Dropship Sourcing Safety

Dropship sourcing safety in today’s wholesale supplier minefield

by Dave Cottrell

Dropship sourcing safety is something to be very concerned about if you want to make a profit without getting ripped off.  There are lots of things to think about in today’s world wide wholesale supplier minefield.

One of the most important things of all to be concerned about when you are sourcing a good wholesale dropship supplier is if they are selling genuine products or ripoffs and clones.  Is that Canon DSLR really a Canon, or is it a cheap fake?  What about that Neiman Marcus jacket.  Are you sure it’s not a counterfeit?

dropship sourcing safety Counterfeit jewelry

Counterfeit jewelry (Photo credit: Wikipedia)

Selling fakes is a real concern in today’s market.  There are many Chinese manufacturers that have zero ethics about these things, and make a fortune supplying a world wide market that is hungry for the prestige associated with high end brand name products.  There is a huge market for look-alike fakes, often so well cloned that they are difficult to tell from the real thing.

If you sell such merchandise from most developed countries, such as Canada, the USA and the European Union, you could get kicked off eBay, lose your Paypal account, and even worse, get arrested and end up in jail.  It is a serious offense to sell fake, brand name merchandise.

Here are a couple of examples of folks who went to jail for trafficking in counterfeit goods.

  1. Counterfeit Goods Organization Convicted
  2. Two Sentenced for Trafficking in Counterfeit Goods 

It’s not worth it!  The question is, how can you be sure the products are real?

dropship sourcing safety

counterfeit cosmetics (Photo credit: Wikipedia)

 

Here are some important points to consider to make sure you’re following a path of dropship sourcing safety, before you begin your dropshipping business.

  1. Use portals that specialize in connecting wholesale buyers with wholesale suppliers.  You can pay a lot of money to join a number of these that have specifically done the homework for dropshippers to make sure the suppliers are reliable and safe.  You might want to do this eventually, but you will easily pay $300 or more for their services.  The reality is that $300 is a lot cheaper than getting seriously ripped off or going to jail!  WorldwideBrands.com is a good example of one of these paid services.Check prices.  If you are determined to dropship well known brand name products, compare the prices being offered from a supplier to prices elsewhere.   If they are really cheap, there is a very good chance they are counterfeit.   It doesn’t matter how good their quality is (you can find some really high quality fakes).  Remember that if they are fakes, they will get you in trouble, guaranteed.
    1. There are free portals, such as AliBaba.com  where you can make contact with suppliers, check what others are saying about suppliers, how many people have rated them, and so on.  Finding out what other people say about a supplier is one of the better ways to stay safe.  If a supplier has a good ranking from a lot of people, you should not have any big problems.
    2. Another portal I have had good results with is AidandTrade.com.  Remember, this is a PORTAL for many companies.  You still have to do your due diligence and thoroughly research any company you want to work with.
  2. Be careful not to sell products that infringe on someone’s trademark rights.  I used to sell USB memory sticks that looked like a Zippo lighter.  I didn’t use the name in my ads, and sold a ton of them for a very nice profit.  But then they contacted me and told me I had to stop selling the product.  It turned out that they have trademarked the SHAPE of their lighters, and it is illegal to sell anything with that shape anywhere their trademark is recognized.
  3. A very important consideration in dropship sourcing safety is the means of payment accepted by the company.  I prefer to use Paypal only, and so far have done just that.  Paypal is pretty strict about who can use them for accepting payments, and will quickly freeze the account of anyone who is even getting complaints.  Deciding only to work with companies that use Paypal may limit the number or companies you can work with, but it will also go a very long way to making sure you don’t get ripped off.
    1. Some companies use an escrow service.  The way it works is, the payment you send is held by a third party escrow company until the goods are delivered.  This is also a very safe way to do business.
    2. Avoid using Western Union.  There have just been far too many fraud cases linked to them.
    3. Avoid using bank transfers, unless it is to a well known and reputable escrow company.
  4. Start with my “secret” sources.  These are companies that I have used successfully, have a very good relationship with, and who have always treated me with the greatest respect and help.  I have never before published these sources, so you are thje first ones I have ever told.  Feel special?   ;-)
    1. Chinavasion.com  This is my favourite company, by far.  Everything I have ever bought or sold via dropship from them has been excellent in quality.  They have been most courteous and have done everything possible to make every transaction a good experience.  Their handling of warranty claims, which will always happen if you have any kind of volume, has been excellent.  All of my customers, all around the world,  have been very happy.
    2. EpathChina.com  This is another company that has given me excellent service.  Their English is not always correct, and the site can be difficult to navigate at times, but when you get used to it, they are a good, reliable and safe source of products for dropshipping.
    3. AidandTrade.com  I will mention this portal again, as I they work a little differently from other portals.  You can make dropship orders directly through this portal.  It is considerably trickier to navigate than the first two, and you MUST check out each company whose products you want to sell, separately.  I have never had a problem with a company I have used via this portal.  BUT!!!  That does NOT mean that I recommend any of them.  YOU must do your own due diligence.  Again, I have ONLY worked with companies that have a record and that use Paypal.  No company can use Paypal for any length of time unless they are legitimate.

One thing that I am sure you must have noticed by now is that all the companies I list are based in China.  Folks, this is the new reality.  The USA, once THE greatest manufacturing company in the world, has sold out and gone to China or Mexico for the vast majority of their manufacturing.

Chinese manufacturers, in turn, have been given all this technology, and now are flooding the market with very inexpensive goods.  Some would say I should have no part of this, but I am too much of a pragmatist to listen.  The facts are, if I am going to make any money in the dropshipping business, I had better get on the bus, which right now is China, or get left by the side of the road.

One more thing:  A couple of years ago, I bought a Blackberry smartphone from our local phone mart.  The owner is a friend of mine.  When I opened up the phone, guess what I discovered?  It, and the battery in it, were both made in China.  I could have bought the almost identical unbranded phone from China for a fraction of the price.

I did buy a branded Blackberry holster for my phone from one of my Chinese suppliers for $4.99.  I took it to my friend at the phone mart to show him, and he told me it was a genuine Blackberry holster.  When I told him where I got it, he said, “Where do you think our holsters come from?”  The difference is, his were $39.99 each, about eight times the price.  In every other way, they were identical.  The fact is, it is very likely I bought my holster from the very manufacturer that the phone company was buying from.  The Chinese manufacturers have no problem doing whatever they need to do to make a profit, including bypassing the middle man.  (This is also why you can buy excellent quality eye-glasses from Zenni Optical for a tenth of the price you would pay at the local optometrist.)

If you are going to sell in the world wide market, you will be competing with a lot of folks selling products that are made in China.  Unless you can find products to dropship that are totally unique and only available from one western manufacturer, you will have to dropship products from Chinese suppliers.  That is the reality of the global marketplace.  That is the reality of the online world.

Dropship sourcing safety is not something to be careless about.  Dropshipping wisely takes time and patience, but it does have a good pay-off.  Be careful out there in cyberspace, and above all, be profitable!

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3 comments

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  • Dropshipping has been a topic that I have been curious about for quite a long time, but to be honest have never trusted to use for myself, although I note people using Amazon and Ebay. I think like anything else, you should always use the motto “buyer beware” and really check everything out.

    You have given some great resources Dave, I’m just wondering if there are other types of resources that people could use to check into the legalities of dropshippers etc. Would you know?

    Thanks for a timely article and it has given me food for thought
    Diane(Blogneta) recently posted…Pointers That Will Increase Your Income From HomeMy Profile

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    • Hi Diane. There are not very many resources available, which is why people who have done the hard searching can charge so much.

      There’s no BBB for this kind of thing. The best resource is other happy wholesale customers.
      Dave Cottrell recently posted…Ask for the Referral!My Profile

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