Want to get approved with the BEST Dropshipping Suppliers?
First, picking up the phone and calling potential business partners for the first time is scary!
Second, all the marketing and business jargon is a bit tricky, especially for those who are totally new to business.
And finally, there's just so many 'what if's'!
So to help handle a lot of the confusion about contacting dropshipping suppliers, I've gathered up the seven common questions I hear and I'm answering them in today’s episode of the eCommerce Lifestyle Podcast!
As always, if you have any questions and suggestions, please feel free to leave a comment below. Don’t forget to share this with someone who needs to hear it.
What's Covered in This Episode:
Links From This Episode:
What's up everybody? Anton Kraly here from ecommercelifestyle.com and welcome back to the podcast. So for today, we're going to talk about, obviously what the title of the podcast says, which is Tips For Getting Approved With Dropshipping Suppliers and not just any suppliers, but the ones you actually want to work with. Now, I also wanted to change things up for this episode, and rather than just quickly list out a whole bunch of random tips, I decided I would ask you guys what you wanted to know about getting approved with suppliers, which by the way, I did that on Instagram stories on the Drop Ship Lifestyle account. So if you're not following that account yet, and you're on your phone, just go to Instagram, search for dropshiplifestyle, follow it and I do stories like this all the time, but that is where these questions and these ideas came from.
So I think we have seven of them total, and I will start at the top of the list. And I'll just say, before we get into this, this will definitely help people that are just looking to get into drop shipping, or even people that might have had some success maybe drop shipping with an arbitrage model or drop shipping from China, but that are looking to do this legit and work with domestic suppliers for wherever you are in the world.
So with that being said, let's kick it off. First question is, how does one get a list of reliable suppliers? All right, first thing I'll say is great question, understand why you're asking it, but just know that you're never going to find the best suppliers by finding a list online. And I'm telling you this as somebody that actually has their own supplier directory that I give to members of Drop Ship Lifestyle, my coaching program that has over 8,000 suppliers and over 300 niches that took a team of, I think we had almost a dozen virtual assistants working on it for almost a year, and even that is nowhere near as good as what you can find on your own.
So when it comes to lists of suppliers, few tips I'll give you. First off, don't even look for one. Second off, when you find them, don't pay for access because the companies online that charge you to get access to their group of products or collection of products, they are middlemen, you don't have good pricing terms, it's not worth your time or money or efforts, and that's not a way to succeed in drop shipping. So to give you something you can actually use, how can you get a list of quality suppliers? What you should do is just go on google.com and search for your niche, your industry, whatever it is you currently sell or want to sell, and then try to find online stores that are online only and look for what brands they sell for. Now, obviously not every site you find is going to be a drop shipping site. For example, you might go to their contact page or about page. You might see they have a showroom or a warehouse or a retail store. And if they do, then I don't recommend sourcing suppliers or brands from their website because they'll most likely be able to get approved with suppliers and brands that you can't get approved with.
The ones you're looking for are the ones that do not have that physical location and when you find them, you want to find the brands that they sell for and you want to reach out to those brands directly to get approved to sell their stuff. That is how drop shipping works. In my opinion, that's the only way you can make money with this business model for the longterm. And by the way, if you want to know exactly how to do this, see screen shares, get my scripts that we use when we contact suppliers for approval, be sure to go to dropshipwebinar.com after this is over, because I have a free training there for you. I'll link it in the description as well, but that's dropshipwebinar.com.
Okay. Second question I pulled from Instagram is, how can I ask suppliers to drop ship for me? Okay, little counter-intuitive here, but when you are reaching out to suppliers to get approved to sell their stuff, you don't even want to use the term drop ship. It's funny. I did a YouTube video, it might've been two or three years ago and it was called stop drop shipping, which definitely is clickbait. Fair enough. But you don't want to use the term drop ship or drop shipping when you're reaching out to suppliers because just by default, if you say that like ... you call them, "Hey, can I drop ship your stuff?" They're not going to think of it as something worth their time or it'll be easier for them just to write you off. Even though of course that's the business model, unfortunately, there are a lot of shady people out there, especially when it comes to three week lead times, two month lead times, people not shipping stuff, that's what the whole drop shipping from China model, which is a topic for another podcast.
But what we do is when we reach out, we don't say, "Hey, can you drop ship for us?" Instead we say, "Hi, I'm calling from antonsdesks.com, and we really love your products and this is why," to give them the reasons. And then we say, "We would love to speak to the person in charge of opening accounts for online retailers." So we use the terms online retailer and internet retailer interchangeably, but that's our approach for getting approved with suppliers. You don't just call and don't just say, "Hey, can I drop ship your stuff?" That's not going to go well. If you're a member or anybody listening to this is a member of Drop Ship Lifestyle, go into module four of the Drop Ship Blueprint, and that's where I give you those exact scripts for what to say if you call or what to type or copy and paste if you email.
Third question, and by the way, thanks for these questions guys. I really do appreciate it. It's crazy to me that every time I post something on Instagram stories asking for feedback, we get 100 responses. So the ones that I polled for this episode, if it's not your question directly, a lot of them were similar so I tried to pick ones that were asked the most in one way or another. So the third question we will cover, the third tip I can give you for getting approved with drop shipping suppliers, the question was, one of my suppliers is asking for bank references. Should I give them to them? No. So whenever, pretty much any company you're going to work with, any supplier or vendor is asking for personal references or business references or bank references, it's because they think you're trying to open up accounts with credit with them basically. So let's just say hypothetically, I was the supplier and you reached out to me to sell my products, I said okay. If I sent you a form to fill out and it had bank references, the reason I would want that is so I can check with the bank to make sure you're credit worthy, to make sure you pay your bills on time to make sure it would be okay for me to basically ship on my account for you on credit.
So let's just say you sold $30,000 worth of product in a month, then if you had credit terms and I owned the company that stored the products, basically I would ship them all and maybe give you terms like 30 days net or 60 days net, and what that would mean is you would have to pay me 30 days after the product was billed or 60 days after the product was billed. And the only reason suppliers would need those bank references from you is if they think that you are applying for credit terms. Now, we do not go with credit terms. What you want to do is get pre-pay terms, and what that means is when you're filling out the forms and getting approved, you're going to give the supplier or suppliers, either a credit card number or debit card number that they can bill when you submit orders to them.
So think of this scenario again where I'm the supplier, you're the seller. If I approved you to sell my products and I had your credit card authorization on file, what that would mean is if somebody bought on your store and then you emailed me later that day to have me ship the product, then I would know you emailed me, wholesale cost is whatever, 200 bucks, credit card's on file, that's when you get charged. So pre-pay doesn't mean you're paying for products in advance. It means you're not running on credit terms and if you are approved for pre-pay, which is super easy to do because they don't ship anything until you're billed, then you don't have to worry about bank references. So we literally just ... I don't have a pen here. We literally just cross that section out when we're filling out new supplier application forms.
Next question is, in Australia suppliers don't like online only stores. What can I say to get approved? So fair question, and I do think this has changed over the years, but when it comes to different countries or regions where e-commerce maybe isn't as big as it is in the States, or it's something that brands and suppliers are still a little weary of, then it's your job to basically sell yourself even more. And when I say sell yourself, I mean sell what you're going to do to give them a better business. So again, if you want the exact scripts, everything that's in the Drop Ship Blueprint, just go to dropshipwebinar.com after this podcast. But basically what you want to do when you're talking to them is not just say, again, "Hey, can I sell your stuff online?" Instead, you want to talk about what you like about their products.
This is something I teach and something I do. Do your research in advance, so you actually have a reason to want to sell their products. Talk about who your customer base is, how you're planning on advertising, what you're going to do to market their products and what you need to do is just make it a no-brainer for them. Because if they just say, "No, I don't want to work with you," it's not because they believe that you're going to bring them a whole bunch more business, it's because they think it's not worth their time. So it's your job to make them realize it is worth their time, because it definitely is. And we have plenty of students in Australia and all around the world that have done just that. Also side note, for anybody listening that is thinking, "Oh, am I going to have this problem?" In the Drop Ship Lifestyle members area, if you click on bonus content, there's actually a course called Doing Business Abroad.
I would highly recommend you go through that course because it will show you how you can kind of adjust and modify the blueprint to work in either countries with a smaller size population or where maybe they're not as comfortable yet working with online retailers. But you should have no problems, you should be able to push through it all. Again, we've got in Australia alone, hundreds of success stories. So you'll be good.
The fifth question that came in said, do you know of any suppliers in Costa Rica? Short answer is no, never sold there. What I'll say though, I mentioned earlier, you don't want a supplier list. So for you, you don't want a supplier list of suppliers in Costa Rica. What you would want is to do your research, find those online only stores, see who they sell for and get approved with them. But with that being said, I don't know how many people live in Costa Rica. Let's see, we'll do a real-time search. Costa Rica population. I'm guessing it's not that big, even though it's an awesome place. Yeah, so just under 5 million from 2018. So with a population that size, what I would recommend for you or anybody else that lives in a smaller country, don't do business there. So you could find a place with a bigger population and do business there. So maybe from Costa Rica, you want to do business in Central America, or maybe you want to do business in the US instead. We have people in Drop Ship Lifestyle from all over the world that are doing just that and that are doing it successfully.
Next question says, I am located in Canada, but I'm thinking of also selling in the US. Thoughts on that? Yeah, do both. So no reason to limit yourself. When you're doing business, if you're going to form your business in Canada, obviously there's nothing wrong with that. If you're going to have all your banking in Canada, nothing wrong with that, but I would 100% get approved with both suppliers, AKA brands in Canada and in the US and I would run my ads in North America. I would do Canada and the US at least, so everything could ship there and you can get more sales and have a bigger market. Nothing wrong with that at all. Don't don't limit yourself there.
Next question. This is the final one we'll do for today guys, and by the way, I hope you're getting value from these. If you are, if you like this kind of Q&A style of podcast, let me know by leaving a review. Go to Apple Podcasts, if that's what you use. I will link up how to leave a review in the description and in your review, just say love the Q&A podcast or something. Give it five stars. Say you like these if you do, and I'll keep asking questions on Instagram and I'll keep answering them on podcasts if you like this format. But let me know in the Apple Podcast review section.
With that being said, guys, let's go to the final question. Question number seven. Do I need an EIN and sales tax certificate before I contact suppliers? Good question. Let me break this down a little bit so everybody knows what they're referring to. EIN stands for employer identification number. This is something that's free to get online on the irs.gov website. If you want to get one, which you should, do that right away, just because basically what it is is, you could think of it as a social security number for your business. So that way all your tax forms and whatnot, they're connected to your EIN number rather than your social. So I would recommend getting that right away. When you're going to go to the IRS website, just go on Google and type in apply for an EIN number online. Make sure you go to the official IRS website. If you search for that, you're probably going to see a bunch of ads for companies that say they'll do it for you for 100 bucks and they just want your money. Again, it takes five minutes to do online. So that I would recommend getting right away. Now, the sales tax certificate. Just so everyone's aware, that's also referred to as a resale certificate. What that is is basically giving you the ability to charge and pay sales tax for whatever state you get a sales tax certificate in.
Typically what you want to do is get the sales tax certificate in the state where your business is located. So for me, when I first started my businesses, I was located in New York. I was living in New York, so I didn't get one right away, started to do business, started to make money, then I got one and I got it for New York and all of my orders that shipped to New York when my business was located there, I had to collect and pay sales tax on. So that's the purpose of this. Now, some states and this is specific for US. I don't know how it works in other countries because I haven't done business there, but in the US some states have sales tax, some don't. So if your business is in a state where you don't need to collect it, you don't need one and basically the way it works is there's minimum threshold that needs to be met in order for you to be basically having to collect and pay sales tax. It varies state by state with what's called a nexus.
This podcast will be twice as long if I cover it all now. But just know, I'll tell you from my personal experience, what I did. I had an EIN number right away. I got a sales tax certificate once I started making money and you need to get one for or the state in which your business is located. Now with the nexus, how that works, that's once you start doing pretty large volumes in other states. Most states it's over $100,000 in annual sales, then you would need one there as well. Again, maybe I'll do a full episode on that, but for now, just know that you do have the option of not getting one right away and still getting approved with suppliers. Maybe not all of them, but you know what? If you're in this for the longterm, if you know you're all in on your business, get the EIN, apply for the sales tax certificate, it doesn't take long at all, and you'll feel much more confident and that way if any suppliers do ask you for it, you'll have it ready to go, email them a copy, you'll get approved, and you could be well on your way to making money with legitimate suppliers, AKA brands.
So that's it for this episode, guys. I'm going to sign off. As always, I hope you got value. I appreciate you, and I will talk to you in the next episode of the eCommerce Lifestyle Podcast. Final reminder though, if you're new and you're like, "This sounds awesome. I want more. I want to know how to pick a niche, how to find these actual suppliers, how to get approved, how to build a store, how to get traffic," then be sure to go to dropshipwebinar.com for that free training I told you about earlier. I will link that up in the description. Thank you, and I'll talk to you in the next one. Bye.