How to Spot Fake Dropshipping Wholesalers

Depending on where you're searching, you'll likely come across a large number of "fake" wholesalers. Unfortunately, legitimate wholesalers are harder to find and tend to not have a strong online presence.

This results in the non-genuine wholesalers – usually just middlemen – appearing more frequently in your searches, so you'll want to be cautious.

There are some things to look out for that will help you discern whether a wholesale supplier is legitimate.

They want ongoing fees – Real wholesalers don't charge their customers a monthly fee for the privilege of doing business and ordering from them. If a supplier asks for a monthly membership or service fee, it's likely that they're not legitimate.

It's important to differentiate between suppliers and supplier directories. Supplier directories (which we'll discuss shortly) are directories of wholesale suppliers organized by product types or market and screened to ensure the suppliers are legitimate.

Most directories will charge a fee – either one time or ongoing – but this necessarily doesn't mean that the directory is illegitimate.

They sell to the public – To get genuine wholesale pricing, you'll need to apply for a wholesale account, prove you're a legitimate business and be approved before placing your first order.

Any wholesale supplier that offers products to the general public at "wholesale prices" is just a retailer offering items at inflated prices. But here are some legitimate drop shipping fees you'll likely encounter:

Per-Order Fees – Many drop shippers will charge a per-order dropshipping fee that can range from $2 to $5 or more, depending on the size and complexity of the items being shipped. This is standard in the industry, as the costs of packing and shipping individual orders are much higher than shipping a bulk order. 

Minimum Order Sizes – Some wholesalers will have a minimum initial order size which is the lowest amount you have to purchase your first order. They do this in order to filter out window-shopping merchants that will waste their time with questions and small orders but won't translate into meaningful sales.

If you're dropshipping, this could cause some complications. For example, what do you do if a supplier has a $500 minimum order, but your average order size is around $100? You don't want to pre-order $500 of product just for the privilege of opening a dropshipping account.

In this situation, it's best to offer to pre-pay the supplier $500 to build credit with them to apply against your drop shipping orders. This allows you to meet the supplier's minimum purchase requirement (as you're committing to buy at least $500 in a product) without having to place a single large order without any corresponding customer orders.