Why Use a Dropship Service?
A dropship service is more than just a wholesaler that ships and fulfills orders for you. They are one-stop-shops that offer products from multiple suppliers and include options that make it easier to add products to the website or online marketplace (Amazon, Ebay, etc.) you plan to sell them on. The best dropship services also include integration with many leading shopping cart software providers.
There are many benefits to using a dropship service. First, you don’t have to store inventory, which saves you on storage and shipping costs. You also do not have to deal with old or unsold stock. Second, because the wholesaler or supplier ships orders from its warehouse, you don’t have to manage relationships with multiple suppliers. Third, these services often have tools to let you add large quantities of products to the platform you use to sell your goods. This can save you a lot of time that would otherwise be spent in marketing your goods as well as other time-consuming tasks involved in the retail fulfillment process.
Dropshippers are not without their drawbacks. With so many products available, certain categories are oversaturated. Margins are thin as you have to price your products competitively. It’s best to find a niche and specialize in one or two areas rather than spreading yourself thin. And even though you bypass the headaches that come with storing and shipping inventory, you are still responsible for other customer service issues that inevitably arise.
Signing up for a dropship service is one step in starting an online business. The best services offer more than just products you can sell; they have tools and resources to make it easier to sell.
What You Should Expect From a Dropship Service
All dropship services we reviewed shared several features. They aggregate multiple suppliers and combine their services into one offering for you. Every dropshipper blind ships products for you. This means that they do not include information about themselves on the packing slip.
Dropship Direct allows you to customize the packing slip included with orders. Every dropship service also offers product order tracking, so you and your customers can make sure every order reaches its destination.
How You Sell Your Products
If you’re just launching an online business, you need to determine how you’re going to sell your products. Amazon, eBay and your own website are the most common options. Each of these options has its own advantages and drawbacks.
Amazon and eBay are easy to use and have a built-in audience. Both charge listing fees, which can eat into your profits. Creating your own website gives you more freedom and control, and you don’t have to pay third-party fees. Most of the services we reviewed can build a website for you at an extra cost.
If you build your own site, you will have to market and optimize it since you won’t have access to existing traffic. Managing your own website can also be more complex than simply listing your products on eBay or Amazon. If you already have an existing website, several services make it easy to upload products to it. Dropship Direct and Wholesale2b do this.
When evaluating these dropship services, we looked at the options they provide for managing inventory on the back end as well as the number of products in their inventory. We also looked at how dropship services manage shipping with the many suppliers they work with. Costs and fees were another factor that weighed into our rating. These include membership fees as well as costs associated with shipping products. Account support provided by the dropship services was the final factor we considered.
We appraised the services on our list using hands-on evaluation and research that attempts to replicate the buying process of a typical small business owner. The dropship services we evaluated had no influence or input over our testing methodology. Research was conducted through the services’ websites and by contacting them directly.
Inventory & Backend Management
A crucial factor in our evaluation of dropship services was the options companies offered for exporting products. Using a data feed or similar inventory-management feature, you can upload a large amount of products to your website (and other sales channels) and save time that you would otherwise spend manually adding each individual product. Dropship Direct is a standout in this respect; it uses Pushlist technology to create inventory feeds in formats for 20 different shopping carts.
When choosing a dropship service, you want to consider which products you’ll sell. The number of products available through the dropshippers we reviewed ranged from 2,000 to two million. While we considered the ability to handle a large inventory positive, we took into account that some services specialize in certain product niches. Megagoods, with a focus on electronics, and Smart Living Company, with home goods, are two dropship suppliers with smaller inventories and a focus on specific categories.
Typically what happens when you use a dropship service is that after a customer orders from you, you log in and place the order through the dropship service. One feature we liked was that some services integrate with your site’s shopping cart, allowing orders placed on your site to be automatically processed by the dropship service. This feature saves you time and streamlines the fulfillment process. Wholesale2b in particular had a strong shopping cart integration option.
Some dropship services, such as Inventory Source and Dropshippers.com, require you to select specific suppliers and don’t collect all the products under one roof. This could be a good option if you are interested in pursuing relationships with individual suppliers, but we penalized these services in our rankings because it requires more effort than all-in-one solutions.
Since many of these dropship companies work with multiple suppliers, shipping speeds vary. Other variables, including the location of the supplier and customer, affect the shipping speeds and costs. Megagoods is the fastest of the services we reviewed, with an average shipping time of one to two days in the U.S. Only a handful of services on our list offer international shipping, while a few more only ship to certain countries.
Costs & Fees
Most dropship suppliers charge a membership fee, which can be paid monthly or yearly. Some services charge a one-time fee. Monthly fees range from $14.99 to $59.95. Some dropshippers offer incentives to save you further. For example, plans to sell your products through eBay or Amazon (or your own website) are often cheaper than plans that involve the dropship service building a website for you. If you have a dropship service build a website for you, you’ll often pay a larger upfront fee as well as regular monthly hosting costs.
Dropship Direct had the best costs and fees. It does not charge a membership fee, though it charges a fee if you want to use its Pushlist data feeds. Wholesale2b and Megagoods are two other services with low membership fees. Doba charges the highest membership fees.
Other fees common with dropship services are restocking, dropship, and shipping and handling costs. Restocking fees are usually a percentage of the order cost and are charged when customers return non-defective products. Of the services on our list, restocking fees ranged from 15 to 20 percent. Dropship fees are charged per order in addition to regular shipping and handling costs and range from between $.99 and $5.95, though there are many services that don’t charge dropship fees. Shipping and handling costs vary depending on factors such as the supplier, your customer’s location and which delivery service the supplier uses.
It’s important to know the dropshipping company’s costs before signing up. Remember, besides membership fees and other costs, you also need to pay wholesale costs. There are also listing fees if you sell through an online marketplace.
Dropship Direct is the best provider for a basic plan that is low cost, aggregates products and allows you to export products to the widest variety of platforms.
We scored each of the dropship services on our list based on how forthcoming it was with information and how promptly customer support responded to our inquiries (both by phone and email). Several of the companies we reviewed proved difficult to contact. They either did not return calls or emails promptly, or they didn’t respond at all.
Several services have no listed phone number or email address and can only be contacted through an online ticket system on their website. As such, it’s important to consider how reachable these services are before you sign up. We recommend evaluating a services’ contact methods, their responsiveness and speaking to a representative before committing to a particular dropship service.
Doba and Smart Living Company had the strongest account support. Both were responsive and provided helpful information when we contacted them. Both also provide you with a dedicated account rep, who can give you one-on-one advice about what the best options for your business are.
Dropship Services: Our Verdict & Recommendations
The best dropship companies offer you the ability to manage inventory without having to juggle multiple supplier relationships. Keep in mind that most charge a monthly or yearly fee, so you’ll want to look around for one that handles the right mix of products and offers the best price for your business.
If you have a large business or want access to the largest inventory, Doba may be the best dropship service for you. It has over two million products and has several back-end management options uniquely suited for enterprise-level businesses. Doba does charge high fees.
If you are tech savvy, Dropship Direct may be a good option for you. Its Pushlist technology allows you to customize your data feed to add the products you choose to your site or marketplace quickly. Dropship Direct doesn’t charge membership fees.
Wholesale2b is a great option if you want a website built for you. The website is preloaded with the products of your choosing, and you can customize it from a variety of templates.
If you plan on selling products through eBay, Sunrise Wholesale may be the best option for you. It has an eBay wizard that allows you to manage your eBay listings. You can also link your eBay account to your Sunrise Wholesale account and load products directly from Sunrise Wholesale’s catalog.