Today, there are many ways to make money online. A lot of new online businesses opt for dropshipping wherein they partner with a dropshipping supplier who manufactures and ships the products to their customers. You no longer have to stock up inventory and have a warehouse when operating your online business. No wonder that a lot of e-commerce businesses partner with a dropship supplier.
On the other hand, wholesale suppliers can also benefit from the dropshipping trend by offering this service to wholesale vendors or customers. You can read our post on the benefits of offering drop shipping. In this post, we will discuss the benefits of offering white-label dropshipping which is an entire concept on its own.
Whitelabel Dropshipping Defined
When you offer Whitelabel dropshipping to wholesale vendors, you will ship the product to the customer’s address wherein the package will either have a generic return address or the vendor’s brand logo and address. The latter wherein you label the packages with the branding and company address of the vendor is often termed as “Private Label Shipping”. As a wholesale supplier, the customers will not know that your business was the one who manufactured, supplied and shipped the products to them. You will be anonymous in the business transaction between the customer and the wholesale vendor.
Hammer Global explained how White labeling works, “When an order has been placed, and the shipping method was selected, the wholesaler will fulfill the order and place a generic packing slip in the shipping box. A white label, with a generic return address that does not have a name or logo, will be included in the package. On the packing slip, there will be specific instructions for returns. This way, the customer receives the package, but does not know which wholesale supplier shipped it.”
Dropship Businesses For Sale further clarified the concept of white labeling, “Just like the drop shipping business model, white labeling is just a different type of online business model that can allow you to take someone else’s existing product or business solution, put your name/brand on it, and sell their services to your customers under your own existing brand.”
Once you’ve decided to offer dropshipping service for your wholesale vendors, there are seven things that you need to know about white-label dropshipping.
What You Need To Know About Whitelabel Dropshipping
1. Partner with a Reliable Wholesale Vendor
Whitelabel Dropshipping has a lot of advantages such as having an expanded market and more customers. For those who have just started their online business, you will struggle on getting more customers and marketing your products in the early stages. Once you have a reliable wholesale vendor, they will be the ones to sell the products to their customers resulting in more sales.
Your job will mainly focus on manufacturing, supplying and shipping the product to the vendor’s customers. On the other hand, the merchant will be displaying, promoting and selling your products to their customers.
2. You will remain anonymous in the business transaction
By offering white-label dropshipping, you will be shipping the packages directly to the customers who ordered from the vendor. In that sense, the customer will not know about your company. You will be the anonymous third party in the transaction between the wholesale vendor and the customer.
3. You will have to carry the wholesale vendor’s brand in the product label or packaging design
White labeling means that your products will be sold and shipped as a product or brand of the wholesale vendor.
You need to ask the vendor for their brand design that you will utilize for the packaging and product design. You will also be including company details in the design such as company name and logo. In the packing slip, you need to include the company address, phone number, and email along with the company name and logo as the header.
Finalize the product labels or packaging design with the wholesale vendor.
4. You will have to maintain constant communication with the wholesale vendor
You will need to remain in constant communication with the merchant in order to avoid delays and issues. The merchant will basically give you a heads up when customers place an order for your product. That’s why you need to have a dedicated line, email or live chat with these wholesale vendors so that you can timely ship the products to the customers.
5. Partner with an International Shipping Carrier
As you may partner with several wholesale vendors, it would be wise to find and partner with a reliable shipping carrier who ships internationally. We made a post on 9 Things Dropshippers need to know about international shipping.
Choose a shipping carrier that fits your requirements and has wide coverage, fast turnaround time, insurance, and tracking tools. Check out their policies so that you can see which carrier is more responsive and reliable in case of returns, shipping delays, cancellations, and exchanges. Make sure that the shipping carrier offers outstanding customer service that can offer timely and quality assistance in cases problems come up as inevitably there would.
6. Furnish a Sales or Contract Agreement with the Vendor
Make sure that you have terms and conditions, and policies in place before doing any business with wholesale merchants. You need to have several meetings with the wholesale vendor so that you will meet on the same business grounds. Make sure that both of you agree to the terms and conditions.
Check out this sample sales and purchase contract: China Purchase and Sales Contract/ Agreement. Depending on your business needs, this sample contract serves as a guide only. It’s better to meet with your lawyer, accountant and business consultant to draft and polish the contract.
7. Arrange for Payment
As you will be transacting with the wholesale vendor, it should be clear how and when the vendor will send payment for every received order. Both you and the merchant must agree with the payment methods.
In the terms and conditions, you need to be able to specify when you expect to get paid, and the payment methods for every order.
With these seven basic tips, you will be able to analyze how white-label dropshipping works, and how you can maximize this model in your online business.