Table Of Contents:
Dropshipping has quickly amassed global popularity and has become the most sought after online retail method to sell products. It does come with the biggest benefit because you don’t have to make any initial warehouse investments or maintenance. This is the best option for e-retailers who don’t want to deal with inventory management but are interested in doing online business.
However, it is most important for you to choose the best dropshipping companies in the market. What will you do? Or how to do it?
But first, let’s under the basics of dropshipping and what can you do with it!
What is Dropshipping?
It is a supply chain management methodology where the retailer doesn’t maintain the stock. Here, the drop shipper simply transfers the orders from the customers along with the shipping details to the manufacturer, wholesaler or another retailer. This party will directly ship the order to the customer.
In the case of a retail business, retailers make a profit based on the margin between the retail price and the whole rate. Some retailers also get a sales percentage in a commission that the manufacturer or the wholesaler will pay to the e-retailer.
How Does Dropshipping Work?
A dropshipping retailer may keep all the items on display in a physical store (brick & mortar) or can also provide an online or hardcopy of the product catalog to allow the customers to see and review all the items before they purchase them. The retailer or e-retailers can make all the efforts to keep this fact hidden from the consumers to prevent the source of wholesale reaching the customers directly or becoming widely popular.
One way of doing it is blind-shipping where the items are shipped without any return address. Another way of doing it is shipping via private label where the shipment is made by the wholesaler under the retailer’s address. In such a scenario the wholesaler will develop a packing slip that is customized to the retailer’s company details including their name, logo, address or contact information.
Dropshipping can take place when a small-scale retailer received a large order of any single product. Small retailers sell in small quantities. Here, the retailer might arrange for the shipment and the goods will be shipped directly to the customers from the distributor or wholesaler. In most cases, dropshipping is quite common for expensive products.
One of the emerging trends of dropshipping is private labeling. In such a case the manufacturer will provide a customized item for the retailer and drop ship it. There is a wide range of items that can fall in this category and these include customized logo apparel, keepsakes, photos, and customized formulae of nutritional supplements and vitamins.
If the wholesaler doesn’t have any item in stock then back-ordering will occur. Back orders may also come with long waiting times as the wholesaler waits for the new items to arrive. This can tarnish the retailer’s market reputation and image.
The Merits & Demerits of Dropshipping
Dropshipping also comes with its perks and downfalls. Let’s explore each of them briefly:
The primary advantage of dropshipping is that you as a retailer don’t have to deal with stock or inventory. For instance, when a customer places an order of $50 watch, the supplier will charge you $25 and you will send the invoice to your supplier. They will charge you $25 and ship the watch to the customer. You will collect $50 with a profit of $25. This seems pretty easy and interesting, no!
Some of the merits of dropshipping include,
- Very easy to start
- No need for managing inventory
- Expansion of assortments
- Simple to scale up or down
- You can even have a low operating budget
- Healthy cash flow
- Don’t need a website and can use any of the online high traffic marketplaces
- The average profit margin may be low but you don’t get any bad buys which can result in overstocking.
The ease of market entry in dropshipping is more of a dual-edged sword. More and more merchants will use this option and it becomes extremely competitive. Apart from that, there are other disadvantages that you might have to deal with. These are,
- Very difficult to find a reliable drop-shipper not serving several other merchants
- Sole control over the price and the product offers.
- Problems associated with quality control
- Customer service risks associated with selling items that are not available from the supplier
- Very low-profit margins
- Overcrowded market with intense competition
- No guarantee of profits
- Your online store will only be as good as the platform you are using for eCommerce
- A required basic skill set involves, writing product descriptions. Cropping photos, and managing products in shopping cart
- With more dropshipping suppliers you will face more workload
- Shipping fees from the wholesaler can be different from the market
- You are paying for the shipping fees entirely and cannot charge your customers
- Suppliers can make mistakes because there is no guarantee that they will fulfill all orders accurately
How to Find Dropshipping Companies?
If you are looking for the best dropshipping company then you are not alone. This is a highly competitive niche and you have to make all your decisions very wisely otherwise prepare yourself to face very stiff competition.
There are different ways of finding a quality drop shipper and you have to use them in combination to get the desired results.
#1) You can subscribe to a wholesaler directory
You can access a number of drop shipping directories online but not all of them will prove to be handy. They don’t offer any value or quality. But there is one and we have included it in our list of best drop shippers below as well. It is World Wide Brands and their directory provides you with access to a database of numerous dropshipping firms that have been pre-screened.
#2) Google it
When you are using Google to search for dropshipping companies you need to make sure that you are digging deep. The wholesale drop shippers are notorious for their slow or inconsistent service quality and they don’t pay much attention to marketing. Therefore, you have to scan through a number of search results to find any meaningful sources.
#3) Contact the manufacturer directly
If you have made your mind about the product that you will be selling then you can get in touch with the supplier and they will guide to all the authorized distributors of their products who are willing to dropship.
Things to Consider When Choosing Best Dropshipping Companies
In general terms, drop shippers don’t know much about how to market themselves to their target audience. For this reason, finding the right dropshipper will feel a mammoth task. You need to understand this fact that finding the right dropshipper is going to take a while. But this is not going to take forever. With proper research and using various resources, you can build a useful network in this regard.
Identify your niche
First of all, you need to identify the niche in which you are going to enter. You have to be very careful in your decision. Dropshipping comes with intense competitions regardless of the niche you are working on. For this, you will have to fully understand the demand and supply of your niche along with pricing and competition.
What value can you offer?
There is immense competition in the market no matter which niche you enter. To tackle this issue, you will have to come up with an idea about what value can you add. This is all about differentiating your business from the rest and creating a demand. You must provide a reason for your potential customers to buy from you when you are able to create value for the customer, your supplier will consider you worthy.
Start finding the suppliers
When you have identified your niche and the value that you can deliver, the next thing that you need to do is start looking for suppliers. You must keep in mind that looking for quality suppliers is a lengthy job and it will take a lot of your time.
But with patience and perseverance, you will find some useful entities that have the quality to offer. You can go through the online drop shipping directories or you can Google it. Another good way of finding quality drop shippers is by contacting the manufacturers. They will guide you to the dropshipping firms that they are working with.
Once you have listed down a number of drop shippers and you are quite content with the number of dropshipping firms you have then it’s time to order the samples. This is a good opportunity to check their products and test the quality of their services. Packaging and delivery times are other factors as well. This will allow you to witness firsthand what the customers are going to experience.
Dropshippers to avoid
There are various other factors to consider apart from the ones we have mentioned above. Online reviews and customer feedbacks are very useful in assessing online dropshipper. Make sure that you avoid any drop-shippers who ask you for a monthly or ongoing monthly fee. These firms might be part of some directory and may not be a single supplier.
Some dropshippers ask for a minimum purchase volume. For instance, you need to order at least 100 units or they won’t entertain you. Generally, all suppliers do and if they don’t then there are chances they these suppliers are suitable for wholesale dropshipping.
Comparison Chart of Best Dropshipper
Best Dropshipping Websites/Suppliers
Why we love it?
Arkartech’s Wholesale Program is one of the best opportunities for you to work with atop quality Dropshipping Manufacturer. It is part of the Shenzhen Arkartech Ecommerce Co. Ltd, an entity that has more than 10 years of experience in distribution. Its primary focus is on B2B and has developed long-lasting industry relations.
This dropshipping company deals with smartphone accessories, headphones, and smart home products. Check out Arkartech for more info on Uiisii TWS60 Bluetooth headphones, smart home products and much more. They have a wholesale program where they offer big discounts to their B2B clients for bulk orders. Arkartech can provide OEM services for select products in the catalog and also offer customized logo services.
Arkartech also provides you with consultation services for recommending top-selling products as well as sourcing them. Arkartech products are superb in terms of quality because they are made for rigorous use. Therefore, we are talking about quality here and you can be the retailer of these products drop shipped by Arkartech to the customer for you.
With this program, you will get top-quality products, highly competitive prices, express shipping, stringent quality control testing, exceptional customer support, and a 1-year limited service warranty.
To get the details about the price, you need to contact the Arkartech staff.
- High-quality products
- Express shipping
- 1-year limited warranty
- Competitive pricing
- Excellent customer support
- Limited product categories
Why we love it?
The best thing about AliExpress is that you can join this marketplace for free. Yes, you can join their dropshipping program that will not charge you a dime. Another good thing about this service is that you get an option to work with different brands across different industries. This dropshipping supplier is one of the top online sellers across the globe and for this reason; you will get a lot of variety in terms of offerings.
You can also join their full course in which the company explains how it all works and how you can start your own successful dropshipping business. Furthermore, you will only need an email address, the business information about your company as well as the bank and tax information. That’s all you need to start your business with AliExpress.
You can avail dropshipping services without paying anything because it is absolutely free of cost.
- No charges
- Huge variety of products
- A wide number of sellers
- Not many mandatory requirements
- Stiff competition
- Single supplier may be dealing with multiple merchants
Why we love it?
Many online directories of sellers make it easy and simple to discover manufacturers. Therefore, Wholesale Central is the ideal dropshipping company that serves online since 1996. It is also the best platform that provides a source to distributors, manufacturers, importers, and wholesalers.
The company does not sell to consumers and retailers because they are strictly B2B. Additionally, this B2B directory assists buyers to search for wholesale dealers and products with categories as well. These categories include sporting goods, smoking products, office supplies, baby products, military goods, general merchandise and much more. It is one of the best dropshipping suppliers in the world.
Furthermore, the Whole Central personally reviewed and screened every business or company that has registered on it. This is to confirm that registered companies are true wholesalers or not. The best thing is that it offers great customer services and tries to solve all the complaints as soon as possible.
If the company finds any registered company to be fraudulent, they remove from the list without losing their values. In addition, if you launch a new business relationship then we recommend you to choose Wholesale Central to encourage buyers. They are already dealing with more than 1.7 million wholesale consumers and delivers leads.
B2C category can enjoy free registration. B2B category has to pay a small amount. The costs for getting 6 months membership pay $399 and 1-year membership pay $598. Additionally, new members can save $200 at the time of registration.
- Increase digital traffic
- Improve SEO
- Trusted suppliers
- Offer bonus features
- Search products by categories
- No customers sale
- No retails sale
What we Love It?
SaleHoo is a powerful and research tool, online community, and supplier directory for e-commerce stores, wholesalers, and dropshippers. You can find millions of perfect products as well as suppliers in minutes. Since 2005, the company has facilitated more than 137000 those people who wanted to establish and grow their e-business. It is one of the best dropshipping platforms to consider.
It is very easy to use tool where online sellers search profitable goods from possibly certified and a low-cost supplier. The best thing about SaleHoo is that they give award-winning and unlimited training support in every step. You can get everything that you want in one place. Moreover, the company gives you 60 days money-back guarantee to satisfy you with their services.
You can discover the top supplier by searching for product categories with SaleHoo dropshipping. These are consisting of home & garden, consumer electronics, computer & software, travel & outdoor, shoes & fashions, baby gear, antiques & collectibles and much more.
This research tool offers you an annual and lifetime subscription. You have to pay $67 for a year and if you want to access tool lifetime you have to pay $127.
- Search branded products
- Offers developer, affiliate programs
- More than 8000 trusted dropshipping suppliers
- 24/7 customer support
- Not a direct supplier
What We Love It?
For 20 years Worldwide Brands is the name of real wholesalers, real dropshippers directory. You can direct access to all dropshippers or wholesalers where no middlemen involve taking profits. Additionally, there are more than 16 million certified products and wholesalers in their directories.
You can search for a preferable product under the major categories. These are toys, game & hobbies, home & garden, jewelry & watches, consumer electronics, shoes, clothing and accessories, babies & maternity, party & special occasions, and much more.
In addition to that, Worldwide Brands feels proud to list as a wholesaler on the travel channel, practice e-commerce, national geographic channel, brides, and entrepreneur.
This is the most secure, safe, and scams free BBB website that is rated as A+. Moreover, the company will never sell or trade your personal information to anyone. It is the real sourcing of wholesale and ideal for eBay, Amazon, and additional online stores. It is definitely a reliable dropshipping company for starters.
The actual price to get lifetime access to Worldwide Brands is $299, but if you get access right now, you can avail the discounted price. They are offering Labor Day sale and discounted price for lifetime access is now $224.
- Androids and iOS App
- Ideal for any online stores
- Better wholesale directory for better business
- WBI certified
- BBB & A+ accredited business
- Difficult to generate a profit on eBay and Amazon
- Costly membership
What We Love It?
Dropship Direct is the lowest cost company in our list of drop ship companies. The best thing is that this is a free dropshipping supplier and no additional membership monthly or yearly cost required. Moreover, you can search for products in categories as well. The categories involve home goods, automotive products, electronic appliances, and apparel good.
It has almost 100 suppliers, selling over 120000 products. Additionally, you can also use the PushList technology feature that has a feed with some data. You can feed this list with some products that you want to order later. Nevertheless, remember that the PushList technology service is not free; you have to pay a few amounts for it.
You can sign up for free in this dropshipping company. On the other hand, it has featured with PushList technology and if you want to use it, you have to pay less than $30 monthly.
- Free signup
- Filters for convenient
- No minimum range
- PushList sync inventory & list
- Lowest cost dropshipping company
- Require signup for viewing product prices
- No real-time updates of inventory
- Require $30 per month for using PushList feature
Why We Love It?
MegaGoods founded in 2004 and has now become one of the top companies in the industry of drop shipping. The main goal is to provide you excellent services as well as quality merchandise. They give you a brilliant opportunity to spread out your business. MegaGoods Company has high demanded items in its warehouses. They also offer you free shipping on the selected item.
Moreover, MegaGoods is the name of quality, efficiency, and reliability that offers a wide range of products. These products have organized as categories. The categories are consisting of Bluetooth products, docking stations, portable players, healthy & beauty, kids electronics, kitchen gadgets, office & home, novelty products, security products, tableware, tools, and much more.
General services for signup at MegaGoods require $14.99 monthly as a signup fee.
- 30 days of a free trial
- Great selection of branded items
- Efficient and fast processing
- PCI & EDI compliant
- Shipping with private label
- Reliable customer services
- Cut additional cost at per order from your profits
- Poor customer services
- Mostly electronic products available
Why We Love It?
Oberlo facilitates many people to establish their dropshipping stores with ease. You can also sell your products on Shopify. Oberlo is the best dropshipping application that has made for Shopify Company that also sells merchandise. After finding a product, you can directly add it to your Shopify store and start selling instantly.
Oberlo handles your products and no need to worry about warehousing. Moreover, whenever you planned to sell products, just order from Oberlo and it performs further tasks for you. Therefore, you are free of packaging the Oberlo does it for you. Oberlo has professionals in dropshipping. As we can say that, the company has a network of a supplier who holds your package, inventory, and ship products to you.
Oberlo is free with Shopify where you can sell products. You can start with a starter plan free. Later on, you can extend your plan and pay a little cost. For starting you can choose a free starter plan, pay $29.90 monthly for the basic plan, and $79.80 monthly for the pro plan.
- Sell products on Shopify
- Free of packaging
- Effectively extend your business
- Free of inventory
- 100% free and secure
- Not a standalone app (works with Shopify)
- Redirect with Shopify for adding products
Why We Love It?
Sunrise Wholesale Company is a wholesale dropshippers that found in 1999. They have a leading supplier that provides more than 20000 drop ship wholesale products. The company is a member of the Better Business Bureau along with rating A+ as well as the eBay developer program. You can securely process all transactions with a credit card. This is because TrustCommerce keeps credit card and your personal information secure.
Furthermore, they offer more than 20 product categories. Few of them are electronics, jewelry, kitchen, mythical & medieval, home decor, sports and fitness, toys & games, water fountains, bath and body, bulky buys, and much more. In addition to that, you can get daily update alerts on your registered Emails.
You can start your business with a monthly and yearly membership. The company gives you 7 days of free trial in both subscriptions. You have to pay $49 for a monthly subscription whereas $199 for a yearly membership.
- Automation in marketplaces
- Thousand plus popular products
- Access product feeds
- Great customer service
- Daily update alerts
- Expensive subscription
- No offer international shipping
Why We Love It?
Doba is a marketplace where you will find multiple suppliers and manufacturers. You can create your own customized list of products after searching. Generally, the company has more than 20 dropshipping suppliers. You can also start your business with Doba because it is very easy to use.
Products are organized in popular categories. These are consisting of apparel, books, automotive, entertainment, home, kids, sports, electronics, and books. Additionally, the main objective of Doba is to empower wholesale and retailers suppliers of every size for easy and simple business.
Using Doba dropshipping, you can start your business with a free 14 days trial. You can also choose additional membership plans for the long term. Pay $29 yearly for the basic plan, $69 yearly for advanced, $249 yearly for pro membership plan.
- More tools, more integration, and more products
- Enhanced filter and search capability
- Create inventory
- Alert about proactive inventory
- Data export
- Ease of use
- Restocking fee
- Additional fee at per order
Why We Love it?
Inventory Source is serving its customers by providing automation dropship tools since 2003. This is because enabling successful and sustainable e-commerce businesses. This best automation software tracks all related details of products.
Furthermore, Inventory Source is the biggest dropship network, which provides access to over 150 suppliers. It permits you to synchronize inventory, route orders, and upload product data automatically. Inventory Source connects with dropship suppliers to any online store or marketplace virtually. These platforms are like eBay, BigCommerce, Amazon, and Shopify.
Inventory Source offers you both full automation and inventory automation plans for your e-businesses. You have to pay $50 monthly for choosing inventory automation. Whereas, for picking full automation plan pay $150 per month.
- Optimize inventory sync
- Order automation
- Entire product data integration
- Browse products
- 24/7 customer services
- For speed up pay an additional fee
- Order limitation
- Offers fewer features
Frequently Asked Questions
#1 - What is the difference between manufacturer, dropshipper, and wholesaler?
Manufacturers are the producers of a specific product, while a wholesaler can be anyone who purchases directly from the manufacturer. A wholesaler sells to retailer at a discounted wholesale price. On the other hand, a dropshipper is anyone who will directly ship the product to the customer.
Therefore, a manufacturer or a wholesaler can also play the role of dropshipper. A manufacturer who also ships products to your customer is a manufacturing drop shipper, while a wholesale distributor who also ships directly to your customers is a wholesaling dropshipper.
#2 - How should I choose which products should I sell?
When choosing a niche you will have to be extremely thoughtful. You need to research and understand market demand, competition, pricing, available suppliers as well as the value that you will add. All these areas contribute to the success or failure of your business.
#3 - Which option is better, buying in bulk or drop shipping?
If you are fresh ad want to test your market performance then the better option for you here is dropshipping. Restrain yourself from committing to any large inventory. With the passage of time, when you understand how your market works and how much of the volume you are really expecting to sell only then go with buying in bulk to save your money.
#4 - What is mandatory to work with a drop shipping firm?
If you are in the US, any legit dropshippers won’t work with you unless you have a licensed or legal business and you must have an Employer ID Number. This EIN works like a social security number for your business. If your state charges sales tax then you will also require an ID for sales tax from your respective state.
In the US, creating and developing a legal business is not that complicated and you can complete it within a couple of hours with the website of your State Department of Commerce. In most cases incorporating your business will cost no more than $200. Once you have developed and registered your company with your state then requesting an EIN for your business from the IRS is not difficult at all.
But you will have to ensure that what kind of business or corporate structure works best for you. You must research this part extensively as well. If you are not able to find any conclusive answers then we will suggest that you consult an attorney or an accountant.
#5 - What are the charges of dropshipping companies?
There are three potential charges that you might encounter from your drop shippers,
These fees are very common for dropshipping. They are for covering the expenses associated with the packaging and shipping of any single order or product. These fees can range between $2 and $5 but can be significantly higher for larger goods.
Some dropshipping firms might also go for monthly fees. These are just to provide you with a privilege to do business with them. In most cases, this is going to be an indication of fake dropshipper or poor quality services. Any high-quality drop shipper won’t ask you for any monthly fee and if they do then you should be wary.
Minimum purchase size
Some legit dropshippers might require a minimum purchase order either on a monthly basis or on your first order. You need to meet this sales threshold or they will start charging a fee. This is an indicator of serious dropshippers. They want to filter out the non-serious businesses because they don’t add value.
Dropshipping has become quite popular because there is no barrier to entry in the market. But the market is highly saturated. It is important for you to understand that finding the right dropshipper for your business is critical. But here’s what is even more important than that; it’s your niche and what value will you offer to differentiate your business from thousands of others.
You will face stiff competition and for that, you need to be ahead of the rest. Finding a quality dropshipper will assist you in boosting your business. Plus it will also help in delivering on the value claims that you have made with the customers. A poor quality dropshipper can tarnish your market reputation as a retailer and for this reason; you need to be very careful in selecting the right dropshipper for your business.
So have you been thinking about dropshipping? Which one of the above listed dropshipping companies have you worked with? Leave a comment below and we’ll get back to you in no time!