This is a general guide to discuss the top suppliers that are out there for Drop Shipping.
There are so many suppliers but these are the main ones that I use for eBay Drop Shipping. For sellers who are new to Drop Shipping, the process is now more about retail arbitrage and making that profit margin off top sellers and items that are already popular, rather than finding new suppliers and trying to get ahead that way.
The main suppliers that I use are Walmart, Target, Amazon, Sears, Kmart, and Academy Sports. The breakdown of eBay Drop Shipping looks like this, 40% of items from Walmart, 5-10% of items from Amazon, 20% from Kmart and Sears, 10% from Academy Sports and the rest from a mix of Home Depot and other random suppliers.
Historically speaking, over the past five years, Walmart has been a pain in the ass. In the past, Walmart took a very long time to deliver items and to provide tracking numbers, which slowed down the processing of payments.
In the past six months or so, Walmart has improved. Walmart has lowered the cost of shipping and is now shipping items much faster. More and more people are now using Walmart as a top supplier for their own eBay Drop Shipping stores which is making them a bit less competitive but it is still possible to keep that 10% profit margin with Walmart as a supplier.
Amazon is a rough one. Amazon as a Drop Shipping supplier is solid when it comes to delivery, Amazon Prime makes that even easier and you can have multiple Prime accounts. Really, this whole Drop Shipping industry started with Amazon and it moved to eBay so tons and tons of sellers use Amazon as a supplier. Because of this you really only end up with a 2 to 3% profit margin when you use Amazon, but it’s easy, so you have to look at it from all the angles.
Kmart and Sears are great suppliers for Drop Shipping. They both have fast shipping, you can get discounted gift cards to use for your purchases so you can save 8-9% with the gift cards and in some cases almost double your profit margin. One of the main drawbacks with Kmart and Sears is that they can be difficult to process returns, especially when gift cards were used to make the initial purchase. So again, you can see that there are advantages and disadvantages to all of the suppliers.
Academy Sports is one of my favorite suppliers. The profit margins for items from Academy Sports is usually around 12% so that’s a great mark up. Gift cards are usually available so you can save an additional 6-12% with these. They don’t have free shipping but they do have fixed shipping rates so that’s a good thing. Academy Sports offers lots of seasonal items as well and these tend to be top sellers. In fact, you can check the homepages for Academy Sports and Walmart to see what seasonal items are in high demand and these are usually guaranteed ways to keep top selling items featured in your eBay Drop Shipping store.
Home Depot also offers a lot of gift cards so with Home Depot you can often get up to 22% profit margins. Another good thing about Home Depot is there is not a lot of competition. You’ll start to find as you set up your Drop Shipping store on eBay and begin to use different suppliers that the suppliers with more challenges tend to give you a higher profit margin, whereas the suppliers with fewer challenges tend to give you a lower profit margin. So, you just have to keep playing the game of finding out which suppliers work best for you and which items sell best for you.
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