what are 5 industry secrets to know in the supply chain

Introduction

Hey guys, Mark here from Speed Fulfill, and I’m back with a very interesting article to share. Today, we're diving into some industry secrets in the supply chain, especially tailored for drop shippers who work with suppliers, mainly from China. Understanding these secrets can help separate myths from facts about dropshipping suppliers in the supply chain.

1. Overseas Warehouses

Many dropshipping suppliers claim to have overseas warehouses outside China. However, in our experience, this is often not the case. Outside of large companies such as CJ Dropshipping, SheIn, or Temu, medium-sized dropshippers often lack actual overseas warehouses due to the high labor and rental costs. It’s generally more cost-effective for these companies to ship products directly from China to the global market rather than maintain overseas facilities.

2. Taxation by Your Dropshipping Supplier

A common misconception is that your dropshipping supplier handles taxes. The reality is that taxation, including customs and VAT, is managed by logistics partners like YunExpress, 4PX, and CN. These companies collaborate with private suppliers to fulfill orders and deal with customs and VAT taxes. Therefore, dropshipping suppliers rarely provide direct evidence or records relating to individual order taxes.

3. All 3PL Suppliers Use the Same Logistics Providers

When you engage a third-party logistics (3PL) supplier like Speed Fulfill, it's important to know that almost all suppliers have access to the same logistics providers in China. The shipping lines and costs may vary, but the logistics providers (such as YunExpress, 4PX) are the same across the board. Hence, no supplier has a unique shipping line, and it's crucial to ask your supplier for shipping quotations based on the logistics provider they use.

4. Dropshipping is Relative to Markets

The dynamics of dropshipping can vary significantly depending on the target market. For instance, dispute rates and the strictness of payment providers differ by country. The US and UK tend to have stricter measures compared to the Netherlands or Germany. Thus, the customer behavior and quality expectations should dictate how you set up your dropshipping store and market your products.

5. Private Agents vs. Branded Suppliers

The dropshipping landscape is evolving, with private agents gradually being replaced by branded suppliers like Speed Fulfill. While private agents offer personalized service and potentially lower pricing, branded suppliers provide professionalism, scalability, and stronger connections with factories. These suppliers also have larger teams, making them more reliable for expanding businesses.

Selecting the right supplier is crucial, and the trend is shifting towards more professional and branded companies providing superior service.

I hope you find these tips and tricks useful. Make sure to choose your suppliers wisely. Until next time, take care and happy dropshipping!

Keywords

Overseas warehouses
Taxation
Logistics providers
Market dynamics
Private agents
Branded suppliers

FAQ

Q: Do most dropshipping suppliers have overseas warehouses? A: No, many medium-sized dropshipping suppliers do not have overseas warehouses due to high costs. Larger companies like CJ Dropshipping and SheIn are exceptions.

Q: Who handles taxation in dropshipping? A: Taxation, including customs and VAT, is typically managed by logistics partners, not the dropshipping suppliers themselves.

Q: Do all 3PL suppliers use the same logistics providers? A: Yes, most suppliers have access to the same logistics providers in China, though the shipping lines and costs may differ.

Q: How does dropshipping differ by market? A: Customer behavior and payment provider strictness vary by country, affecting how you should set up and market your dropshipping store.

Q: What is the difference between a private agent and a branded supplier? A: Private agents offer personalized service and possibly lower prices, while branded suppliers provide more professional, scalable, and reliable service with larger teams and stronger factory connections.