As you may have noticed in your dropshipping searches, an increasing number of suppliers in China are offering wholesale and dropshipping services to American vendors.  You have to wonder, am I missing out on a great opportunity here?  Should I take advantage of the low production costs in China to secure dropshipping products at bargain-basement prices?  Well, there are a number of things to consider.

photo credit: Dennis Wong
First: Quality Assurance. A lot of great products come out of China, but a lot of garbage does, too.  Working with a dropshipper or wholesaler on the other side of the globe makes returns a lot more difficult.  You’ll want to research the quality of your products very carefully, and your supplier’s policies.  Quality control has to be in place both at the factory level, and again at the supplier’s warehouse.  This should include some kind of product guarantee, like a 1 year return policy for defective merchandise.  Further, you’ll want to check if their dropshipping services include furnishing promotional materials, images, and copy for their products.  Even in a best-case scenario, you’ll probably have to edit these materials to format them to your market, but any photos or descriptions will save you time.
Second: Hassles. Assuming you can communicate quickly and comprehensibly with your China dropshipper, there are still other difficulties to consider.  Customs is a huge one.  You might have a hundred shipments go through without issue, but you could also get nailed on every other order.  Even without customs holdups, dropshipping from China usually takes a minimum of ten days, often longer.  Payment can also be a problem.  There are scam Chinese dropshippers just like there are scam American ones, and one of the biggest red flags is request for payment through an anonymous and non-traceable source like Western Union.  Make sure any and all funds sent are through verifiable sources.  The Escrow payment service is an excellent option, as the seller in China ships the goods to the customer first, only receiving the balance from the service after the goods arrive.

photo credit: eseering
photo credit: eseering

Third: Other Considerations. Depending on the venue from which you are dropshipping, you may or may not want your customers to know that you’re using a supplier in China.  You may want to consider whether the products will be sent in plain, non-identifiable packaging.  If your venue is eBay, make sure that your supplier is not already selling their products that way.  This is called “direct from the source competition”, and it will burn your business big time.  Selling on eBay is one of the main way suppliers in China dropship, and with the ease of price comparison, there’s no way you’ll be able to sell the same things at a mark-up.
There are plenty of people making money working with dropshippers from China, because the prices really can’t be beat.  But there are a lot of issues attendant with using an international supplier, and you should weigh your options carefully before taking that route.  Ultimately, using a local supplier is simpler, so make sure your profit margin justifies the hassle of moving further afield.

dropshipping, finding suppliers, wholesale