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How to Start a Relationship with a Drop Ship Supplier

Finding a reputable and reliable drop shipping partner is a critical ingredient when establishing yourself as an online retailer. As important as finding and locating a drop shipper, is fostering a long term relationship that will be rewarding for both parties. This article will outline some guidelines to be aware of when approaching drop ship manufactures for the first time.

The benifits provided by a drop shipper are tremendous when you consider the overall benifits it gives to the online merchandiser. As a retailer you're able to sell and market products without the hassel of stocking inventory. This business model allows ordinary people to start on a part time or full time basis and operate without incuring huge over-head costs. A terrific advantage when operating on a shoestring budget. Having established the fact that using drop shippers is a good idea, how do you go about building a relationship.

You Should Look for the Direct Drop Ship Manufacture.

Getting involved in this business requires that you understand the different levels of retailing. Foremost, to truly operate on a reasonable profit margin you need to purchase merchandise from as close to the manufacturing level as possible.

Unfortunately, many just starting out get hood winked by third or fourth tier distributors posing as wholesalers. Thus tricking people into believing they are buying at wholesale when they are not.

It's important to get a clear picture of the distribution process. At the top of the distribution chain of course you have the manufacturer. They mass produce one or many products, they in turn sell them in large bulk but sometimes they will ship in small quantities. Depending on the product they will drop ship directly to your customer. This would be the optimum place to gain a drop ship partner.

Below the manufacturer is what's known as a second tier distributor. These companies usually have developed trusting relationships with the manufacturers and run large distribution networks that span large regions. It is at this level where you have your best opportunity to set up drop shipping alliances. If you get any further away from this level, like third and forth tier distributors your profit margins tend to go way down. This can really hurt if your trying to remain competitive. Direct manufactures and second tier distributors is where you want to focus your efforts on building mutual relationships.

Its Your Approach that Gets You What You Need From a Drop Ship Manufacturer!

Prior to contacting anyone you must first legally set yourself up as a business or legal entity. Don't be ridiculous by thinking that your going to be able to make any progress with manufacturers or second tier distributors, without this basic non-step to start. The bottom line is drop shipping suppliers will not even think about speaking with you without a Fed Tax ID number and or resalers license.

With your proper paper work in hand you can contact product sourcing companies and manufactures. Many can be found through a directory service known as the Thomas Registry which can be accessed at http://www.thomasregister.com

Once you've decided on a supplier you can simply phone them to begin the account set up process. Some may only be available through regular postal mail or email, in that case you will have to contact them in that fashion. Be sure to include your contact information and be specific about what you want.

You will want to collect some important information, to set the ground work for a solid relationship.

1.) What are there shipping terms. While there are many shipping services out there, most will use just a select few.

Dealing with a supplier that uses a freight forwarding company that offers online tracking will allow you to provide quicker accountability of orders you have placed. Additionally, providing tracking #'s to your customers adds yet another layer of comfort and makes them feel more confident in their purchase. Further questions may include, whether or not they offer online ordering and if they will affix a customized label to your order.

2.) Negotiating the price of the products. Most manufactures or second tier wholesalers have standard pricing. If you choose to purchase in bulk you may be able to secure a lower price per unit. Usually the wholesaler or drop ship manufacture will have a set price break and schedule for bulk purchases.

3.) Formulate a payment plan that suits your business. It's best to arrange your chosen method of payment upfront. Usually you can set up credit terms through standard methods. Most times you can pay per order with either a credit card or business check.

4.) Have a clear understanding of their product return procedure. How do they handle credits and customer returns. When a customer wants to return product or merchandise do they return it to you directly or do they return it to the manufacture or the drop ship supplier. Having these issues ironed out upfront will ensure a smooth operation.

Finally, setting your business up the right way from the get go will help you handle issues as they arise. Having a reliable product sourcing company that you're able to build a solid relationship with, will be paramount to having and running a successful drop shipping business.