I am not normally a negative person, but I feel it's important to give some warnings about drop-shipping as a business plan. It can be great and I don't want you to go away from this section totally discouraged, but on the other hand everyone needs to face up to reality in the cold light of day.
Too often when I am reading "guaranteed success" type websites I read sales copy from people who are trying to sell you drop-shipping directories or related services, and they don't like to show you the other side of the coin!
I'm afraid I am more mean and not afraid to shatter illusions!
Here are the basic downsides of drop-shipping you need to consider:
Can you keep everything under control?
Very quickly, if you are successful at drop-ship selling, you could find yourself overwhelmed with all the problems of running a business that you thought you were going to be able to avoid:
- customer service,
- pre-sales and after-sales product technical support,
- product returns support,
- legal issues,
- growing overheads if you need support staff or office space,
- accounting and record-keeping,
- marketing budgets,
- time management problems and personal stress, etc etc.
Drop-shipping from China
Not a lot of Chinese suppliers will really know what you are talking about if you ask about "drop-shipping". Mainly this is because small order quantities for international orders are quite a new thing in many product areas, so even the word 'dropshipping' may be unknown.
Chinavasion is an online wholesale electronics shop, and because we have no minimum order quantity, we have a lot of orders every day for single items being drop-shipped to customers all over the world. However, the factories we source the products from would never be able to deliver single items, even if they could cope with the logistics complications involved with so many small packages. It's the same with most factories - they won't do small orders. So if you are looking for China drop-ship suppliers, you may need to look at the middle ground of distributors and trading companies instead of trying to head straight for the factories.
In principle, Chinese suppliers probably won't have any problems sending goods to your customers. If they can already send samples or packages to your address, then why not to someone else's? The key really is finding suppliers with a low enough minimum order quantity. Even if you find a supplier with a MOQ of 10 pieces you may be able to drop-ship 5 of those to your customers and the others to yourself as a sort of combination of dropshipping and holding inventory. Or some suppliers may let you pay in advance for say 100 pieces and then ship them in small batches to different locations later.
The perfect situation is to find a Chinese supplier who can reliably and efficiently dropship single item packages anywhere in the world. If you approach Chinese suppliers and simply ask "do you drop-ship?" you may not get very clear answers because they may not understand the question.
Here are my suggestions for the questions you can ask your possible Chinese suppliers:
Do you have a minimum order quantity? Can I order one piece at a time?
Can you ship to [country]?
Is it OK to ship directly to my customers?
If you ship to my customers can you also provide me with invoices?
If you shipped directly to my customers could you guarantee that your packages and invoice would not identify your company? (This is one of the hardest things!)
Would you be able to label the packages and invoice with my own company name / logo? If so would you charge an extra fee for this?
If I order 20 pieces but ship to 20 different addresses, how can I do this? Do I have to make 20 separate orders? And if so do I still get the 20 piece quantity discount?
You will also need to discuss shipping options:
what method of shipping
how to quote / pay
how to get tracking details
how to deal with customs and taxes
how to deal with delivery problems
how to deal with returns
Obviously some of these things you will work out as you go along, but it's a good idea to think about some of the issues that are likely to arise so you can prepare yourself.
If you feel like asking me the above questions about Chinavasion's wholesale shop and using us to drop-ship electronics products to your customers, you'll already find all the answers in our Knowledgebase, which is quicker than emailing me! ;)
Tips for Successful Drop-Shipping from China
It may seem obvious, but please check with your supplier whether then can dropship, before attempting to place a dropship order! Don't dive into dropshipping and sell something to a customer, and THEN start asking your supplier if / how they can dropship. Do your homework!
Don't make promises about delivery time to your customers until you have tried the supplier and you know they can deliver in the way you want.
Under no circumstances drop-ship items that you have never seen. Your first order should be to yourself to inspect the goods and assess the supplier's service. This will also let you get an idea of the import tax situation for this particular product.
Follow my good communication tips for Chinese suppliers. Make requests not demands.
I think I've said enough about the general issues of drop-shipping. I want to return now to the question of selecting the best products to sell, which is vital to drop-shippers and in fact in any importing business.