Following is a guest post about finding and recruiting drop shippers submitted by Avid Amiri.

Finding Drop Ship Providers One of the central advantages of an online business for any home based business person is the ability to leverage third party suppliers, to provide order fulfillment or execution via drop ship or direct ship relationships. For me, this is also the philosophical role or function of an ecommerce business, to serve as a nexus point or connecting point between customers and suppliers. In essence, a pure play ecommerce store should be looking to exploit the internet channel as a sales and marketing platform. The goal is to generate retail arbitrage. This is not unlike a traditional brick and mortar arbitrage—e.g. buy a product for a dollar and sell it for two, except that with ecommerce stores the cost of doing business is almost always dramatically less, leading to higher earnings for owners and shareholders.

In order to get started with drop shipping, I typically suggest that etailers have some form of value proposition that can be offered to the vendor or suppliers. The notion that you are going to carry their products and just throw them up on pay per clicks is not very persuasive or compelling. Moreover, competing on the basis of pricing is oftentimes not the best solution either, as it creates a “race to the bottom” scenario with the integrity of the retail pricing of the vendor’s product being degraded. Vendors need to be reassured that you WILL NOT violate the MSRP strategy they have in place. They also need to be reassured that you can provide them with new market share.

My chief recommendation—that has become something of a personal dictum—is that in order to excite interest on the part of a vendor you need to be interesting to them, both in terms of the economics or the peripheral benefits by way of brand exposure and eyeballs.

What this means is that rankings and search engine placements for critical key terms in the vendor’s industry are essential. If you rank in the top 5 for a key terms like “shower rings” then most manufacturers or dealers of shower rings could benefit by having their items up on your site.

The other approach is to appeal to the vendor on the basis of new market share. Using the above example, if one ranks well for “shower rings” then your play to vendors of shower curtains may be the chance of cross selling to customers that may just impulse buy a curtain while they are updating their shower rings. This may resonate with vendors and you may have success locking them in.

If you have NO rankings, what can you do and how can you still consummate new vendor relationships? Working on developing the power of your site and your daily traffic through advertising is crucial for the success of your e-business for myriad reasons. Next, work with what you can by finding smaller, out-of-the-way brands. These may be new companies actively seeking out new channels of distribution themselves.

One great resource here is exhibitor lists for industry trade shows. Two kinds of companies attend these shows: firms that are well established and just interested in making an appearance, and new entrants that are interested in the prospect of setting up new dealers. The reality is that companies in this latter category are not in a position to decline new accounts. They may also have some great products at aggressive prices. Go through these websites for the tradeshows and refer to the trade show list and website when speaking to the vendor, to let them know that is where you found them.

Look for new and unique brands, look for new entrants, look for established brands that don’t already saturate the markets, especially within brick and mortars. Also be prepared to bring on some limited stock to get started with more desirable brands. If you don’t want to stock these items yourself investigate third party fulfillment companies that can do this for you for a fee.

Beware of bulk drop ship companies, as these companies are generally very pervasive online and products are saturated in almost every channel including eBay, Amazon and Shopping.com. In short, be willing to stretch and be creative! It may take thirty calls to vendors before you recruit one, but with each successive new relationship the easier it becomes to recruit new partners.

For more great insights on drop shipping form Avid Amiri, check out the following forum thread on Experienced People.