Finding wholesale suppliers and dropshipping
Before you can sell products, you need a reliable source. Buying wholesale means holding stock but controlling quality and delivery. Dropshipping means your supplier ships direct to customers, so you hold no stock, but you're still responsible to every customer. This guide covers both, the rules that apply, and how to choose suppliers you can trust.
In short
- Wholesale means buying stock to resell. Dropshipping means your supplier sends orders straight to your customers.
- Either way, you are the seller - consumer guarantees and product safety laws apply to you, not just your supplier.
- Check suppliers carefully, order samples, and start small before committing.
- Work out your full margin after product cost, shipping, fees, returns and advertising.
- Overseas dropshipping often means slow delivery and hard returns, which leads to complaints and refunds.
Wholesale or dropshipping?
| Buying wholesale | Dropshipping | |
|---|---|---|
| How it works | You buy stock, store it and ship orders | Supplier ships each order straight to your customer |
| Up-front cost | Higher: stock and storage | Low: no stock |
| Margin | Usually higher per item | Usually lower |
| Control | You check quality and packaging | You rely on the supplier |
| Delivery | You control speed | Depends on supplier location and reliability |
| Risk | Unsold stock | Unhappy customers, refunds, supplier failure |
Many businesses mix both: stock the best-sellers, and dropship slower or bulky items.
You’re responsible as the seller
This is the most important point. The ACCC says that when consumers shop online, all the usual consumer rights apply, including the consumer guarantees. The business must not make false or misleading claims about products.
- Consumer guarantees can’t be taken away. The ACCC gives “no refunds” signs as an example of something that doesn’t remove them. Products must be of acceptable quality, match their description and be fit for purpose.
- Product safety: the ACCC’s product safety guidance says businesses must comply with mandatory standards and not supply banned products. Toys, children’s products, electrical goods and products with button batteries are common problem areas.
- Delivery claims: don’t promise delivery times your supplier can’t meet.
Agree with every supplier how faulty items, returns, refunds and recalls will be handled, in writing.
Finding suppliers
- Australian wholesalers and distributors: faster delivery and easier returns. Check their ABN and business details.
- Manufacturers: contact them directly; some sell wholesale or will refer you to a distributor.
- Trade shows and industry associations: meet suppliers and see products in person.
- B2B marketplaces and wholesale directories: wide choice, but quality varies.
- Dropshipping apps and supplier networks that connect to your online store.
Checking a supplier
- Business details, ABN or overseas registration, and a physical address
- Samples you’ve tested yourself
- Evidence that products meet Australian standards
- Prices, minimum orders, payment terms and shipping times in writing
- Returns, faulty items and stock-out process
- References or reviews from other Australian sellers
- How they’ll handle your customers’ data (for dropshipping)
See Purchasing, suppliers and supply chain.
Supplier scams
- Too-good-to-be-true prices
- Pressure to pay large amounts up front by bank transfer or cryptocurrency
- Changed bank details in an email. Always confirm by phone using a number you already have.
- No samples or vague product details.
Importing basics
If you import stock yourself, the Australian Border Force explains the requirements, labelling rules and import declarations for bringing goods into Australia. A customs broker or freight forwarder can help. This guide doesn’t cover tax or GST on imports. Ask your accountant.
Know your margin
Work out the real profit on each sale:
| Item | Example |
|---|---|
| Selling price | $60 |
| Product cost | –$22 |
| Shipping | –$9 |
| Platform and payment fees | –$4 |
| Advertising per sale | –$12 |
| Allowance for returns and refunds | –$3 |
| Profit | $10 |
Advertising cost per sale often decides whether a dropshipping store works. Test with a small budget before scaling. See Measuring marketing: call tracking, analytics and ROI.
Setting up to sell
- Your own store gives you control. See Selling online.
- Marketplaces bring customers but charge fees. See Selling on eBay, Amazon and other marketplaces.
- Clear policies: delivery times, returns and refunds, written in plain language.
- Shipping: see Shipping, couriers and freight.
Common questions
Is dropshipping legal in Australia?
Yes. But as the seller, you must follow Australian Consumer Law, including the consumer guarantees, and you must not supply unsafe or banned products. The ACCC says online businesses must follow the usual consumer laws, and you can’t avoid refunds by blaming your supplier.
Who is responsible if a dropshipped product is faulty?
The business that sold it to the consumer. Consumer guarantees apply to what you sell, and a ‘no refunds’ policy can’t take these rights away. Agree with your supplier how faulty items, returns and refunds will be handled before you start.
How do I find wholesale suppliers?
Look at industry trade shows, industry associations, manufacturers’ websites, wholesale directories and B2B marketplaces. Ask for references, order samples, check their business details and ABN for Australian suppliers, and start with a small order.
What margin do I need for dropshipping?
Enough to cover product cost, shipping, platform and payment fees, advertising, returns and refunds, with profit left over. Advertising costs often decide whether a dropshipping store makes money, so test before you scale.