If you’re looking to start a dropshipping business (or you’re already running one), you’ll be familiar with the money making formula that most people use.
It looks something like this: Find cheap wholesale products from Chinese suppliers and sell them for massive profits to customers in the US, Europe, or Australasia.
That business model still works today. BUT, with more and more people using this formula we’re seeing more and more Chinese products flood the market.
That’s not necessarily a bad thing. However, it means it’s getting harder to differentiate your business from all the others, especially if you’re relying on crowded marketplaces like eBay and Amazon.
One way that you can differentiate is by using suppliers that are based in the United States.
You don’t even have to be living in the US for this to be a good option. If you have a strong customer base in America, or you’re looking to break into the US market, then using local dropshippers makes a lot of sense.
I know, I know, the lure of cheap Chinese suppliers you find on Alibaba or Aliexpress is strong, but you’re going to want to hear me out.
There are many benefits to working with dropshippers in the United States, and I’m even going to share some of the best American suppliers with you at the bottom of this post.
Let’s get into it.
Why Dropship From the US?
There are a lot of great product suppliers and manufacturers in the United States, many of which offer dropshipping services.
You’d hardly know it, though, as most dropshipping advocates push the idea of buying cheap products from Asia and selling them in Western markets at significant mark-ups.
Let’s look at some of the benefits of using American dropshipping suppliers for your online store.
We all know how important shipping is when you’re buying something online. Shipping is one of the main downsides of using dropshippers in China. It can take days and sometimes weeks for a customer to receive their package. This alone can leave customers dissatisfied and make them unlikely to buy from you again. Working with US dropshippers ensures:
Fast Shipping for US Customers
Shipping typically takes between 1-3 days within the US. So your customer could buy something from your store and have it delivered the next day. A satisfied customer is your best marketing tool as it can lead to repeat business and word of mouth advertising for your store.
A Reliable Tracking System
Customers today expect to be able to track and trace their package in the post. US courier companies like UPS, FedEx, and DHL all provide reliable, comprehensive tracking systems, which you can share with your customers.
A Wide Range of Shipping Options
US courier services offer a selection of shipping options such as next-day, second-day, or third-day delivery. In some cases they even provide a same-day delivery service. Generally, the faster the delivery, the higher the price. But at least it gives your customers the option to choose, depending on how urgently they need their package.
Firstly, let’s address the elephant in the room. American dropshipping suppliers are generally going to be more expensive than Asian suppliers. It’s true. The cost of labor, materials, rent and other factors all contribute to higher product costs. But those added costs come with product benefits that will allow you to charge your customers higher prices. And with customers becoming more conscious of fair trade and quality, they’re more than happy to pay those prices. Let’s look at some of the product benefits of using US dropshipping suppliers:
US manufacturers have a reputation for quality products. Whereas products you might source from China, Taiwan, or Vietnam generally don’t have the same reputation. Why does this matter? People are prepared to pay for quality. You can charge more for quality. Selling products from China is often a race to the bottom in terms of price competition.
“American-Made” Stamp of Approval
You get to stamp “American-made” on your products (if, in fact, the products are made in America). This is a seal of approval for a lot of customers, especially patriotic Americans. It’s a powerful selling point and marketing tool that sets you apart from most sellers on eBay and Amazon. Again, people are happy to pay more for American-made products.
Higher Retail Prices
As mentioned above, you can get away with charging higher prices for American-made products. This negates the main attraction of using Chinese suppliers. While you pay more for American-made, you can quite comfortably pass those costs onto your customers so your profit margins remain the same, or perhaps even higher than they would with Asia-made products.
Better Customer Satisfaction
You can build a loyal customer base by using US dropshipping suppliers. Just think of the combined benefits outlined above. Faster shipping, more shipping options, quality products, the feel-good factor of buying American-made – they all add up to a highly satisfied customer that is more likely to return to your store again and again.
Easier to Make Sales
This is simply because there are fewer people taking the American-made route in eCommerce as most sellers are sourcing products from Chinese suppliers. When you have a point of difference and can stand by the quality of your products, it becomes easier to make sales, especially if you have effective marketing. There’s a reason why people buy Levi’s jeans over other, cheaper brands, even if the company’s “Made in the USA” claims are somewhat dubious. The story of wearing American-made goods – the story that Levi’s customers tell themselves – is often more powerful than the product itself.
What to Look for In a US Dropshipper
Just because a dropshipper is based in the US, doesn’t necessarily mean they’re a great supplier. You want to follow the same process that you would when vetting any supplier. After all, your supplier is one of your most important business partners. You want to choose the right one.
The main things you should look for in a supplier are:
Trust and Reliability
You need to know that your supplier can be trusted. How do you do this? Well, you could use a SaleHoo’s supplier directory which has more than 8000 vetted suppliers, including US dropshippers. You can also check websites like TrustPilot, or ask the supplier for references. If the supplier has social media pages you can check those for reviews.
Even better, make the effort to visit the supplier and meet them face to face. That’s a great way to see if you feel comfortable trusting them.
Friendliness and Communication
Trusting your supplier is one thing, but you also want to be sure that they’re easy to do business with. Are they friendly and cooperative, or cold and difficult?
It’s possible that you’ll be working with a supplier for many years, so you want to make sure they’re someone you get on with.
Jump on the phone and have a chat, or visit their warehouse or factory and meet in person. You can also tell a lot by the tone of their emails.
Shipping Costs and Information
Fast shipping is one of the main benefits of using US dropshipping suppliers so it’s important that your supplier is up to speed.
You want to make sure they can provide all of the expected shipping options such as same-day and overnight delivery so that you can pass these benefits on to your customers.
Be sure to ask for the shipping costs and any other information as you don’t want to have to charge more than you have to for shipping.
If your supplier is also the product manufacturer, you should ask about production capacity. This relates to how much product they can make at a time.
This is important as if you business takes off and experiences a surge in demand, you want to know that your supplier can meet that demand in a timely manner, otherwise they could be responsible for slowing the growth of your business.
It’s normal for suppliers to charge a dropshipping fee, but you need to ask what it is up front so that there are no surprises. It’s also worth asking if they have any other charges that you should know about.
If you get a list of obscure fees back, it’s probably best to avoid that supplier as they’ll be shaving money off your profit margins.
Warranty and Returns Policies
Be sure to get all of the relevant product warranty, guarantee and returns information from the supplier and go through it with a fine-toothed comb. If things go wrong with their products, you want the supplier to bear as much of the responsibility as possible.