So you want to sell something online, but you don’t have the storage space for your inventory or the time to ship each sold item. Enter drop shipping suppliers.
By drop shipping, you sell items online without ever having to touch the physical product. And, you earn a commission from each sale by connecting the buyer with a supplier.
In This Article
- What is Drop Shipping?
- How to Profit from Drop Shipping
- Best Drop Shipping Suppliers in 2020
- Avoiding Fake Drop Shipping Suppliers
- The Most Popular Products to Drop Ship
What is Drop Shipping?
Drop shipping is the digital version of being able to “buy low and sell high” with minimal effort. You partner with dropship suppliers that sell you an item at wholesale prices and you sell them to the buyer for the retail price.
As a basic example, let’s say you want to sell noise-canceling headphones, the supplier cost is $15 and you sell them online for $20. With each sale, you make $5 profit.
How drop shipping works:
- Partner with an online supplier
- Post your product listings on various e-commerce platforms
- The buyer makes a purchase and the supplier ships the item directly to the buyer
You never have to touch the physical product you’re selling. When you make a sale, the product supplier will automatically ship the item from their warehouse to the customer.
Here’s a personal example of how I bought an item from a drop shipper. I purchased a drinking water filter on eBay from a seller based in New York. The filters were actually shipped directly from the manufacturer based in Michigan to my house. Since I don’t live in the New England area, the package never crossed the New York state line.
Advantages of Drop Shipping
There are several reasons you should consider drop shipping compared to wholesaling or flipping used items.
The Supplier Warehouses and Ships the Item
Drop shipping is an exciting online side hustle because you sell items without handling the physical product. This income stream can be less time consuming than searching yard sales and thrift stores for items hidden treasures.
Instead of spending time trying to build your inventory, you can spend building your drop shipping website and listing your products online to make your first sale sooner.
Minimal Upfront Costs
Although some drop shipping suppliers require an upfront financial commitment (think security deposit), drop shipping can still be cheaper than ordering in bulk and having to mail the items yourself.
You will spend more time than money, building an online store and listing your products on the various online marketplaces to make a sale.
Make Money Immediately
Finally, drop shipping can have a more immediate payout compared to other online income strategies like affiliate marketing or posting ads which can take several months to a year to earn a steady income.
Even if you’re online drop shipping store isn’t attracting much traffic yet, you can still make a sale on Amazon, eBay, or Bonanza which are established marketplaces. If you’ve sold used items on eBay or Amazon, you know how quickly an item can sell after you list it.
You might decide to pursue this side hustle to diversify your online income, but drop shipping is a better option when you need money now.
How to Profit from Drop Shipping
Drop shipping can be profitable, but there are a few secrets of the trade you need to know about to be a successful seller.
How to get the most out of drop shipping:
- Factor marketplace fees and shipping costs into your selling costs
- Ship ePacket or a domestic shipping service like USPS or FedEx for the quickest shipping times
- Use an app to instantly notify the shipper when a sale is made (instead of email or snail mail)
- Don’t sell name brand items (they’re most likely knockoffs)
- Don’t always sell the cheapest items (they might be poorly made and have a high refund rate)
Because you’re “the seller,” you will need to be the customer service agent when a buyer has a question or complaint.
Potential reasons to issue the buyer a refund:
- Item arrived broken
- Wrong item sent
- Buyer never received the item
These events minimize your profit so it’s very important to pick the right supplier.
Best Drop Shipping Suppliers in 2020
Becoming a successful drop shipper requires some initial effort. You will need to directly contact different manufacturers to discuss the partnership details.
The two different avenues for selling your items:
- Create your own online storefront
- Advertise your listing on e-commerce sites like Wish
The more places you list, the more audiences you reach. For example, think about your own group of friends and how many people exclusively shop on either Amazon or eBay. Drop shipping suppliers usually let you sell their products on multiple online marketplaces but some platforms make the listing and ordering process seamless.
Spocket might be your best bet if you want a supplier from the United States or Europe. Over 60% of Spocket’s suppliers are based in the US and EU. You may also appreciate that Spocket has a 24/7 customer service team.
Being able to partner with suppliers in developed countries helps you avoid these issues:
- Slow shipping
- Inconsistent suppliers or packaging
- Off-brand packaging
- Slow response rate
Partnering with suppliers in the Western Hemisphere reduces shipping times. You can also test products before you begin selling to your customers. After all, you may have to refund any defective product from your profit if you pick a bad partner.
So far, over 30,000 drop shippers have used Spocket to sell using Shopify and WooCommerce. Upgrading to the Spocket Pro plan lets the supplier ship your items with personalized packaging.
Alibaba might be the largest online marketplace for finding drop shipping suppliers. Of course, buyers can also directly buy from Alibaba too.
Because drop shipping requires you to sell products, they are most likely going to be made overseas where production costs are significantly lower. That doesn’t mean you can’t find U.S.-based suppliers when you don’t want to wait for a sold item to cross the ocean before it can be delivered to the buyer.
Alibaba lets you look for suppliers by region or top selected suppliers to quickly find a supplier that fits your criteria. To make sure you offer the quickest shipping times for overseas suppliers, only choose suppliers that offer “ePacket delivery” for delivery times of 30 days or less. Most international suppliers now offer this shipping option to remain a competitive buyer.
If you aren’t a business, you can buy products from AliExpress, a company owned by the same owers of Alibaba, but where customers can buy too.
Don’t forget that you can use the Shopify Google Chrome extension to quickly connect with suppliers too.
One way to find drop shipping suppliers is to look for products on various online marketplaces and directly contact the manufacturer. The only problem is that this strategy takes time and you might be talking to a scam supplier.
With SaleHoo, you have instant access to a directly consisting of 8,000+ pre-vetted drop shipping suppliers. You can directly contact legitimate suppliers to forge a partnership.
A more valuable reason to use SaleHoo is their Market Research Labs. A key ingredient to making a steady income from drop shipping is picking in-demand products.
Shopping trends constantly change and using SaleHoo’s research helps you stay a step in front of the competition. For example, you’re probably not going to make as many sales by selling cassette tapes instead of a portable Bluetooth speaker. Although you can drop ship both of these items today, you still need to stay current with the times and preferable one step ahead.
Finally, SaleHoo also offers a community forum so you can gain advice and swap experiences with others. Newbies can also use SaleHoo’s educational course to learn more about dropshipping too.
SaleHoo is an extensive directory but you still need to use an ecommerce business platform like Shopify or BigCommerce to effortlessly list your products online and notify the supplier when a sale is made.
Shopify is probably the darling of drop shipping sellers because they are in “all-in-one” drop shipping platform. You can use Shopify for the following activities:
- Partner with drop shipping suppliers
- Create an online store
- List your items on e-commerce marketplaces like Amazon and eBay
You can enroll in weekly drop shipping educational webinars and you can quickly add products to your store to begin selling immediately with Shopify’s Oberlo app. Oberlo lets you list up to 500 products and make 50 sales for free each month.
Another advantage of using Shopify is that you can easily track each shipment in your storefront instead of relying on the supplier to email you the shipping details that you must manually enter into the shipping service website to track. Plus, you can sell your own physical or digital items if you have some to sell too.
So far, Shopify has helped drop shipping entrepreneurs like yourself complete more than 85 million sales!
You can also use BigCommerce to create your own website and list your drop shipping items on other online marketplaces too. It’s possible to directly connect with several drop shipping suppliers for free through BigCommerce. In other instances, you will need to do your own research to find suppliers and then list your products on your BigCommerce store.
Once you’re ready to sell, BigCommerce can automatically list your products on the following online platforms:
You will enjoy 24/7 live agent support, shipping label discounts, and even the opportunity to have shoppers leave product reviews to entice future shoppers to make a purchase.
You can use Doba for their supplier directory and inventory management systems. It’s possible to directly export product listings to your store and the other online marketplaces you sell on. Doba has four different plan options, but all levels have complimentary access to the following amenities:
- Curated product category lists
- Weekly deals email
- Email support
- Supplier report cards
If you want to export your product listing to Amazon and eBay, you will need to upgrade to an Advanced or Pro plan. Additional benefits of being an Advanced or Pro plan includes live chat support and the Elite Seller Report.
This monthly report shows you the top 30 products in each category. You can also access previous monthly reports to spot trends and see which products are a long-term success.
7. Worldwide Brands
Unlike some of the other drop shipping directories that charge a monthly or annual fee, Worldwide Brands only requires a single payment for lifetime access. You can access their directory consisting of more than 16 million products from over 8,000 suppliers.
Worldwide Brands also has an A+ rating from the Better Business Bureau! When you’re dealing with dropshipping companies on the opposite side of the world that you may never visit in person, building a partnership through a reputable company speaks volumes.
You can filter vendors by the following traits:
- Drop Shippers
- Light Bulk Wholesale Suppliers
- Large Volume Wholesalers
- Instant Import Buys
- Liquidation Deals
If you have more upfront capital, you might decide to try your hand at wholesaling too. Just keep in mind that you may have to rent warehouse space with the supplier so only pick products with larger profit margin or high popularity rating.
Wholesale2B offers more than one million drop ship products you can sell online. You can integrate your Wholesale2B partnerships with your store (i.e., Shopify or BigCommerce) and also directly list your items on other e-commerce platforms too.
You have many different direct export options with Wholesale2B, but you must purchase an individual subscription with each platform you want to use. For example, you need to pay $29.99 monthly for Amazon and another $29.99 for Shopify.
Although these automated plans are convenient, it can get expensive if you’re not a high volume seller yet. You can also use their DIY Plan which only costs $67 a year.
Tip: You can also use Wholesale2B to directly drop ship on Bonanza too.
9. Sunrise Wholesale
Sunrise Wholesale also offers a Rolodex of drop shipping suppliers to create your own store and also sell on Amazon or eBay. The listings can also integrate with your Shopify and BigCommerce stores too.
They are also more affordable than some of the other recommendations mentioned on this list. Your best option is choosing an annual subscription for $99 to get full access to the Sunrise Wholesale platform.
With the Amazon and eBay tools, you can quickly analyze prices to make sure you competitively price your products. Your pricing power is very important as you can either lose money if you sell each item for a loss just to move your inventory.
You will also receive low inventory alerts and have access to phone, email, and live chat support too.
10. Inventory Source
Inventory Source integrates with more than 28 different online marketplaces. You can partner with more than 150 different suppliers for multiple product categories.
You also have access to several automation tools that let you quickly set the price, determine shipping prices, and you can also filter by product type when you need to view your store inventory.
When a sale is made, Inventory Source immediately notifies the supplier so you don’t need to send an email or verify the purchase. And, they also handle the shipping information for you too. So, if you go on vacation, your drop shipping business can keep humming when you don’t have reliable internet access.
Megagoods specializes in selling consumer electronics and video game items. Thankfully, these two categories are very broad so you shouldn’t have an issue finding items that the average online shopper is looking for. For example, you can drop ship the obvious like flatscreen tvs and phone chargers to other common household items like dinnerware.
Many items also offer free shipping, so you don’t have to factor this cost into your final sales value. Although Megagoods, is a great site for drop shipping beginners, you might want to stop by to partner with common brands that offer good product quality.
12. National Dropshippers
National Dropshippers offers products that are 33% to 66% below the MSRP! If you can sell your products for the suggested retail price, you can make a minimum 33% profit on each item sold! You can use the product images and links from your partnerships on your own site or online marketplaces. As their name suggests, National Dropshippers is a USA company.
You can browse the available products by clicking the different product categories.
Some of the categories include:
- Pet Supplies
Not everything you drop ship has to cost $10 or less. These items can help you earn more money per sale because of their higher retail value.
13. See What the Competition is Selling
Some drop shipping supplier directories publish a bestseller list. This is one way to see which items other competitors believe are the best items to sell, but you can also search other online marketplaces to get ideas too.
Reason to visit other drop shipping storefronts:
- Find the most common suppliers
- Compare prices
- See if you can sell a product they aren’t selling yet
Drop shipping is a competitive business and you need to know how your store stacks up against the competition. Making yourself different helps you gain a competitive edge over the other online drop shippers. You might all be selling the same product and the difference of a few cents in the sales price or a faster shipping option can mean all the difference in the world.
Avoiding Fake Drop Shipping Suppliers
Most online vendors are honest, but there’s always a bad apple in every group. You need to follow these tips to make sure you don’t partner with a fake drop shipping supplier that takes your money and runs.
Never Pay a Monthly or Annual Fee
Most legitimate suppliers require a small initial financial commitment. It might be $500 or $1,000, but this initial deposit serves as a credit for your initial sales. For example, if you need to commit $500, you don’t have to give them additional money for the first $500 of inventory sold.
Fake suppliers may charge you a monthly fee. This isn’t the industry norm and you should avoid these partnerships to protect your own seller reputation.
It’s important to note that these fees are different than seller directory fees that websites like SaleHoo charge. Directories only connect you with suppliers and do not ship, warehouse, or manufacture the items you will be selling online.
Only Choose Supplier With Exceptional Feedback
Most directories and drop shipping platforms have a feedback rating for each supplier. To spare yourself a headache, only choose suppliers with a feedback score of at least 90%. Some drop shippers will even recommend a minimum rating of 95% depending on the platform.
You should also take the time to read the comments and to research the supplier information on a search engine before you strike a partnership. By using one of the recommendations above, the odds of finding a fake supplier are greatly reduced, but you should always maintain a wary eye.
Only Use “ePacket” or Well-Known Shipping Services
International shipping has greatly improved in recent years. Several countries now participate in a shipping program called “ePacket” that can take between five and thirty business days to deliver a product from a foreign warehouse to a U.S. buyer. Besides a quicker shipping time, you need to be able to track the package. Not knowing where the package is located means you will need to issue a refund and it may even disqualify you from seller protection benefits too.
Test Purchase a Product First
If you still think a supplier’s reputation is questionable. You can start a partnership and make a test purchase. If the product arrives on-time and meets your expectations, they are most likely a legitimate supplier. If you’re a first-time drop shipper, this test purchase also lets you walk through the ordering process from a buyer’s perspective so you can make any modifications to your selling program too.
The Most Popular Products to Drop Ship
There are a few ways to determine the most popular drop shipping items. The easiest way is to view the most popular item lists that are published by your drop shipping store platform or directory.
You can also have success by conducting your own research. Besides visiting other drop shipper stores to see what they’re selling, you can also visit Google Trends to get ideas.
Or, you can always try these “evergreen” product ideas too:
- Phone cases
- Phone repair kits
- Portable chargers
- Teeth Whitening
You’re most profitable items will be the ones that are lightweight and affordable to ship. After all, shipping costs can be as much as the supplier price. But you always have to remember that you can’t look at price alone. Consumer demand can be just as important, especially if a supplier requires a small deposit so you have some “skin in the game” to sell your inventory.
Drop shipping is a relatively new retail concept, but it can be very profitable if you don’t want to deal with warehousing your inventory or manually shipping each item. You also don’t need to spend a large sum of money to open your online store or partner with drop shipping suppliers. Although drop shipping requires work, it can produce a steady income as you secure multiple products and sell on several online marketplaces.
How successful have been with drop shipping so far? Where do you make the most sales? How else do you find excellent suppliers?