Many dropshippers struggle scaling their business because they believe that they can do it on their own. In reality, without a team of specialists, this is often not feasible, especially for those who lack experience and skills in negotiating and establishing long-term partnerships with other stakeholders. In this article, we will elaborate on why dropshippers who plan to scale/are scaling their business should work with a trustworthy dropshipping agent.
What are the benefits of having an agent?
More often than not, as a middleman between dropshippers and manufacturers, dropshipping agents focus on establishing personal relationships with both sides. Closer connections with factories help them leverage when negotiating price, terms and conditions, and product quality grades, etc. Unlike many AliExpress sellers who place the orders directly on Alibaba and ship out the packages, an agent would work directly with the factories to get you the best deals. For private agents, they would even have phone or face-to-face conversations with multiple suppliers in order to deliver products with high quality at an affordable price level to you. Upon your request, they would even be willing to pay occasional visits to factories for quality inspection. With additional guarantees on your final products, you would be able to increase customer satisfaction and build a loyal customer base. Moreover, should there be any issues with the products, a reliable dropshipping agent would better assist you with exchanges and returns as well as communicate problems to manufacturers so that they would less likely to happen again.
Now that you see some advantages of working with an agent, you should decide what kinds of agents they are. Generally, location is among the key factors in the decision-making process. In most cases, you would decide between one that is based in China - where the majority of goods is dropshipped from - or your targeted regions/countries. In the next part of this article, we will provide some analysis on why a China-based dropshipping agent is preferred.
Before that, let us go through some disadvantages of dealing with agents who operate outside of China.
Firstly, it usually incurs higher costs such as warehouse management and maintenance costs. This does not include higher fees for stocking and storage. Take ShipBob, a US-based fulfillment company, for example. They charge $25 for inventory receipt if it takes less than 2 hours ($40/man/hour afterwards) while this is virtually free in China-based warehouses. Secondly, when you ship out bulks of products to be stored in the ‘local’ warehouses (e.g. the U.S if this is your targeted market), there are likely to be more complications in the process. For instance, more restrictions in terms of the types and quantities of items are imposed by customs and immigrations. Besides, if things go wrong, such as faulty products, it would also take additional time and effort to resolve them.
Now, what are some advantages when your agent is based in China?
First and foremost, language proficiency and cultural sensitivity plays an important role in most aspects of conducting a business. Therefore, a Chinese agent with local knowledge would provide you better advice on the best course of actions, especially if you are undergoing some changes such as scaling. Secondly, you will save multiple types of costs. Besides those listed in the paragraph above, most agents offer free storage in their warehouses for 3 months. In addition to cost effectiveness, it also gives you more freedom in inventory planning. Last but not least, working with a reliable Chinese dropshipping agent can save you time. For example, when you want to test new products, the shipping time between factories and your suppliers/agents would be shorter since they are located within China, which is subjected to fewer restrictions.
To take it one step further, where in China could you find the best agent(s)?
In general, it is ideal if your agents have offices, warehouses, and/or fulfillment centres in coastal provinces (Guangdong, Fujian, Zhejiang, Jiangsu, Shandong) because they have better access to ports and international shipping methods, which helps to speed up the workflow. Among the listed above, Guangdong, known for its highly industrial clusters and fast developing economy, is the most preferred. Not only is it situated near the heart of Southeast China and ASEAN countries, it is also adjacent to Hong Kong, one of the biggest logistics hubs globally. Some industrial and manufacturing clusters/cities in Guangdong include:
Guangzhou - the capital city characterized with apparel and fabric industry
Shenzhen - the most famous economic zone in China specialized in electronics
Shantou - known as a leading toys and crafts manufacturer
Jieyang - famous for its shoes making industry
We hope this article gives you a good reference point on finding your dropshipping agent. If interested in scaling your business, get in touch with us today! With over 30 years of logistics experience, Xianchao Logistics, a Guangzhou-based company, began to branch out to serve the dropshipping industry in 2015. With our experience in logistics fulfilment and close relationships with suppliers, our company has risen to help different dropshippers grow their businesses over these years. We believe that our company’s success and growth will only come with helping our clients grow.
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