Finding a dropshipping supplier: a step-by-step guide for small businesses

Published Friday 29 August 2025

Table of Contents

• What is dropshipping?
• Dropshipping suppliers vs dropshipping companies
• Key qualities to look for in dropshipping suppliers
• Red flags when choosing dropshipping suppliers
• How to find dropshipping suppliers
• Tips for contacting and negotiating with dropshipping suppliers
• Start with trial periods
• Dropshipping supplier costs and pricing models
• Wholesale dropshipping in the US
• How to choose a dropshipping supplier
• Support your dropshipping business with Xero
• FAQs on finding dropshipping suppliers

Key takeaways

• Evaluate potential suppliers by ordering product samples, checking shipping times, assessing communication responsiveness, and reviewing feedback from other sellers to ensure they meet your quality and reliability standards.
• Avoid suppliers who show red flags such as poor communication, unwillingness to provide samples, consistently negative reviews, high upfront fees, or unclear return policies that could damage your business reputation.
• Utilize multiple sourcing strategies including supplier directories like SaleHoo and Spocket, direct manufacturer outreach, marketplace research, and trade show networking to find the most suitable partners for your specific products.
• Start with small test orders and trial periods before committing to long-term partnerships, allowing you to verify shipping speed, product quality, and communication reliability while minimizing risk.

What is dropshipping?

Dropshipping is a business model where you sell products without holding inventory. The supplier handles storage, packaging, and shipping directly to your customers.

Key benefits of dropshipping

Finding reliable suppliers is crucial for success. Poor supplier choices can lead to delayed shipments, quality issues, and damaged customer relationships. Some key dropshipping benefits include:

• Low startup costs: no upfront inventory investment
• Reduced risk: test products without bulk purchases
• Location flexibility: run your business from anywhere

Dropshipping suppliers vs dropshipping companies

Dropshipping suppliers are businesses that stock products and ship them directly to your customers when orders come in. Dropshipping companies are platforms that connect you to multiple suppliers and product catalogs in one place.

How suppliers work

• Product sourcing: they maintain inventory you can sell
• Order fulfillment: they process and ship customer orders
• Quality control: they handle packaging and delivery standards

How supplier platforms work

• Supplier vetting: they screen suppliers for reliability
• Product catalogs: they provide searchable product databases
• Integration tools: they connect to your online store

Relationships between sellers and suppliers

Every dropshipping business differs slightly, but the relationship between sellers and suppliers who dropship will look something like this:

1. A customer purchases your product
2. You receive an order confirmation and this is sent to the supplier
3. The supplier procures, packages, and ships the product to the customer
4. The customer receives the product

Dropshipping suppliers and companies exist all over the world. Bear in mind that if you choose a dropshipping supplier from another country, it could extend the delivery time for customers.

Key qualities to look for in dropshipping suppliers

Choosing the right supplier is key to your success. A great partner ensures happy customers, while a poor one can lead to delays and disappointment. Before you commit, take time to assess potential suppliers.

Look for these qualities in a dropshipping supplier:

• Product quality: Order samples to check the quality for yourself. High-quality products lead to fewer returns and better reviews.
• Reliable shipping: Ask about their average shipping times and tracking options. Fast and dependable shipping is crucial for customer satisfaction.
• Good communication: A responsive supplier who answers your questions clearly is a valuable partner. See how quickly they respond to your initial inquiries.
• Fair pricing: Compare their product costs and any associated fees. Ensure their pricing allows you to make a reasonable profit.
• Positive reviews: Look for feedback from other sellers. Consistent positive reviews are a good sign of a trustworthy supplier.

Red flags when choosing dropshipping suppliers

While searching for the perfect partner, it's just as important to know what to avoid. Spotting red flags early can save you from future headaches, lost sales, and a damaged reputation.

Be cautious if a supplier shows any of these warning signs:

• Poor communication: Vague answers, slow response times, or a lack of a clear contact person can signal problems ahead.
• No sample products: A supplier who is unwilling to provide samples may not be confident in their product quality.
• Negative reviews: A pattern of bad reviews from other sellers is a clear warning to stay away.
• High upfront fees: Legitimate suppliers make money when you make a sale. Be wary of large, ongoing fees with no clear benefit.
• Unclear return policy: If you can't find a clear and fair return policy, your customers won't have one either.

How to find dropshipping suppliers

Finding dropshipping suppliers takes multiple approaches. Follow these proven steps to discover reliable partners:

1. Use supplier directories

Supplier directories list pre-vetted wholesalers and dropshipping companies, making it easier to compare options. These platforms often include reviews, product categories, and search filters so you can quickly narrow down suppliers.

• Benefits: Verified suppliers, easy comparison tools
• Examples: SaleHoo, Spocket, Worldwide Brands
• Best for: Beginners who want a safe, curated starting point

2. Reach out directly to manufacturers

If you already know which products you want to sell, contacting manufacturers is one of the most direct approaches. Many manufacturers either dropship themselves or can connect you with authorized distributors.

• Benefits: Lowest prices, stronger supplier relationships
• How to: Search “[product] manufacturer dropshipping” to find options
• Best for: Established sellers with proven product ideas

3. Research marketplaces

Online marketplaces like Amazon, eBay, or Etsy can help you identify potential suppliers. Look for sellers offering competitive prices and then reach out to ask if they offer dropshipping arrangements.

• Method: Search marketplaces, sort by lowest price, and review seller ratings
• Strategy: Contact low-price or niche sellers about dropshipping partnerships
• Best for: Finding trending or niche products with proven demand

4. Attend trade shows and network

Trade shows remain one of the best ways to build long-term supplier relationships. Meeting suppliers face-to-face helps you evaluate product quality and establish trust from the beginning.

• Benefits: Build stronger, long-term partnerships
• How to: Attend industry events, prepare questions, and bring business cards
• Best for: Business owners looking to scale and diversify product sourcing

Reverse engineer competitors

Another smart strategy is to study competitors who already dropship. By ordering from them, you can investigate their packaging and return addresses to uncover their suppliers

• Method: Place test orders and research the fulfilment details
• Strategy: Use competitor intelligence to identify and connect directly with suppliers
• Best for: Businesses doing market research and seeking a competitive edge

Tips for contacting and negotiating with dropshipping suppliers

Successful supplier negotiations require preparation and clear communication. Follow these strategies:

Research thoroughly

Before committing to a supplier, take time to research their background. Check verified reviews, confirm business credentials, and look closely at shipping times, product quality, and customer feedback.

Doing this early helps you avoid unreliable partners and gives you a stronger position when it comes to negotiating prices or terms.

Communicate expectations clearly

Set clear expectations with suppliers from the start. Define your quality standards, outline shipping requirements, and share details like order volumes, seasonal demand, or customer service needs.

Open communication reduces the chance of misunderstandings and ensures the supplier can meet your business goals.

Build win-win relationships

Strong supplier partnerships are built on mutual benefit. Take time to understand their business model and profit needs, then support them with consistent orders, prompt payments, and even referrals.

When suppliers know you value their success, they’re more likely to offer you better pricing, priority service, and access to exclusive products.

Start with trial periods

Instead of committing to large orders right away, begin with a trial run. Small test orders let you evaluate shipping speed, product quality, and communication before scaling up.

This approach lowers your risk and helps prove the value of the partnership on both sides.

Dropshipping supplier costs and pricing models

Understanding how dropshipping suppliers charge for their services helps you manage your budget and price your products effectively. While pricing structures vary, most fall into a few common models.

Here are the typical costs you might encounter:

• Per-order fees: Some suppliers charge a small fee for each order they process and ship for you. This is common when working directly with a supplier.
• Monthly or annual subscriptions: Many supplier directories and platforms charge a recurring fee for access to their list of vetted suppliers and integration tools.
• Wholesale price: This is the base cost of the product that you pay to the supplier. Your profit is the difference between this price and what you charge your customer, minus any fees.

When calculating your costs, remember to account for the product price, supplier fees, and any platform subscriptions to ensure your business remains profitable.

Wholesale dropshipping in the US

Wholesalers buy products from the manufacturers in bulk, at a cheaper price than retail. Often, wholesalers will stock a huge catalog of products from different manufacturers.

Wholesale dropshipping is where you work directly with the wholesaler instead of going through a directory or dropshipping company. Many wholesalers will require a bulk purchase of stock up front, which isn't always the most cost-effective solution for sellers. Especially if you’re trialing a new product in your store – you can end up with a bunch of stock and no buyers.

Wholesale dropshipping can be a great solution once you’ve established a customer base and a selection of popular products. By working with a wholesaler, you could get a better deal on stock by purchasing in bulk. And you still won’'t need to worry about storage – the wholesaler will stock, pack, and ship for you.

How to choose a dropshipping supplier

Choosing the right dropshipping supplier determines your business success. Quality suppliers ensure customer satisfaction, while poor choices lead to negative reviews and lost sales.

Your next steps:

1. Evaluate suppliers using the criteria outlined above
2. Start with small test orders to verify reliability
3. Track performance metrics like shipping times and return rates
4. Build relationships with your best-performing suppliers

Support your dropshipping business with Xero

As your dropshipping business grows, you need reliable financial management to track supplier costs, profit margins, and cash flow. Xero accounting software integrates with major ecommerce platforms, so you can easily manage your business finances.

Try Xero for free to see how automated bookkeeping can support your dropshipping business.

FAQs on finding dropshipping suppliers

Still have questions about finding the right dropshipping supplier? Here are answers to some common concerns.

How do I choose the best dropshipping supplier for my business?

The 'best' supplier depends on your specific needs. Focus on finding a partner who offers quality products in your niche, provides reliable shipping, communicates well, and has a pricing structure that works for your business model. It's often better to choose a reliable supplier over the cheapest one.

What's a reasonable budget to start dropshipping?

You can start a dropshipping business with a relatively small budget, but it's wise to have funds for more than just your ecommerce platform subscription. Plan to budget for setting up your store, ordering product samples, and initial marketing efforts to attract your first customers.

Can I use multiple dropshipping suppliers?

Yes, many dropshippers work with multiple suppliers. This can be a great way to offer a wider variety of products or have a backup if one supplier has stock issues. Just be sure you can manage the logistics of tracking orders from different sources.

Is dropshipping worth it?

You can set up a dropshipping business quickly and cost-effectively. Once you have an ecommerce store and a reliable supplier, you’re free to start selling.

That’s not to say dropshipping is easy. There are lots of moving parts to manage – and from a distance when you’re working with an overseas supplier.

Find out more in What is dropshipping and How to dropship

Is dropshipping possible in the US?

Yes, dropshipping is possible in the US. But it's important to be aware of the legal requirements for starting an online business.

Additionally, be sure to check that your chosen products can be legally sold in the US, especially if they're coming from overseas suppliers. When pricing your products, make sure you're complying with local tax laws.

The global dropshipping market is expected to double between 2022 and 2026, which means there's plenty of opportunity to sell online. But you’ll need to research diligently in order to stay competitive against other online businesses.

Also, make sure you can find reliable suppliers who are closer to home so that shipping isn't an issue.