Dropshipping from different suppliers has both advantages and disadvantages.
When you’re just starting with dropshipping, sourcing dropshipping products from one supplier seems the safest thing to do. After all, it would be more convenient for you because you will only deal with one supplier and have a streamlined ordering system, not to mention the decreased administrative costs. However, if you only work with a single supplier, you’re putting all your eggs in one basket. And this is very risky, especially for a newbie dropshipper.
There are several reasons that a supplier will not be able to ship products to your customers.
- The product is out of stock and re-stocking will take weeks.
- Their warehouse is destroyed by a natural disaster like flood, fire, or hurricane.
- They decided to retire and close the company for good.
- They went bankrupt and have to shut down the operation.
- They are being suspended for legal reasons and have to terminate operations temporarily.
These are just a few scenarios that may arise when dealing with one supplier. And if any of these happens, you’re screwed. So how do you mitigate the risk? Work with different suppliers!
When you partner with different suppliers, you can minimize the risk of stockouts and supply disruptions which will negatively affect your business. As customers prefer to buy from trustworthy businesses, your inability to update your product inventory in real-time can make you lose their business. This can also result in multiple refund requests and chargebacks which can cost you more money as well as the risk of getting banned by your payment gateway.
What are the advantages and disadvantages of different suppliers?
Dropshipping products from different suppliers lessens the risk of supply disruption. If supplier A runs out of stock of a particular product, you can go to Suppliers B or C. There might be a bit of difference in the pricing and color/style variants but the product delivery will not be interrupted or delayed.
Letting your suppliers know that you’re not exclusively working with them can be favorable for you as well. If you’re getting huge orders daily, they would try to outcompete each other by offering you the best price and terms. You can then use this opportunity to negotiate better deals with your suppliers.
However, there are drawbacks to having different suppliers too and these include:
- Negotiating with multiple suppliers can take more time and energy.
- Managing processes will take more effort than a single supplier.
- Less bargaining power because you’re splitting orders to several dropshipping suppliers.
- A low number of orders can make you pay higher prices.
If you’re a one-man show, managing different suppliers can be overwhelming at first. Yet, it is still doable if you establish a process that will make things easier for you. To make your operations run smoothly, ensure that you took care of the following aspects in your dropshipping store:
Vetted your dropshipping suppliers.
Be mindful when choosing for suppliers of your dropshipping products. As there are many fake and unreliable suppliers out there, it is a must that you assess the credibility and reliability of your potential suppliers. You can find more info on choosing the right dropshipping supplier here.
When you vet your suppliers before you carry their products in your store, you will eliminate the availability issues that may arise. It would be ideal to have a main supplier and at least a couple of back-up suppliers for the products you sell. Just make sure that the product of the back-up suppliers is identical to the main supplier so you can switch them in when needed. Don’t know how to approach suppliers the right way? Use this article as a guide.
Implemented SKU differentiation in your products.
Products are organized by SKU for quick identification based on color, size, manufacturer, and so on. eCommerce businesses, dropshipping or not, should have a unique SKU for each product being sold. SKU management will let you know which is your best-selling items and which dropshipping suppliers sell the most.
Although suppliers have their SKUs, you need to differentiate the SKUs you use so you can easily identify the supplier for each ordered item. This way you will not make the mistake of forwarding the order to the wrong supplier. Add as a prefix to your SKU the initials of the supplier’s name to ensure the use of unique SKU.
For example, a phone case with SKU143 is being offered by two suppliers, Best Products and Case Unlimited. The SKUs of the phone case at your online store will be:
Best Products Phone Case: BPSKU143
Case Unlimited Phone Case: CUSKU143
Even if you have more than 50 suppliers, you can easily see who got the most orders by implementing this system of organization.
Integrated an app that can automate order fulfillment.
Manually copying and pasting customer info when fulfilling orders from customers can take more time and energy. If you’re doing all the work in your business, you may not be able to fulfill all customers on time especially if you are getting at least 100 orders a day. With a dropshipping that lets you fulfill orders in one click, forwarding each order to appropriate suppliers will be a breeze.
Once you have taken care of these aspects, the next issue to resolve when dropshipping with different suppliers is the delivery of purchases to your customers.
How to manage delivery with different suppliers?
One issue that dropshippers face when sourcing dropshipping products from different suppliers is split orders. Some customers might order multiple items in one transaction and from different suppliers. When this happens, it will be hard to ensure that all items will arrive at the same time in the customer’s doorstep. To resolve this problem, there are two approaches you can take and these are:
- Get a fulfillment company to consolidate your orders, pack them in one box, and ship the items to your customer. This can cost you money but you’ll have more control over the packing and shipping of products.
- Inform your customer beforehand that the items will be delivered in separate packages. Make sure that you provide the tracking numbers so both you and the customer can track the progress of the delivery.
Dropshipping products from different suppliers seems like a logistical nightmare if you don’t know how to manage it the right way. If a supplier is causing you hassles then drop them because they will only drag you down. Work only with reputable suppliers that you can reach anytime you have an issue or question. Having the best price is not enough when it takes months to deliver the products to customers. Therefore, work only with dropshipping suppliers that can help you create a better impression and establish trust with your customers.
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