There’s a lot of fake companies out there posing as legitimate wholesale suppliers, when in fact they’re not buying direct from manufacture or even have product on site, and are taking significant mark-up. As a dropshipping you want to find the best margins as you can, so you want to go with companies that are offering products at truly wholesale prices.
Unfortunately legitimate wholesalers don’t tend to be expert marketers, as B2B and not B2C businesses, so it’s easy to come across a large amount of “fake” wholesalers before you find a legitimate one.
So how do you spot the real ones?
They don’t ask for ongoing fees
Real wholesalers don’t charge customers an ongoing fee for the privilege of ordering from them. If you’re asking for a membership fee, you’re more than likely not dealing with a legitimate wholesaler.
They don’t sell to the public
To get genuine wholesale pricing you’ll need to apply for a wholesale account, which will require you to prove you own a legitimate business before you can place your first order.
Any “wholesale supplier” that offers products to the general public at “wholesale prices” is just a retailer.
As a dropshipper you’ll get per-order fees
This is common if you’re placing direct to consumer dropshipping orders from a wholesaler over bulk ordering. This is because the costs of packaging and shipping individual orders is more expensive for a wholesaler.
You encounter a minimum order size for your first order
Some wholesalers have a minimum order size they expect from new clientele, to filter out window shopping merchants that will just waste their time.
As a dropshipper this is difficult if your first order requirement is $1000 but you only have $200 worth of orders.
One way to get around this is to deposit credit into the wholesaler to make up the amount. In this way you’re committing the minimum amount of business to the wholesaler, without ordering stock you might not be able to sell.
I’m glad someone wrote this up. Don’t trust every company that calls themselves a wholesaler. Do your research and always look for the best deals. Dropshipping is a margins game. If you want to compete against companies that carry stock, without a huge dropshipping mark-up, you need to find the best suppliers.