How To Dropship From Multiple Suppliers Seamlessly
Marina Vasilyeva, Client Manager in Multi-Programming Solutions • 8 min read
Establishing trustworthy partnerships is a key challenge entrepreneurs face running an online store. At the beginning of their e-commerce path, collaborating with one supplier is quite a widespread practice until they reach the target audience and build a stable selling process. But with increased traffic and possibilities to go global, plenty of retailers create the entire supplying network, which includes a few vendors with a broad product assortment.
Our guide will define how to start a dropshipping business with multiple suppliers, figure out if it can benefit the company scaling, and what challenges such schemes hide inside. Keep on reading to discover new opportunities for online shop development.
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Key dropshipping statistics 2023
For those entrepreneurs, who want to learn some facts about the retailing business model without keeping an inventory, we suggest getting familiar with vital statistical data. It will help you better understand modern trends and ensure this type of e-commerce is still profit-making and waiting for new participants.
The global dropshipping market is constantly growing and promises to reach $102.6 billion by 2025. Indeed, you can make your own contribution to this amount. If you still didn’t build an online website, hurry up to join 24 million e-commerce stores worldwide. The main secret of an eye-catching online page is the ability to interest visitors within the first 15 seconds and suggest appetite bonus offerings, including free shipping.
Dropshippers usually receive from 10% to 30% of the margin, depending on the site popularity, product assortment, quality, and the level of customer service. One of the main secrets of growing revenue is creating a dedicated account on social media. Research shows that even one profile can gain an extra 32% income.
Around 82% of retailers complain that finding a trusted supplier is the greatest challenge in building a thriving business. But many of them have created lasting and productive relationships with a partner and even more - several of them. Can you dropship from multiple suppliers too? It’s pretty achievable! We describe all the details in the following chapters.
What is dropshipping with multiple suppliers?
Retailing stuff from several third-party vendors is practically the same as working with a single one. Customers order goods at an online shop and pay real money ahead for their purchases. Then you distribute the fulfillment to one of the appropriate merchants you partner with. The chosen trader provides the rest of the tasks, including stuff packaging and shipping.
The main advantage of a multiple-supplier strategy is the possibility of selecting a vendor who will finish the sales process most beneficially for each case (cheaper, faster, etc.). You can do it manually or with the help of dedicated software like Dropza. It can streamline the routine tasks of accepting and redirecting orders for fulfillment. Thus, you save time, predict accidental errors, optimize business flows, and make them work even when you sleep.
Multiple sourcing in supply chain management is a crucial option for online retailers going through the business transformation process and growing sales volumes. Adding one more vendor can widen a product assortment and attract new clients to the digital store. Moreover, having several partners on a safety network, you can cope with out-of-stock situations and select a trader who will deal with an order cost-effectively.
Can you use multiple suppliers on Shopify? Yes, you may choose a few reliable sellers and retail goods through your digital stores, making additional income without any inventory or warehousing spending.
What does a dropshipping supplier do?
Online retailers cooperate with third-party merchants because the last ones make plenty of operations during the sales process. Thus, they are responsible for stocking, picking-and-packing goods and shipping them to the end customer. Besides, deliveries can be local or even international. And dropshipping suppliers for Amazon or another marketplace will handle all the dedicated tasks and synchronize data about product availability.
Retailers don’t spend time and extra money buying and storing inventory. Vendors take all the risks for possible overstocking and the formation of illiquid. You may also not worry about the transportation of the sold stuff (of course, if you know what factors should be considered while choosing suppliers). Instead, you can focus on the marketing campaign, establishing multichannel sales, assortment diversification, and researching customers' behavior to improve their engagement.
Back to the article's main topic, let’s find out if you can have multiple suppliers for a dropshipping store and do you need to search for a “fresh” partner already having a reliable one in mind.
Choose between single or multiple suppliers
There are many reasons for a single supplier model. Entrepreneurs usually work with one seller when they are on the first step of a successful e-commerce career. For example, this scheme allows startupers to get to the bottom, learn how to manage their workflows, and figure out their target customer. If the business begins to run stable and brings constant revenue, dropshippers think of increasing brand popularity, expanding to the global market, and gaining more sales. Then, a multiple supplier selection process becomes obvious and helps solve such issues:
- Find the suitable wholesale price. Depending on the number of items another shop buys from yours’, you can get discounts from vendors for retailing stuff in bulk. Here, you should pay attention to the wholesale price and shipping costs. If several sellers suggest the same price, but one of them delivers orders for free, this option will be more beneficial and bring a higher margin.
- Get extra coverage. This is a crucial difference between multiple vs. single suppliers. When selling extremely popular items that quickly go out of stock, you can always rely on one of the business partners who still has some reserve at the warehouse. Thus, you decrease the risks of canceling orders and losing clients.
- Expand product ranges. Imagine you merch shoes and want to add several popular brands to your website categories. Finding a single dropshipping supplier for Shopify to satisfy all needs in the assortment may be challenging. But, by adding a few merchants to the list of your partners, you’ll be able to meet clients’ wishes and cover a more comprehensive market part.
- Operate within several niches. Suppose you trade only cloth but find that home decor is one of the popular online requests among internet users. How to choose the right supplier for a business in this case? You’ll hardly find an all-in-one solution. Still, you may search for various sellers specialized in wall art, pillows, and decorative rugs. All vendors will be focused on providing the best quality for their unique stuff, while you’ll be able to suggest excellent offerings to clients and cover several niches.
- Ensure fast delivery even for dozens of simultaneous purchases. When you ideally promote an internet shop, sales can reach dozens or even hundreds of orders per day. But if all of them are fulfilled by one vendor, you risk delaying shipping. On the other hand, you can cope with such disadvantages of a single supplier by distributing tasks between different merchants. You’ll comply with the delivery terms and won’t disappoint buyers.
Working with several online traders can be advantageous for e-commerce entrepreneurs in various ways. And finding a trustworthy one comes in first place on your to-do list. Learn the primary criteria for selecting business partners that help internet stores thrive.
How do I choose multiple suppliers?
First, start with a simple Google search and examine merchants nearest to your location. Secondly, you may contact the manufacturers and ask for the approved vendors (in case you already know what brand you will resell). Or, as other options, you can select vendors for your online marketplace by browsing a supplier directory or a Shopify website.
But what are the three main components of choosing a supplier? Here are some tips on how to make the right choice.
Local or global?
It doesn’t matter whether you search for one or several merchants. The local one will be more beneficial for online shop development. Let us explain why. Establishing communication with regional vendors is easier and faster. You get a shorter lead time for shipping. You receive guarantees that their stuff is non-toxic and meet quality standards compared to those produced in China. And as a final argument for this vital step in the supplier selection process, you’ll set comprehensible return and refund policies.
Brands: known or unknown?
There is a common opinion that recognizable brands are sold better. However, that doesn’t mean you should bet on popular stuff that highly saturates the market. Sometimes new brands are an opportunity to stand out from the crowd, raise market competitiveness, follow the latest trend, and emphasize your identity.
If you sell print on demand stuff, you may develop your own name and promote merch you are passionate about. Many clients enjoy personalized items. This is how unknown brands may become your guide to the prosperous e-commerce world.
Prices: how to trade effectively?
Choosing between several merchants with identical products, discuss the possible discounts, wholesale prices, and shipping costs. You’ll probably find a vendor who will suggest more attractive conditions that will help you earn higher revenue from deals.
However, you should be aware that Chinese worldwide dropshipping suppliers often suggest better wholesale prices, but the goods' quality and shipping time often leave much to be desired.
Advantages and disadvantages of working with multiple suppliers
Showcasing the pros and cons of working with several traders will help you better understand if this model is suitable for your e-commerce company. Let’s start with the benefits:
- Rapid building of a customer base and business scaling.
- Establishing a stable supply chain.
- Preventing out-of-stock situations.
- Increasing profit with better wholesale prices.
- Diversifying product range and occupying several niches.
- Improving customers' experience with fast and high-quality service.
As for the disadvantages of multiple suppliers, the main one is consumers’ confusion when they receive several different packages per order from your site. Most clients aren’t familiar with the dropshipping model. So the best decision for keeping users satisfied is a notification that they’ll receive several boxes at different times.
The other disadvantage of a few suppliers' strategies is more complicated inventory and order management. It can be hard to do all the routine tasks manually, so a wise decision is to use particular tools, like the ShipStation dropshipping app, which many sellers integrate into their digital shops. Automated software helps businesses run efficiently and smoothly. So if the supplier uses one for workflow optimization, you both can reach the maximum performance.
Partnering with a few trustworthy vendors simultaneously, you can ensure product availability even for the most trendy items, quickly fulfill orders, and predict out-of-stock issues. Dropshipping with multiple suppliers is a wise decision for those entrepreneurs who are aimed at constant scaling, generating more income, and developing the best practices for serving clients.
Although increasing the list of business partners complicates inventory management and tracking, you may always rely on dedicated automation software to streamline daily operations and synchronize data. As a result, you’ll learn to manage your online store more effectively and free up resources for new valuable insights.
Understanding the advantages and disadvantages of having multiple suppliers helps dropshippers to determine how they can improve sales, attract new customers and overcome challenges in process management.