I got asked this on a live chat with a client the other day, and I wanted to spend some time giving you ideas how you could research out your dropshipper, and the prices they give you.

If you are brand new to dropshipping, the one thing you need to remember is that you are on the lowest part of the food chain when it comes to people the supplier is working with.  With that said, you still have some power to negotiate if done right (but that is another post, another day).  I just wanted to make it clear that when you are brand new, you really do not have a lot to bring to the table when it comes to negotiating better rates on your products.

Here are some tips (first) to finding out how competitive your rates are -

1. Is your supplier selling his own stuff on a website?  Most of the time when you are working with a legitimate dropshipper they do not sell the products they are giving their clients.  When you come across a so called supplier that is doing so, this is always a good tell-tell sign to find a new supplier.  Who do you think is going to have lower prices, you or your supplier?
   
2. Research eBay - If you can do a little searching on eBay for the products that you are selling, and you can't find any completed auctions for under the price that you have been given, then you do not have competitive rates.  Just make sure that you read the listings because there will be some that go for way lower prices, and you just need to make sure that its not refurbished, or used (which always go for cheaper).  You can always promote the fact that yours is brand new, and not refurbished or used.
3. Research out retail stores - If you need to go to the mall, or major retail shops like Target or Wal-Mart, then go for it.  This will help you get a better idea of what your products are selling for everywhere, and you can get an average and see where your price fits in.  You may be thinking to yourself that you will never be able to compete with Wal-Mart pricing, and you would be right (for the most part), but believe it or not there are lots of places that don't have Wal-Marts and people look for products online everyday that you can just go down to Wal-Mart and buy.  Some people will buy online just so they DON'T have to suffer through the crouds at Wal-Mart.  Wal-Mart has cheap prices, but they do not have the cheapest on all products that people buy online.
   

These three tips should give you a pretty good idea if the prices you have been given are competitive.  If you do the research and are not anywhere close to being competitive, then you may need to talk to the supplier about your findings, or look for a new supplier.  Once you get bigger, and have more experience behind you (doing business online) you will be able to negotiate better pricing based on ranks (SERPs), traffic and volume of sales you could bring to the table if they worked a better pricing deal with you.  I will get more into that side of working with a supplier at a later day.

If you are wanting to sell products online, The Shipper can get you access to a dropshipping list with thousands of product suppliers with goods ranging from camcorder batteries, halloween costumes and  point of purchase displays.  Join The Shipper Today!