to the public at “wholesale” prices, but in practice, their pricing is far from real wholesale.
- Paid membership. It makes no sense to consult the directory many times if you have already launched your store and found suppliers.
- Not every supplier is ready to start working with a small online store, especially with a newcomer who does not plan a large number of orders at the start.
So, is it really necessary to consult a dropship directory to find a supplier? We guess not. If you have already chosen the niche and know what products you are going to sell, you can find suppliers in your market putting a bit effort.
One of the most reasonable alternatives is AliExpress – a platform of global reach that contains selling offers from millions of dropshipping distributors worldwide.
Why AliExpress dropshipping suppliers stand out of the competition?
- Product range. Generally, it is typical for companies that offer drop shipping to mostly concentrating on a narrow product segment or, in the best case scenario, on a limited amount of related categories – for example, children clothing, toys, and stationery; or consumer electronics, gadgets, and gadget accessories, etc. It is uncommon for wholesale suppliers to offer more than several million items, which is understandable – managing such an extended stock is quite complicated and resource-consuming. This is not the case for AliExpress – the website is just a platform, designed with the sole purpose of facilitating the interaction between sellers and buyers. Any manufacturer can post their offers on the platform, and this is the reason why the number of products currently presented on AliExpress is estimated to be over 100 million. These products fall into various categories, which makes it possible for dropshippers to choose any items they fancy and adjust their webstores to a specific target audience’s interests.
- Free access to the database. It is not uncommon for dropshipping services providers to limit the access to their databases. As the result, dropshippers can’t browse the list of manufacturers and their products before making the necessary entry payment. It surely causes a significant inconvenience for dropshippers since they can’t estimate whether buying an access to this supplier’s catalogue will be a waste of money or a worthy purchase. At the same time, AliExpress doesn’t have any limitations of this kind. The registration on the platform is free, and it’s not even necessary to be registered in order to view all the products available. What is also important, the platform provides some data that is exceptionally valuable for dropshippers since it gives the ground to evaluate the seller’s performance and reliability, and lets businessmen source only the best dropshipping providers. These indicators include the length of this business operation, the percentage of positive feedback left by buyers, the number of orders placed by visitors, etc.
- No fees. It is standard for dropshipping services providers to charge monthly and/or yearly membership fees that vary depending on each separate seller. They can also ask for a restocking fee – a compensation of stocking and delivery expenses occurring in case a customer returns a previously bought item that has no actual defects. None of this is the case for dropshippers who work with suppliers directly through AliExpress. To start working with the sellers who post their offers on the platform, dropshippers don’t have to pay any entry fees, and they certainly don’t have to make any additional payments during the whole process of business collaboration. All the expenses associated with refunds and returns are solely borne by the seller.
- No limits on markup. Unfortunately, dropshipping services providers put the purchaser’s possibilities of making a considerable profit at risk. It happens because this type of business interaction implies some limits on markup. When dropshippers start working with a seller, they are advised to set a so-called recommended retail price on the seller’s items. The initial price can only be increased on a given value which normally constitutes not more than 15-20% of the starting cost. In case this requirement isn’t met, the partnership agreement can possibly come to an end. The sellers who are contacted directly through AliExpress don’t insist on a specific price. Given that the items on AliExpress are known to be very low-priced in comparison to identical products sold elsewhere, the possible markups, and, therefore, the profits, can be quite impressive. Several-fold price increase, in this case, will not affect end buyers negatively and will result in adequate financial gains for a dropshipper.
- No limits on sales volume. Again, it’s quite a popular practice in this type of business to make a dropshipper reach a certain amount of orders. In case this sales threshold is not met, drop shipping suppliers can refuse to continue collaboration with this dropshipper. It never happens if you’re contacting a seller via AliExpress. It’s not even necessary to formally address sellers and let them know you are ordering their products for dropshipping purposes.
- No legal requirements. It’s not a rare thing for dropshipping services providers to only work with officially established entities. Some of them even prefer only USA-registered businesses. None of this is required to contact a manufacturer on AliExpress – the platform is exceptionally popular among private individuals who make purchases for their own use and not for reselling, which is why local dropshipping wholesalers gladly work with everyone regardless of legal status.
- Customer service. Customer service is a crucial aspect of every business. This is something that gives your webstore an additional value, and builds trusting and loyal community of clients. Sometimes it is not that easy to reach a seller via email or a message in a contact form, and it is inconvenient for dropshippers and surely unwelcomed by purchasers. Placing an order on AliExpress, you can get in touch with the drop shipping supplier any time you fancy. Even if suppliers you are trying to contact are not online at this very moment, they will get a relevant notification on their email. Additionally, in case of any technical issues take place, it is also possible to ask dedicated AliExpress support team for a professional advice.
- Global reach. The ultimate benefit of starting a dropshipping business is the possibility to reach an unlimited number of customers who weren’t able to get these products in their own countries. As the support team mentions, the majority of clients who order various goods from the company’s own dropshipping webstores are representatives of Arab and Asian countries. Therefore, it is crucial to make these items available for people across the globe. While general manufacturers mostly offer shipping within Europe or the US, AliExpress makes it possible to arrange a delivery literally to any corner of the world without narrowing your target audience to a specific geographic segment.
Dropshippers on AliExpress vs dropshipping services providers: general overview
As we can see from all the points mentioned above, the choice of dropshipping suppliers should depend on the following considerations:
- If you are building a massive-scale enterprise and prefer to make business reputation one of the core benefits of your venture, you should probably go for the help of dropshipping services providers. The point is, sometimes they can even provide an access drop shipping companies who are legally allowed to distribute costly branded products. It means that you will be able to create your own brand and make yourself a prominent business figure in case you have the necessary resources. You should remember, however, that due to the already given reasons you won’t be able to secure a solid profit, and the competition in this segment will be fierce.
- If you are fine with running a relatively small business and would like to start your venture immediately and with low entry costs, you should go to AliExpress and contact the best dropshipping suppliers by yourself, with no help of middlemen. This is probably the best strategy for newcomers who don’t have the idea of the preferred product range yet. Ordering items for your clients from AliExpress, you will be able to test a huge number of various niches and finally make up your mind on the most promising ones. The best part is that you won’t have to bear any excessive costs and will be free to choose the suitable suppliers for as long as you want!
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