One of the most important decisions you’ll make in your dropshipping business is choosing the right dropshipping supplier.
If your dropshipping supplier screws up it will be your responsibility as a business owner to make it up to your customer because you’re the one dealing with them, not the supplier. To lessen the incidence of customer complaints and chargebacks, ensure that you only partner with a genuine and reliable dropshipping supplier.
To get your business off the ground, you should contact suppliers for your dropshipping products. Dropshipping suppliers earn money when you make a sale, yes, but it does not guarantee that they have your best interests in mind. There are plenty of scammers out there looking to steal your money and they prey on newbie dropshippers who are mostly inexperienced eCommerce sellers.
The challenge is to avoid falling victim to scammers or fake suppliers. To do that, you need to know the red flags to look for when searching for dropshipping suppliers.
What are the different red flags to look for?
Many businesses are pretending to be dropshipping suppliers but they’re not. Fake dropshipping suppliers manifest any of the following signs:
- It does not offer product samples.
Customers value high-quality products. If you sell premium quality items, they are likely to keep buying from you. To avoid selling products with inferior quality, you should ask for product samples from the supplier. If you can’t get them for free, you can negotiate for a discounted rate. However, if the supplier refuses to provide product samples this is a red flag for you. Move on to other potential suppliers.
- Unclear contact and address details.
Legitimate suppliers must display their contact and address details regardless if they only have an online operation. Without these in place, that’s a clear sign that the supplier cannot be trusted.
- It can’t be reached through the phone.
Local or overseas, it is important that you talk with the potential supplier or supplier representatives on phone. If people in the dropshipping supplier’s office constantly give you the run around, it’s time to look for other suppliers who will give you the time day.
- Requires huge orders in advance.
Huge orders mean a huge payment. If the supplier requires that you do bulk orders and pay for them in advance, don’t take the risk. There are other suppliers you can buy products from.
- Have negative reviews on independent websites.
No supplier will admit to doing bad practices in their business. Look for reviews on independent websites, not the supplier. You’ll get honest critiques and reviews from there from retailers who have done business with the potential supplier. When the supplier has negative or suspicious reviews, don’t do business with them.
- Charges membership fees or subscription fees.
Reliable suppliers don’t charge membership fees or subscription fees on top of ordering items from them. If a supplier asks for any of these fees, it’s possible to be a scam.
- Accepts only bank wire transfer or money transfer.
Legitimate suppliers want to earn more profits as much as they can. To make sure that they can do this, they’ll accept different forms of payment and currencies such as credit cards and checks. Any supplier that insists on bank wires or transfers only wants to get hold of your money as much as possible. This is a red flag that the supplier intends to steal your money and will not send the products that you paid for.
- Sells products directly to consumers.
Real dropshipping suppliers do not reveal wholesale or individual product prices in public and do not sell directly to consumers. Those who do are not legitimate suppliers. They are retailers who sell dropshipping products at very high prices.
Still unsure if the potential supplier is a scammer or not? There are ways you can directly check every supplier on your list and these include:
Looking up their address on Google Maps.
If the supplier’s address does not show up or their business location is different from their given address, that’s a red flag for you. By using Gooogle Maps you can check out the street view to assess if their building is a distribution center, house, or an entirely different business.
Calling the supplier.
This is the quickest way of finding out if the supplier is authentic or not. If the phone doesn’t work, it’s a red flag. If someone answers the phone, here are things you can ask the supplier or his representatives:
- Their payment terms and if they’re negotiable or not.
- Additional charges on top of the product’s direct cost.
- If they’re selling directly to consumers.
- Their return policy and warranty or guarantee.
- Your expected gross margin.
- If they support data feeds for easy updating of your product offerings.
- When prices might change.
- If they manufacture custom items in case you want to create unique products later on.
When you talk with the supplier on the phone, sound like a professional, not a newbie. Dropshipping suppliers prefer retailers they can do business with for the long-term. If you come across as a newbie, they might not respond to you at all or if they do, they will charge you higher.
Search on Google the business name.
People who had a bad experience with a dropshipping supplier will likely post about it online. To find these, type the name of the supplier plus the word ‘scam’ or ‘fraud’ in the Google search box and hit enter. You’ll see in the search results if they are fraud or not.
Do a small test order.
You cannot only determine if the supplier is fake or not with this method, but you can also test their shipping time, packaging, and product quality. If the supplier is indeed a scammer, it will just cost you a small amount of money to verify beforehand. With this knowledge, you save yourself huge problems and losses by dealing with a fake supplier.
Research your dropshipping suppliers thoroughly. You wouldn’t want to risk your business on someone that can destroy your business rather than help it. If you notice that a supplier shows any of the discussed red flags in this article, avoid them at all costs. Never deal with a supplier who only accepts bank wire transfer or money transfer because they are more likely to run with your money. Ensure that you have checked them directly before you start dropshipping products from them. Don’t be a victim to scammers and let this post be your guide.