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The 6 Most Effective Supply Analysis Techniques for Dropshipping E-Commerce Businesses

Dropshipping is gaining in popularity, with more people turning to ecommerce as their preferred shopping method. The good news is that this business model requires minimal investment, as the seller doesn’t carry inventory. However, it presents its fair share of challenges, one of which is finding reliable suppliers whose products will appeal to customers. To ensure long-term success, dropshippers must get their hands on the right product mix, price points, and fulfilment partners. One way to achieve all this is through supply analysis. This post outlines the most effective techniques to deploy in supply analysis.

Supplier Check

One of the first supply analysis techniques a dropshipper should implement in their business is supplier check. This technique involves rating potential suppliers based on various criteria, including their shipping and return policies, fulfilment accuracy rate and reputation, customer service, order processing times, and product quality. Once you have a solid batch of suppliers you trust, conduct a cost-performance analysis to determine which among them offers the best deals.

Product Analysis

Next, evaluate the product suitability of your suppliers’ product ranges. Dropshippers must concentrate on products that will attract customers, sell quickly and profitably, and can be easily shipped and returned. To maximize profits per transaction, analyse the product rates and consider bundling options to boost sales. Focus on products with clear USPs, so as not to compete with other retailers selling the same product under the same brand name.

Regulations Compliance

A third supply analysis technique is regulations compliance. Some suppliers may not be compliant with government regulations, which can avert your business from legal scrutiny. Regulations change frequently, and it’s crucial to stay up to date with any new or revised regulations that may affect your suppliers.

Drop Surfing

Drop surfing is a product sourcing technique that originated from affiliate marketing, where affiliates switch from one affiliate program to another to maximise revenue. Dropshippers can also use this technique to switch from one supplier to another, depending on performance indicators like the popularity of a product, future projections, profitability, and the suppliers pricing, shipping rates, and order processing and customer service levels.

Researching Competitors

Research your competitors’ offerings thoroughly. Analyse the number and variety of products they offer, their prices and features, and their promotions and loyalty schemes. Use this information to create a competitive market position for your own store.

Profitability Analysis

Finally, perform profitability analysis to ensure that your supply chain is in-line with your long-term business goals. This technique allows you to evaluate the profitability of your products compared to your overall costs, including marketing, shipping, and supplier fees. This analysis will help you make decisions on whether to continue selling a certain product, or switch suppliers if the cost savings are significant.


Effective supply analysis ensures the longevity, growth, and success of dropshipping ecommerce businesses. It involves supplier checks, product analysis, regulations compliance, drop surfing and profitability analysis. By employing these six techniques, dropshippers gain critical insights into their suppliers, their products, their compliance with regulations and legal standards, and overall profitability. Ensure to implement these techniques to build a solid supply network that sets you apart from the competition.

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