It's tempting, I know. Using retail suppliers seems like a quick way to get started in the dropshipping business. Websites like Walmart, Target, and Home Depot offer a diverse range of products you can list on your Amazon or eBay storefront. It's a low-hanging fruit, especially for those who are new to the realm of online selling. However, this short-term tactic has long-term repercussions.
Breaking Terms of Service
Let's get straight to the point: using retail suppliers for dropshipping is against the terms of service for both Amazon and eBay. If you're caught sourcing from these retail giants, you'll receive more than just a slap on the wrist. You're risking an inevitable suspension of your seller account.
Even if you manage to slip under the radar initially, the algorithms and monitoring tools these platforms use are becoming increasingly sophisticated. Sooner or later, you'll get caught, and all your hard work will go down the drain.
The Benefits of Wholesale Suppliers
Contrastingly, wholesale suppliers are not only within the terms of service of both these platforms, but they also offer numerous benefits for a sustainable business. Here’s why:
1. Long-Term Sustainability
Wholesale suppliers often have arrangements that foster long-term relationships. You can negotiate rates, get bulk discounts, and even have priority during high-demand periods.
2. Reduced Risk of Account Suspension
Since sourcing from wholesale suppliers is within the terms of service for both Amazon and eBay, you don't have to worry about waking up to an email telling you that your seller account has been suspended.
3. Less Competition
Surprisingly, fewer people source from wholesale suppliers for their dropshipping businesses. It may be because of the perception it's tougher to get started with them and they're "more advanced". However, this is NOT the case. They're easy to sign up for (if you know the right ones to apply to and know what to say) and this reduced competition can be your advantage, giving you access to products that have less competition, thereby increasing your potential margins.
4. A Wide Range of Customizable Options
Many wholesale suppliers allow for white-labeling and customization, giving you a chance to build a brand rather than just being another reseller or dropshipper. This capability adds another layer to your business and can be an excellent tool for customer retention.....AND most importantly cooperates with amazon and ebay's terms of service.
The Only Exception
There is only one scenario where I'd advise using retail suppliers, and that is if you are brand new to dropshipping on Amazon or eBay. You might use retail suppliers as a 'training ground' of sorts to understand how dropshipping works. However, even then, it's essential to use unrecognizable retail suppliers to minimize the risk of account suspension. And remember, this should be a temporary strategy to get your feet wet, not a long-term business model.
Final Thoughts
Don't compromise the future of your business for the sake of convenience. Yes, retail suppliers are tempting and might offer you a quick start, but the risks are too high, and the odds are stacked against you. On the flip side, while wholesale suppliers may require a bit more effort and investment upfront, they are the key to building a stable, profitable, and low-risk business on Amazon and eBay.
If you'd like to learn more about how you can get started dropshipping the right way so you can not only make money but build a long term sustainable dropshipping business that will pay you well into the future, there's no better place than my Amazon Dropship Pro Course