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Avoid Mistakes to Choose the Best Dropshipping Supplier for Business

by mariabrooks
dropshipping suppliers

International trade can be a great way to expand your business. However, it is important to select the right partners and understand the legal and financial implications. It’s not only who you choose to be your global dropshipping supplier that matters. But, how you manage your relationship and what legal obligations you have, as well as how to transfer money around the world in a cost-effective way.

These Are the Three Areas That Require Special Attention.

Manufacturing and shipping

There are many benefits to sourcing products from overseas suppliers, including lower manufacturing costs and more suppliers and manufacturers. There are potential for lower quality products and longer shipping times. This is becoming more problematic with Covid-19.

Use a logistics partner

You have the option to work with a logistics partner if you are shipping products overseas. They will take care of all the paperwork, customs clearance and tax implications, as well as making sure that your products get from A-B.

Although this option is more efficient and easy, you will pay a premium. The average logistics spend could be between 10% and 20% of your sales.

Partner with other companies

Partnering with multiple companies is another option. This requires your time and attention. For example, you could arrange FedEx express shipping. This requires you to navigate two platforms and keep track of two sets invoices. Additional specialist services are available to assist you in preparing relevant documents and obtaining special licenses.

Do it yourself

There’s also the DIY option, where you partner up with freight companies but do all the paperwork and licences. You can also pick up your shipments at the port, rather than have them delivered to you. This option may seem to be the most cost-effective on paper but when you consider the time required and the consequences of making mistakes, it is not always the best.

When choosing a global dropshipping supplier, there are ethical considerations. Although it might be more cost-effective to produce your products overseas than in the United States, how do you determine if there is a tradeoff for fair labor practices and factory conditions? Is the supplier or manufacturer in accord with your values? Offshore companies can be more difficult to find than those made in the United States.

A local manufacturing or supply agent can help you find ethical dropshipping suppliers. They may even be able to visit your facility to inspect the conditions.

You should ensure that you thoroughly investigate the quality and customer service of your products. Dropshipping is a model where the supplier delivers directly to the customer. This can cause a negative experience that could damage your brand.

Solid legal agreements are essential for avoiding any problems that might arise during manufacturing or shipping, and determining who is responsible if anything goes wrong.

Tax implications

Make sure to keep up-to-date with all tax payments that you might need when you choose a global supplier. Certain industries, like alcohol, are subject to higher taxes. These may differ from one country to the next. It is important to understand the tax implications for each country you send your shipment to.

Check if you have to pay GST if you import goods into Australia. Or a waiver. You might also be eligible for other concessions, such as free trading agreements Australia has made with other countries that could reduce your import costs.

Contracts such as import/export, distribution and distribution agreements are crucial. Make sure to seek financial and legal advice from registered and qualified professionals in these areas.


Volatility in currency rates and fluctuations can have a negative impact on your business when you import or export goods. Access to foreign currency is essential. You also need to be able transfer money quickly, securely, and without any extra charges.

Many overseas suppliers won’t accept invoices in Australian dollars if you are a small business. With a Collections account, you can invoice suppliers and pay them in local currencies.

If you sell on eCommerce platforms like Amazon and Alibaba, or use a website payment portal, adding local currency accounts will allow you to receive funds faster. Customers will find it more appealing as they no longer need to worry about foreign currency conversions and can see the actual cost.

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