E-commerce is a growing trend. Many individuals are using their own websites to sell goods and services, but there are also many who prefer to use platforms like Amazon or Etsy. However, selling products on these sites can be costly, and the competition is usually much more fierce. Dropshipping offers a low-cost alternative that allows you to sell goods without having any inventory of your own. China dropshipping fulfillment has become a popular way for e-commerce companies to start their business. It is an excellent choice because it allows entrepreneurs to get started with low overhead, while also allowing them to take advantage of the lower prices offered by Chinese suppliers.
What Is Dropshipping?
Dropshipping is a business model in which ecommerce entrepreneurs sell products without having to carry or store inventory. When a store owner receives an order from a customer, they simply contact the supplier (which is often done automatically), who will then ship the products directly to the customer’s door. Dropshipping is a great way to start an online business with little up-front investment, since investing in product inventory and storage is not required.
While businesses often maintain their own dropshipping operations, it becomes more difficult to do so as a business grows. When businesses hit a higher volumes of customer orders, they often look to dropshipping agents for help.. These agents or companies manage the inventory and shipping for their clients’ online stores.
When businesses decide they need the assistance of a dropshipping agent, they often transition away from true dropshipping and begin to invest in purchasing inventory upfront, warehouse management, and other, more traditional, supply chain functions.
What Is Dropshipping Order Fulfillment?
Dropshipping order fulfillment is part of the dropshipping process when a customer’s order is shipped. In traditional dropshipping, the online store doesn’t fulfill the order. Instead, the store passes the order to their supplier, who will fulfill the order directly to the customer. Order fulfillment can be performed by the supplier or by a dropshipping agent. Usually, as a business begins to grow and is looking to efficiently scale, they will look to a dropshipping agent to help fulfill order when volume increases.
EcommOps helps execute order fulfillment logistics for dropshipping stores with established, high order volume that use suppliers based out of China.
What Is a Third Party Fulfillment Company?
A third-party fulfillment company is a business that stores, packs, and ships products on behalf of an online store. In particular, a third-party fulfillment company is not associated with your supplier. Dropshipping agents can be third-party fulfillment companies, though many agents partner with preferred suppliers and receive a financial incentive for directing clients to those suppliers.
Many businesses look to third-party fulfillment companies when they want to scale their businesses but do not want to invest the time and resources needed to handle order fulfillment in-house. These third-parties can provide a one-stop-shop for all services associated with order fulfillment, like warehouse managing, shipment tracking, and returns management.
EcommOps is a true, third-party fulfillment service. We don’t receive kickbacks from suppliers. Instead, we partner with clients and the suppliers they already have, or we help businesses find suppliers that might be better suited for their business needs.
What Are the Benefits of Dropshipping?
Dropshipping offers a number of benefits, particularly for startups, small businesses with low order volume, or established businesses testing a new product on the market. Some of these benefits include:
- Starting an online business (or testing a product) with little to no upfront investment.
- Smaller dropshipping stores can be ran part-time, which further lowers the risk of someone starting a new business.
- Most product issues can be resolved by contacting the supplier, who will do the legwork to resolve the problems, usually by sending a replacement or issuing a refund.
- Store owners have complete control of their available inventory and can adjust their inventory needs based on customer demand.
As stores begin to grow, these benefits begin to diminish (we’ll talk more about the challenges of dropshipping businesses further in this article).
What Are the Challenges of Dropshipping?
Dropshipping can offer entrepreneurs an exciting, low-risk way to start a businesses and establish a brand. However, dropshipping is not without its challenges. Some of these challenges have to be dealt with anyone running a dropshipping businesses, some are niche specific, while others can be resolved by partnering with a dropshipping agent.
Finding a Profitable Niche
If you want to be successful in dropshipping, it’s important to find a product niche that is profitable. You want a product that:
- Can be sold at a comfortable profit margin
- Is not already saturated in the market
- Can be reliably sourced
- Has the potential to establish a brand that can launch other products.
As you can imagine, this can be a significant challenge to those hoping to jump into dropshipping. Fortunately, there are a few steps you can follow that can help you land on a profitable niche:
- Use Google Adwords Keyword Planner to identify keyword traffic and competition for those keywords
- Use Amazon’s Best Sellers List to see what products are popular and what niche those products are in
- Look for online communities dedicated to niche products or industries
It take time and effort to find a profitable niche, but it’s worth the work. A product with a high profit margin will also make it easier to scale your business as you increase order volume.
Building a Brand
When you build a brand, you create an identity and a reputation for your business, but this can present a huge challenge for dropshippers. First, an online store may be selling a generic product (which is common among dropshipping), which can make it a challenge to market it as a better option than other products on the market. Next, it can be a challenge to establish a brand when you don’t have control of packaging, which is common for dropshippers just starting their business.
EcommOps specializes in helping businesses establish a brand, and we encourage our clients to follow tips like the following:
- Define what makes your business unique. What do you offer that nobody else does? This could be anything from your product to your customer service.
- Choose a name and logo that represent your business well. These should be simple and easy to remember.
- Make sure all of your marketing materials are consistent with your branding strategy. This includes everything from your website to the way you answer the phone
Branding services is something we offer all of our clients, especially for businesses looking to begin scaling.
One of the key challenges of dropshipping is sourcing high-quality suppliers who can consistently deliver great products at competitive prices. This can be difficult, especially if you’re just starting out and don’t have any existing relationships with suppliers. You should always use a reputable dropshipping directory, like Oberlo Supply, take time to study review sites, like eKomi or Trustpilot, as well as reaching out to the supplier directly to see what experience they have working with dropshippers.
Even following these steps, it can be challenging for businesses to reliably source products. This is a key service that high-quality dropshipping agents will offer, including EcommOps.
While managing inventory is somewhat easy when order volume is low, it becomes more of a challenge as your product becomes more popular. A sudden spike in demand can overwhelm your supplier, and since traditional dropshipping stores don’t carry inventory, your customers may end up with long delays. The majority of customers that have a poor shipping experience on their first order with a brand will never return to that brand, so managing inventory is crucial for a dropshipping store.
Many dropshipping businesses will turn to dropshipping agents when managing inventory begins to become a challenge as order volume increases.
You need to find a reliable supplier that can ship your products quickly and efficiently while making sure that are appropriately packaged and labeled. If your supplier can consistently package your products and fulfill order promptly, customers will end up with a negative view of your brand, both in terms of product quality and shipping times. Order fulfillment is one of the most crucial aspects of dropshipping, and if your supplier can’t keep up now, they won’t have a chance when you decide to start scaling.
Order fulfillment is one of the primary reasons a business will look to a third-party fulfillment service, like EcommOps, and we can also help find a supplier that’s a better match for your order volume and product niche.
Providing Customer Support
Regardless of how streamlined and efficient your business is, your customers are going to need some kind of support. There will be the occasional product defect that needs refunding or replacing, there will be questions about the shipping status of orders, and returns will be made. Customer support is very time consuming, and many businesses struggle to provide excellent customer support while also running the rest of their business. Again, as with many of these issues, the problem of customer support compounds as your business scales and grows.
Minimum Order Fulfillment
Minimum order fulfillment is a common issue in dropshipping. Suppliers usually impose a minimum order requirement on their customers in order to qualify for wholesale pricing and other benefits. This can be a challenge for new businesses that may not have the budget to meet these minimum requirements. Of course, there are many suppliers that have no minimum order fulfillment, but you’ll find higher per-unit pricing with these suppliers.
If you have good relationships with certain suppliers, you may be able to convince them tow waive their minimum order fulfillment. You could also attempt to find a supplier that makes a similar product, which may make it easier for them to work with you as a dropshipper.
There’s no easy solution to this issue, aside from finding a winning product and increasing order volume. You may need to stair-step your way to better suppliers as your order volume grows, especially if you are starting a dropshipping business for the first time.
What Are the Benefits of Using a Dropshipping Agent?
When businesses start to feel the growing pains common to dropshipping, they’ll often look to dropshipping agents for help. A good dropshipping agent can provide a number of benefits to a growing business, like:
- Freeing up time to focus on marketing and selling their products while allowing the agent to focus on inventory management and shipping logistics
- Get businesses a better price-per-unit, increasing profit margins
- Helping businesses find more efficient shipping routes, saving time and money on shipping costs, further increasing profit margin
While the benefits of using a dropshipping agent are excellent, businesses will only find those benefits by partnering with the right agent. Let’s take a look at what to consider when choosing which dropshipping agent to partner with.
What Are the Things to Consider When Choosing a Dropshipping Company or Agent?
In order to get the benefits of a dropshipping company or agent, you need to find one that is both high-quality and a good fit for your business. Take a look at the following factors you need to consider when choosing a dropshipping company or agent for yourself:
What Products the Dropshipping Company Offers
Dropshipping agents don’t offer an unlimited selection of products. Most will operate with a specific industry niche, where they have taken the time to find the best suppliers for the particular niche they service. That means you need to consider what products a dropshipping agent offers and whether those products fit your business.
In particular, you’ll need to consider:
- Product selection: Offering too few products can be a red flag, which we’ll discuss below.
- Product quality: low-quality products will be detrimental to establishing your brand or trying to appropriately scale
- Product pricing: you need products that you can sell at enough of a profit margin that your business can survive and grow
Take time to make sure that a potential agent or company provides the right kinds of products at the best quality and at fair pricing.
Shipping Time and Fulfillment Costs
One of the primary services that a dropshipping agent or company will offer is fulfilling customer orders, including handling shipments. Of course, that doesn’t happen for free, so you can expect the costs of shipping and order fulfillment to be some of the largest costs you’ll be charged. You need to make sure that what an agent or company charges for these services are crystal clear, and you need to be sure that you avoid any hidden costs associated with these services.
Be sure to specifically ask about shipping times that are available and the shipping costs associated with each delivery speed. They may advertise great shipping costs, but it may not be at the speed you need. Low-quality agents may try to hide the true cost of shipping, so it’s worth it to take the time and flesh out exactly what the shipping costs (and their associated speeds) will be.
A return policy is a set of rules and guidelines that a dropshipping company or agent establishes to determine whether or not it will accept returns of merchandise from customers. The policy may also specify how and when customers can make returns, as well as the process for getting refunds or exchanges.
When you’re choosing a dropshipping company, it’s important to find one with a return policy that meets your needs. Consider the following factors:
- The types of products you sell: If you sell products that are prone to damage or have a short shelf life, you’ll need a dropshipper with a lenient return policy. On the other hand, if you sell durable goods that are unlikely to be damaged in shipping, you can afford to be more selective.
- Your target market: If your target market is highly price sensitive, they may be more likely to shop with retailers who offer free returns. On the other hand, if your target market is composed of savvy shoppers who are less concerned about price, they may be more willing to accept a no-returns policy in exchange for lower prices.
- The cost of shipping: You’ll need to make sure that a company or agent won’t charge high prices for return orders, especially if you operate in an industry were returns are common.
- The time it takes to process returns: If you sell seasonal goods or goods with a short shelf life, you’ll need a dropshipper who can process returns quickly so that you can restock your inventory in a timely manner.
How to Find the Best Dropshipping Company in China?
Now that you know what factors to consider, you’ll need help getting pointed in the right direction of quality dropshipping agents or companies.
Take Time to Research
If you are starting your search from scratch, you must take time to research and consider your options. It can take time to find a dropshipping agent that is both high-quality and a good fit for your business. Follow some common sense practices like:
- Using Google search to get a list of potential candidates
- Visit online forums (like Reddit) to see what agents or companies users recommend (or even get information directly from companies that frequent those forums)
- After you have a handful of options, look for reviews of those companies, or reach out and ask those companies for references
Taking time to research will help you get several options, which will help you get a good feel for what prices to expect and what services are common.
Look for a Physical Address and Contact Information
Reputable dropshipping companies and agents will not only have available reviews (which you may have already looked at), but they’ll have contact information and a physical address. If you can’t find this information, it’s a sign that they may be just starting out, or be a single-person operation that won’t be capable of appropriately providing the services you need.
If you can’t find contact information, that should be a good sign to move on. Legitimate dropshipping companies will have a clear online presence, a physical location you can look up, and a clear way to contact
Once you have several options that have been vetted as legitimate companies, you’ll be ready to start looking at service details. Overall cost will be the first item you look for, but you won’t find just a flat fee for service. In particular, you need to examine:
- Shipping and fulfilment costs
- Minimum order requirements
- Accepted payment methods
- Any additional fees
If their prices are out of your budget (or they seem to expensive for what they offer) move on to other options.
Check Shipping Times
You may see shipping times when you examine costs, but you need to take special care and attention to the kind of shipping speeds a potential dropshipping company or agent offers. As we have said, shipping times are one of the (if not the most) important factors to create a positive customer experience, which means your potential choice should be faster than your current shipping times. After all, why would you pay a third-party a premium for shipping times you can do yourself?
While you examine shipping times, make sure you note the cost, if you already haven’t done so. Your ideal shipping speed may be outside of your price range from a specific agent or company (but they may lead with the lowest possible shipping pricing). Just take your time in examining the shipping speeds and making sure they are a good fit for your business.
Customer service will be a huge part of your dropshipping business, and the need for good, consistent customer service grows exponentially as your scale your business and your order volume increases. If a dropshipping company or agent seems to offer poor customer service tools or has reviews talking about lackluster customer service, you should move on.
As a reminder, customer service will include handling:
- Order fulfillment when orders are placed
- Providing tracking information to customers
- Issuing refunds or replacements for damaged products
- Handling hassle-free returns for customers dissatisfied with products
- Restocking returned products
What Are the Red Flags When Choosing a Dropshipping Company?
It can be a challenge to find a dropshipping agent or company that’s the right fit, but picking out red flags is an easy way to narrow down the choices. If you come across any of these red flags while looking for an agent, immediately look to other options.
Lack of Communication
One of the biggest red flags when choosing a dropshipping company is a lack of communication. This can manifest itself in a number of ways, such as not responding to emails or phone calls, being difficult to get in touch with, or not providing clear and concise answers to questions. A lack of communication will make it a huge challenge to run or scale your business.
Why it’s a red flag:
A lack of communication is often a sign that the company is not well-organized or that they are not interested in providing good customer service. It can also be an indication that they are not confident in their product or that they have something to hide. Either way, it’s best to avoid doing business with companies that are difficult to communicate with.
What to do instead:
Look for companies that are easy to get in touch with and respond promptly to questions and concerns. Also, make sure that you understand an agent’s communication policy (if they say they’ll get back to you within X number of business days, allow that time frame before moving on).
Long Shipping Times
Better shipping times are supposed to be one of the primary benefits a dropshipping agent provides. Long shipping times create a terrible customer experience and can lead to them not buying from your brand again or even cancelling orders. Long shipping can ruin your brand, so it should be a deal-breaker for a potential agent.
Why it’s a red flag:
Long shipping times can be indicative of an inexperienced company or agent. They could just lack the industry experience needed to provide the most efficient shipping routes, or they might have more clients than they can handle, so the service they provide is subpar. If a company or agent struggles with long shipping times, they will likely struggle with other logistically intensive operations, like warehouse management, stocking inventory, and providing customer service.
What to do about it:
Choose dropshipping companies that have consistent, fast shipping times. If you have a potential agent with borderline shipping times, ask them what is preventing those times from being faster, and see if there’s a way to improve them.
Many dropshipping agents or companies will have hidden fees in their services. These are often fees that are buried in the fine print, or they could be fees for services you thought were included in their initial offer. Hidden fees can stack up quickly, and shady companies or agents will rely on you being too fatigued from shopping for third-party services to restart the shopping process.
Why they are a red flag:
Hidden fees are indicative of a dishonest business, so if they’re dishonest about the cost, you can expect them to be dishonest about other services they provide as well.
What to do about it:
Some common hidden fees include service fees, processing fees, and shipping fees. Make sure you have a full understanding of the entire cost of service before partnering with an agent or company.
Lack of Product Selection
It’s common for dropshipping agents and companies to operate within a specific niche or industry. They’ve likely taken the time to establish relationships with suppliers they can trust and reliably provide a great experience for all involved parties. However, if an agent or company has a very limited selection of products from which to choose, this is a red flag.
Why it’s a red flag:
Limited product selection can be a sign that the agent doesn’t have the inventory capacity to meet customer demand or to support your business as it scales. It will make it challenging to expand your brand and offer new products without choosing a new agent that can support a broader variety of products.
What to do instead:
Look for a dropshipping company with a wide selection of products so you can find the right product for your customers. Make sure a company has the capacity to support you while your scale, and that you’re not going to quickly outgrow the services they provide.
Poor Quality Products
If a supplier only offers low-quality products, this is a red flag. Be sure not to confuse this with the occasional fault product or with an agent’s or company’s reluctance to offer a product outside of their capacity.
Why it’s a red flag:
There are some obvious (and maybe not so obvious) reasons that providing poor quality products is a red flag. The first being, of course, that you need quality products to create a customer base and expand your brand. You won’t be able to grow your business if you don’t get repeat customers and good reviews. Poor quality products can be signs of other issues, like:
- an inability to execute quality control
- an inability or unwillingness to find better suppliers that are a better fit for your industry (this can be a problem if a particular agent is getting a kickback from their suppliers)
- Inexperience operating as a dropshipping agent, which will spell trouble for other parts of the supply chain, like order fulfillment, warehouse management, and customer service
What to do about it:
Choose an agent or company that is able to consistently provide high-quality products, even if the profit margin isn’t as large as you’d like. You can use those products to build your brand and position your company to scale as order your order volume increases.
Why You Should Choose Ecommops for Your Dropshipping Company
EcommOps offers excellent benefits that are tough to find with other dropshipping companies or agents. Some of our best benefits include:
- Same-day order fulfillment
- 5-8 days international shipping time
- Physical presence in Shenzen, China
- Access to the best shipping routes
- Returns management
We can also help to manage your entire supply chain, not just order fulfillment. That means we can also help:
- Find a supplier
- Supervise QA in factories
- Consult regarding branding and packaging
- Warehouse inventory tracking and management
EcommOps is a true one-stop-shop for your entire ecommerce business. We’re a great fit for established businesses with consistent order volume that are looking to sustainably scale their business. Fill out this form, and we’ll be in touch!
1. What is a shipping fulfillment center?
A shipping fulfillment center is a type of warehouse that specializes in storing and shipping products for online businesses. These centers are often equipped with state-of-the-art packaging and shipping equipment, which allows them to fulfill orders quickly and efficiently. Generally, dropshippers will partner with shipping fulfillment centers if they sell a large variety of products or if they have consistently high order volume.
2. Do you need warehouse fulfillment services?
Whether or not you need warehouse fulfillment services will depend on a variety of factors. You’ll need to consider things like:
- Where is your supplier?: If you use a domestic supplier and have a domestic warehouse, you may not need a fulfillment service. If you have a foreign supplier, like a factory in China, but sell domestically, a warehouse fulfillment service may be a great fit.
- How high is your order volume?: If you run a startup with low order volume (or sell only a few kinds of products), your business may not be ready to use a warehouse fulfillment service. However, if you have high order volume or sell a large variety of products, you may benefit from outsourcing the fulfillment step to a third party.
- Where is your target customer base?: Do you only sell to customers in a specific geographic region? Then you may not need the services of a warehouse fulfillment service (though this will depend on your specific kind of business and business needs). If you have a worldwide customer base, a warehouse fulfillment service may be an enormous asset to your operations.
3. What is a dropshipping fulfillment agent?
A dropshipping fulfillment agent is a company (or sometimes an individual) that provides warehousing and shipping services for online retailers.
Dropshipping fulfillment agents offer a number of services, including:
- Receiving and storing inventory
- Picking and packing orders
- Shipping orders
- Tracking inventory levels
- Providing customer service
Generally, the more a dropshipping business grows, the more likely they will want to partner with a dropshipping fulfillment agent.
4. Is EcommOps a dropshipping fulfillment agent?
Yes! We regularly partner with businesses to help them:
- to receive customer orders
- to fulfill customer orders
- to manage order shipment
- to manage returns
However, EcommOps isn’t just a dropshipping fulfillment agent or company. We have the capacity to help businesses manage their entire supply chain, all the way from finding a supplier to providing packaging that is perfect for solidifying a brand.
5. Does EcommOps work with any business?
We are very selective with the businesses we partner with. In general, we expect businesses to have an order volume of 50 orders per day (and per product) . That means we won’t be a good match for startups or smaller businesses. However, we encourage any interested business to fill out our form, and we’ll determine whether our services will be a good match for your business.