Drop shipping is a simple enough concept. You make arrangements with a wholesale supplier, manufacturer or distributor to sell their products direct online, as opposed to having an inventory of products in your physical location. You can offer these products on your own website, or via online auctions like eBay, or through a sellers’ market like Amazon.
When a customer orders the product, you pay the supplier the discounted price to ship it directly to the customer. There usually is no indication that the product came from another company, and many offer branding options to further create the illusion that the product came from your business (such as customized packing slips).
Customer Price – (Wholesale Cost + Expenses) = Your Profit
Drop shipping offers a unique opportunity for Canadian entrepreneurs to start a business without investing in product inventory. You won’t have to worry about being stuck with products that don’t sell, shipping, etc. You’ll also be able to have US suppliers ship to US customers if you like, without worrying about cross-border red tape.
The drop shipping business model can be permanent, temporary, or hybridized. It’s utilized in both small and large businesses because it’s cost-effective, versatile and easy. For example, Namaste recently announced an exclusive drop-shipping supply agreement with Ample Organics Inc. Ample Organics is Canada’s leading seed-to-sale software platform, currently used by the majority of Canadian licensed producers of medical cannabis. Namaste will connect its cannabis hardware and accessory platform via API integration with Ample Organics’ system. This will allow each of Ample Organics’ customers to purchase a large variety of devices and accessories.
Drop Shipping Risks
There are only two major risks involved in drop shipping:
- Your reputation will ride on the reliability of your drop ship supplier.
- Your supplier may sell out of a product while you’re still taking orders.
Both of these concerns can be addressed by carefully selecting your suppliers. The larger drop shipping networks prevent these issues with integrated, automatic inventory updates and screening of individual suppliers. In less automated situations, consider having more than one supplier of the same product as backup in case an item is sold out. The best way to test reliability is to first place an order for yourself.
You will have to keep your wits about you, however. For example, some shady companies may offer products that should only be available from authorized dealers (such as Nikon Canada merchandise). If you resell these items, you could land in hot water and your customers could find themselves with a useless service agreement. When in doubt, contact the manufacturer or check their website. Using certified drop shippers through reputable networks like World Wide Brands eliminates this issue.
Getting Started with Drop Shipping in Canada
First, you’ll need to pinpoint a niche or two to focus on. If you need some help with that, please read 10 Hot Product Niches to Sell or Drop Ship Online in Canada.
If you’d like to set up your own website to sell drop shipped items, there are eCommerce hosting and shopping cart solutions that accommodate the arrangement, such as Shopify Canada. If you use WordPress, there are WooCommerce plug-ins specifically designed for drop shipping, like WooCommerce DropShippers. If you plan to sell on eBay, you’ll find some drop shipping companies are authorized eBay dealers with integrated features to make auction selling easier, such as Wholesale2B. For additional guidance, please read The Best eCommerce Software Platforms for Drop Shipping.
Fees are intended to cover the shipping service and/or to give you access to wholesale prices on a large number of products (which are usually only available to volume purchasers). Charging a fee is not a red flag. However, there are good services available and there are scams, as is the case with any business arrangement. Again, going through reputable drop shipper networks will greatly reduce these risks.
Finding Wholesale Drop Shipping Products
You have millions of products to choose from. If you need some guidance, please read How to Choose the Best Products to Drop Ship Online in Canada.
The next big challenge in drop shipping can be finding suppliers. Finding manufacturers isn’t a big problem, but most won’t deal with individual sellers and I don’t know of any that will drop ship direct to individual customers. They operate on volume purchases from companies placing large orders. Drop shipping is more at the distributor level. That said, if you can prove that you’ve consistently sold thousands of their “widgets” some manufacturers may consider a special arrangement. At that point, however, you should consider having your own inventory of best-selling products.
It’s important to note that you don’t need to find Canadian dropshippers, you just need to find wholesale suppliers that will ship to Canada (or you could choose to not sell to Canadians at all). The beauty of the Internet is that the World is your marketplace.
You may partner with individual companies that have existing drop shipping programs, or approach any company to ask if they’d be willing to drop ship. You could also gain access to a drop shipping directory with thousands of products from a wide range of companies. Several of the choices below offer a variety of ways to access products from multiple suppliers, it’s just a matter of deciding which structure suits you best.
A Note on Drop Shipping Product Pricing
Chances are, you’re going to pay a higher price than you would if you were ordering a thousand of each item. There are people who don’t understand the concept who will post dire warnings about prices not being truly wholesale, but that’s their inexperience talking. Naturally, you want a large enough discount to allow for a reasonable profit margin and some research is involved to ensure it. However, you can’t expect to get the same wholesale price as volume purchasers when you’re buying the product one at a time. Plus, they’re doing the investment, storage, and shipping for you. You’ll learn where to set your expectations as you go along. If you find a product is selling really well, you can explore stocking the product yourself and pursue volume wholesale prices.
Drop Shipping Networks & Wholesale Suppliers that Serve Canadian Sellers
Wholesale2B – Wholesale2B has everything you need and is very easy to use. The majority of our drop shippers choose to work with Wholesale2B, in fact. They have several plans that facilitate selling over 1.5 million products on eBay, Amazon, Google, or through a website (your own or through a turnkey website). They ship to most of the World, including Canada, the US and the UK. Wholesale2B guarantees “the lowest dropshipping prices,” so you can be assured of profit margins large enough to make your business successful. Take them for a test drive with the free trial.
World Wide Brands – Lifetime access to upwards of 10,000 genuine wholesale companies and drop shippers (no monthly fees). They have an industry-leading wholesaler qualification process that ensures your business is connected to reputable wholesalers with REAL factory-direct wholesale prices. The same certification process protects you from wholesale scams, fake suppliers and middlemen. Their product analysis tools are priceless. Members also enjoy dozens of drop shipping training videos, market research, mobile access, and a discussion forum. They were recently ranked as a Top 50 Business Opportunity by Home Business Magazine. The Better Business Bureau (BBB) gives World Wide Brands an A+.
SaleHoo Canada – Thousands of verified drop shippers and wholesale suppliers, along with direct shipping manufacturers. You have the option of using their web store to start selling instantly. They also have a community for anyone who sells online. You’ll find the free trial reassuring as you research almost 2 million products.
SellerBot – This is an all-in-one, fully automated option. You’ll start right out of the gate with a fully automated drop shipping business that includes a domain name, eCommerce store with professionally-designed templates, hosting, thousands of suppliers and marketplaces, automated product importer/updater/pricer, payment processing, an email marketing course and email customer support. Most of the suppliers and marketplaces ship worldwide. What makes this option popular is you can go from nothing to owning an online store in a couple of days, with very little effort or knowledge on your part.
Inventory Source – Gain free access to this directory of wholesale drop shippers. They also offer tools for automating eCommerce processes for sellers and online merchants, including drop ship inventory automation from over 75 wholesale distributors. Inventory Source provides dropship eCommerce integration with over 25 of the leading eCommerce platforms, such as BigCommerce and Shopify Canada, along with marketplaces like Newegg Canada, Amazon and Etsy. They are BBB members in good standing.
Light In The Box Wholesale Goods – Wide range of drop shipped and wholesale products from China. They’re the first Chinese company to launch an IPO on the NY Stock Exchange. LightInTheBox ranked “number one in terms of revenue generated from customers outside of China among all China-based retail websites that source products from third-party manufacturers,” according to iResearch.
WARNING: Dropship Design and Aid and Trade Global Dropshippers Directory have proven to be unreliable and unethical drop shipping companies/directories. We suggest both sellers and affiliate marketers stay far away from them.
Individual Companies Offering Drop Shipping for Their Products
There are individual companies that offer drop shipping to Canadian sellers. Some have active public programs, while others may consider it if you contact them directly. The Canadian Trade Index is a great place to start if you want to contact companies about drop shipping their products.
Following are a few companies that have existing drop shipping programs or wholesale merchandise for Canadians:
Vitabase Health Supplements – Vitamins and supplements with global shipping.
Fragrance Net – 16,000+ discounted brand name fragrances, aromatherapy, skincare and hair care products.
Olive Kids Canada – Decor and bedding for kids. They drop ship across Canada from Ontario.
Grosche – Kitchenware company offers drop shipping in both Canada and the US, along with wholesale options.
Wordans – Canadian clothing wholesaler specializing in t-shirts, tank tops, sweatshirts, jackets, hats, work clothes, accessories, etc.
Nu-Look Fashions – Canadian Fashion wholesaler offering wholesale clothing, including knitwear, formal wear, office wear, sportswear, cruise/resort wear, and evening wear.
XTek Electronics – Drop ships electronics Canada-wide.
Wedding Star – Almost 3000 wedding accessories can be drop shipped to Canada and they pay the duty charges.
If you’d like some help in selecting which companies to work with, check out our list of the Top 4 Drop Shipping Suppliers for Canadians.
Drop Shipping Tools That Will Help You Beat the Competition
I recommend having an eCommerce website no matter where you’re selling, but you can opt to only sell on eBay, Amazon and other online seller markets. These markets can be more challenging due to the side-by-side competitive environment, but you can win the game with proper data and market analysis.
To that end, Canada’s Terapeak is a powerful tool that is taking Canadian sellers to the next level. You’ll gain access to insider eBay, Amazon.ca and Alibaba analytics for Canada, the US and other countries. You can track your own listings and strategies over time and see how they shape your bottom line, as well as that of your competitors. Seamlessly source the winning products from Alibaba through Terapeak, or use the data to go through other drop shipping suppliers listed above.
We will update this post periodically as we find more drop shipping and wholesale suppliers that service Canadians. Please bookmark the page or follow us on Twitter so you don’t miss any updates.
Are you new to drop shipping in Canada or do you have some experience to share? Please comment below.
✔ You may also be interested in reading:
Finding Suppliers for your Canadian Business
Online Marketplaces for Canadian Sellers
Checklist: How to Start an Online Business in Canada
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