Looking for the best wholesale drop shipping companies? We’ve got you covered! Keep reading to learn everything you need to know about finding and working with drop shipping wholesalers.
Jump to question/answer:
How do I find drop shipping companies?
Should I use drop shipping or buy products in bulk?
What’s required to work with a drop shipper?
What kind of fees do drop shippers charge?
What is the difference between a manufacturer, a wholesaler and a drop shipper?
How do I know what products to drop ship?
There are a number of ways to find drop ship suppliers:
Subscribe to a 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, and the one I recommend is World Wide Brands (aff link). Their directory offers access to a searchable database of thousands of pre-screened drop shipping companies.
Contact the Manufacturer: If you know which product you want to sell, the manufacturer should be able to point you to authorized distributors of their who may also may be willing to drop ship.
Search on Google: When searching in Google, make sure to dig deep! Wholesale dropshippers are notoriously bad at marketing (although you don’t have to be) and you’ll likely have to dig through 5 to 10 pages of irrelevant or spammy listings before you come across a legitimate drop shipper.
For additional information on how to find quality drop shipping suppliers, watch the video below:
Starting out, it’s usually best to test a market with drop shipping before committing to purchase a large amount of inventory. Then, once you understand a bit more about the market – including how much volume you can realistically expect to sell – you can explore purchasing in bulk to save money.
In the United States, legitimate drop shippers won’t work with you unless you have a legal business established and have an EIN, or an Employer Identification Number. You can think of an EIN number as a social security number for your business. Depending on if your state charges sales tax, you’ll also need a sales tax ID from your state.
In the U.S., creating a legal business structure isn’t nearly as complicate as you think, and can often be done in an hour or two on your State Dept. of Commerce website, or a site like Legal Zoom. Often, incorporating your business will cost less than $200. Once you have an official company established with your state, requesting an EIN number from the IRS is an easy process.
However, it’s very important that you spend the time to properly research which corporate structure is best for you. You will want to research this extensively, and if your’e unsure, we recommend consulting with a professional such as an attorney or accountant.
There are two potential fees you’ll likely encounter with drop shippers:
Per Order Fee: It’s common for drop shippers to charge a per-order fee to cover the expense involved with packaging and shipping an individual product. These fees are usually in the $2 to $5 range, although they can be higher for items that are extremely large or difficult to process.
Monthly Fees: Some “drop shippers” may try to charge you an ongoing monthly fee for the privilege of doing business with them. Most of the time, this is an indication of a poor quality and/or “fake” drop shipper. Very few legitimate drop shipping wholesalers will require you to pay an ongoing fee, and you should be wary if they ask you to.
Purchasing Minimums: Some legitimate drop shippers may require a minimum purchase size, either for your first order or on a monthly basis. If you don’t meet these sales threshold, they’ll charge you a fee. They do this to filter out non-serious business owners who will likely be more trouble than they are worth.
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.
So it’s possible for both a manufacturer and a wholesaler to be a drop shipper. If you find a manufacturer who is willing to ship their products directly to customers for you (rare), they will be acting as a drop shipper. Similarly, any wholesale distributor who will ship to your customers directly on your behalf is a drop shipper.
There is a LOT you need to consider when picking a niche! Researching and understanding market demand, pricing, competition, available suppliers and the value you can add are all critical to the process. It’s a topic beyond the scope of this article, so I’d recommend this free mini-course dedicated to helping you get your business up and running.
Learn how to start your own successful eCommerce business with this free mini-course or jump to one of the sections below: