Approaching Distributers/Manufacturers About Drop Shipping Their Products

[softwareDev]

I am starting an ecommerce business which will sell leather goods. I don’t want to hold a lot of inventory so I would like to drop ship some of the products which my site will sell. I am looking for advice on how to approach distributes/manufactures of leather goods about drop shipping their products.

1. How is it best to approach distributors? Is there a standard way this is done?

2. How do I go about forming agreements with distributors? Is there a standard way payments are handled? For example: A seller purchases an item from my site, I request the distributor ship the item to the seller. At what point to do I pay the distributor? Does the distributor bill me? Is there a standard way this is done so everyone is assured they will get their money/product?

3. What type of margins should I expect with this strategy? I would expect them to mark the price up more then with large order, but I would still need a low enough price to make some money.

Any advice/ideas on this subject would be helpful.

Thanks,
Karlis

[MyITGuy]

1. How is it best to approach distributors? Is there a standard way this is done?
Simply ask them if they offer to dropship.



2. How do I go about forming agreements with distributors? Is there a standard way payments are handled? For example: A seller purchases an item from my site, I request the distributor ship the item to the seller. At what point to do I pay the distributor? Does the distributor bill me? Is there a standard way this is done so everyone is assured they will get their money/product?
Depends on the vendor/distributor terms. Some will want you to pay at the time the order is placed (I.E. They may keep a credit card on file for this purpose), others may extend a credit line with NET terms.


3. What type of margins should I expect with this strategy? I would expect them to mark the price up more then with large order, but I would still need a low enough price to make some money.
Only you can determine this by defining your business plan further based on the pricing your vendors give you versus what your competitors are selling the same products for.

[Pack-Secure]

Any advice/ideas on this subject would be helpful.


Make sure to have something to show them, storefront, website etc. They want to know that you are there and are serious about your business.

Make sure to register with D&B, also most will want trade references and bank references.

Some drop shippers will do the drop ship on your credit card if you have no business references, this will help you establish a reference for the next drop shipper you approach.

[billbenson]

Most of this has already been said. If you build a website / store front and walk up to them with a large block of orders, you have a good shot, assuming you are not tripping over other distributors. Product knowledge is very helpful. You could also approach sub distributors at first and then move up the ladder.

The first thing I would try to find out is if they drop ship. If they don't then go on to the next distributor or manufacturer. Ask them what they generally require and if you could possibly qualify if you do X.

[softwareDev]

Thanks for pointing me in the right direction!