When on the hunt for wholesale suppliers, it’s critical to know how to differentiate between legitimate wholesale suppliers and retail stores posing as wholesale suppliers.
A true wholesaler buys directly from the manufacturer and will usually be able to offer you significantly better pricing.
How to Spot Fake Drop-shipping Wholesalers
Depending on where you’re searching, you’ll likely come across a large number of fraudulent wholesalers. Unfortunately, legitimate wholesales are traditionally poor at marketing and tend to be harder to find. This results in the non-genuine wholesalers – usually just middle men – appearing more frequently in your searches, so you’ll want to be cautious.
1. They Want Ongoing Fees – Legitimate wholesalers don’t charge their customers a monthly fee to do business – scam artists do. Take a hint, and walk away from them.
2. They Sell to the Public – To get genuine wholesale pricing you’ll need to apply to a wholesale account, prove you’re a legitimate business and be approved before placing your first order. Any wholesale supplier that offers products to the general public at “wholesale prices” without collecting business information is just a retailer offering items at inflated prices.
3. Per-Order Fees – Many drop-shippers will charge a per-order drop shipping fee that can range from $2 to $5 or more, depending on the size and complexity of the items being shipped. This is standard in the industry, as the costs of packing and shipping individual orders are much higher than shipping a bulk order.
4. Minimum Order Sizes – Some wholesalers require a minimum initial order size which is the lowest amount you have to purchase for your first order. They do this to filter out small merchants that will waste their time with questions and small orders.
If you’re dropshipping, this could cause some complications. For example, what would you do if the supplier has a $500 minimum order, but your average size is around $100? You don’t want to pre-order $500 of product just for the privilege of opening a dropshipping account.
If this happens, it’s a good idea to pre-pay the supplier for the minimum amount, so you have a credit for future orders while fulfilling the minimum requirement. This way, you don’t need to place a $500 order without having corresponding customer orders.
Finding Wholesale Suppliers
Now that you can spot a fraud from a legitimate supplier, it’s time to start your search for suppliers. You can use a number of different strategies, some more effective than others. Here’s a few to get you started:
Contact the Manufacturer
Contacting the manufacturer directly is an effective way to locate wholesale suppliers. If you know the product(s) that you want to sell, call the manufacturer and ask for a list of its wholesale distributors. You can then contact these wholesalers to see if they dropship and inquire about setting up an account.
Since most wholesalers carry products from a variety of manufacturers, this strategy will allow you to quickly source a selection of products within the niche you’re exploring.
You can also search using Google:
- You have to search extensively: Wholesalers are terrible at marketing and promotion, and it is unlikely that they will appear on the top of search results
- Don’t judge the website – Wholesalers are notorious for having old websites. Many suppliers have cringe worthy designs, don’t let bad graphics stand between you and a good wholesale company.
- Use Lots of Modifiers – Wholesalers aren’t doing extensive SEO to ensure you find their websites, so you may need to use different keywords, such as “distributor,” “reseller,” “bulk,” “warehouse,” and supplier.”
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