Finding a great supplier is one of the most important steps in setting up your online business.  Whether you’re looking for a dropship or wholesale supplier, I would advocate using Wholesale Match, since we have thousands upon thousands of quality dropshippers and wholesalers in our database, and we add new ones every day.  The Research Team will actually go out and find new suppliers for you if you haven’t found what you’re looking for in the database.  But even after we find you some solid potential suppliers, you’re going to have to do the work to get set up with them, including contacting the suppliers, setting up an account, and negotiating your terms.  The following are some common pitfalls would-be online business owners often encounter while getting set up with suppliers:

First: Explain clearly what you’re looking for when you call a potential supplier. I can’t tell you how often people call the customer support line and say, “You sent me a supplier for ping pong paddles, but I called them and they don’t dropship.”  Then the customer service team calls the supplier back to see if their policy has changed, and in fact they do dropship.  What goes wrong?  Often when somebody calls a potential supplier, they don’t really explain what they’re looking for.  Some companies dropship every day, but aren’t familiar with the term “dropshipping”.  Some will tell you that they only wholesale, but they have no minimum and can ship to any address, so they are in effect actually a dropshipper.  Communicate with your potential supplier, and take the time to learn about their company.  Don’t just ask one or two questions and then hang up the phone.

photo credit: alicepopkorn

Second: Be prepared to use more than one supplier. For convenience sake, many people want a supplier who can provide them with all their products in one place.  So if you were selling, say, meditation stones, yoga mats, and seaweed facial masks, you might expect your supplier to stock all those items.  However, they might carry only yoga supplies, or only spa items like seaweed masks.  You might have to use two or three or even six or ten suppliers to get the range of fantastic products you’re looking for on your website.  Sometimes you’ll get lucky and find a supplier who carries everything you want at a great price, but usually you’ll find a better deal shopping around, using a few different suppliers.

Third: Have your business plan ready long before you start supplier-shopping. Do your product research, plan exactly how you’re going to market your website, and have your budget laid out.  That way, when you finally call a supplier, you’ll sound like a professional and they’ll be excited to work with you.  Imagine for a moment that you were a distributor of soccer cleats, and some random guy called you and said, “Hey, I’m thinking about maybe selling soccer stuff online, but I dunno, I might do golf.  But probably soccer, at least for now.  Wanna supply me with cleats?”.  Not likely.  While most suppliers are happy to start a partnership with a new retailer, they want to work with solid entrepreneurs who have their stuff together.  They may ask you questions about your projected sales volumes, credit score, website, etc., and you need to be able to answer intelligently.

Fourth: Get your Reseller’s Permit and Tax ID Number. A lot of people try to get around obtainng their Reseller’s Permit and Tax ID Number by using suppliers who don’t require them, but the best suppliers want proper documentation, and anyway, it’s the law.  Spend the time and the little bit of money it will cost you: it’ll save you a mountain of problems later on.  A Reseller’s Permit is required to purchase products tax-free for resale purposes, and a Tax ID Number is necessary to submit your taxes at the end of the year.  If you want your online business to be successful, treat it like a real business and set it up properly, without taking short cuts.

Fifth: Be prepared to pay initial order costs. If you want to start an online business, you need capital.  Some e-business newbies believe they will be able to get their website up and running and start selling products for $100 or less.  The truth is, there are going to be additional costs.  One of these costs might be initial orders from suppliers.  While many dropshippers have no fees to sign up and will allow you to ship individual orders, others require you to make a large initial order or put down a deposit before they’ll work with you.  This is rare, but more common with certain categories of products like clothing.  After your first $100-500 order, suppliers are usually willing to do single orders, or a much smaller volume.  You could choose not to work with suppliers who require a deposit or larger initial order, but unfortunately you would be cutting out some of the best dropshippers and wholesalers.

dropshippers, finding suppliers, wholesale