If you have strong marketing skills and good web sense, running a dropshipping business can be very lucrative. But like any business model, problems are sure to arise from time to time. Most of the problems dropshippers face come from supplier issues. So, check out these common dropshipping supplier problems and issues and find out how to avoid them.
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It’s great that a dropshipping business model means you don’t have to handle order fulfilments, as that side of things is left to the manufacturers or wholesalers in the supply management chain. But without your own warehouse full of stock, it can be difficult to ensure the products you sell are always available. Indeed, suppliers running out of stock is one of the most common dropshipping supplier problems. There are two ways you can solve this problem. The first is to use software to keep track of your supplier’s inventory. The second is better: have multiple suppliers for the same product.
You can use both methods, but the latter means it’s much less likely that you will not be able to fulfill a customer order. Of course, it also means you can make more sales. If you offer a fast-selling product, you don’t want to miss out on opportunities simply because your one-and-only supplier has run out. In many cases, multiple suppliers can fulfill the same product. For example, by using the excellent dropship automation software from SparkShipping, one product is automatically connected to multiple suppliers and routed to the best possible supplier.
Another common supplier issue that dropshippers face is unexpected delays. Most products that dropshippers sell are manufactured overseas, which makes delivery logistics that extra bit more complicated. After all, the products you sell that are sent directly to your customers from your supplier will often go through various countries, each with different rules for exports, and various time zones. So, delays can happen. Sometimes delays can be predicted, though. By using an efficient warehouse management system and multiple suppliers, you can ensure orders are not so commonly subject to delays.
Just like different countries will have different export duties and rules, they will often have different safety and quality standards too. So, if you’re selling products that originate overseas, you need to make sure that the safety and quality standards conform to the country in which the product is being sold. Without safety and quality maintenance, products could be recalled. Not only will that negatively impact your turnover. It could also be very damaging to your business’s reputation. To make sure safety and quality standards are maintained, check that the products being produced in, say, China, meet the standards for, say, the United States.
If you’re handling tracking codes given to you by your supplier, so you can deal with any customer issues should they arise, it’s important to check that the tracking code is valid before you pass it on to the customer. It may sound like a little thing, but if you want to guarantee every delivery is tracked and therefore gets to your customers, checking for invalid tracking codes is crucial.
Due to the business model of dropshipping, many companies are pretty much at the mercy of their suppliers. That means your supplier could increase prices on their raw products, leaving you no option but to pay the additional cost out of every sale. You can avoid that from happening by implementing a supplier policy before you begin working in collaboration with the supplier. Write a formal policy that your supplier must adhere to. If the supplier signs the contract and agrees to your terms and conditions but ends up flouting the rules later, you would be able to sue for breach of contract.
These are the best ways to avoid dropshipping supplier problems.