Wholesale Drop Shipping

Wholesale Drop shipping is a business where you purchase products directly from a wholesaler and the wholesaler ships the products directly to your customers, saving you from having to stock inventory.

What are the advantages of a drop shipping business?

• Low capital to start. You can become a retailer without needing to invest large amounts of money which provides little risk to you.
• You don't have to inventory or wherehouse products. If the product doesn't sell, you never have to buy it.
• No Minimum Order Requirements. You can dropship as little as 1, 2 or 3 items at a time. 
• You purchase products at wholesale prices and set your own retail prices. 
• Your dropship supplier picks, packages and ships the orders to the customer and most often with your business name on the merchandise. 

How the drop shipping Process Works

1. Find products you'd like to sell.  
2. List those products on your web site or auction  
3. After the product sells collect your money from the buyer. 
4. Place the product order after you've been paid. 
5. The product is shipped directly to your customer 

What you will need to get started:

A federal tax ID or an EIN number
This is the business equivalent of a Social Security number. Don't use your social security number it's better for you to use your EIN number rather than your personal information.

In the US, you need a state tax ID, otherwise the dropshipper must charge sales tax to you (if applicable) and you don't want to cut into your own profits for this. U.S. residents are responsible for collecting taxes from their own state and in some states; gross sales must be reported to the state and county for business licenses.

Obtain a Resellers License
Wholesale Dropshipping means you will be selling product online, so you will need a resellers license, also referred to as a seller’s permit. It is issued by your state agency and obtained from your local Board of Equalization. You can make a visit to your local office and complete the paperwork or simply click here to apply online. The cost is about $50 but can vary from state to state.

For those outside of the U.S., check your local requirements.

Create a website and Merchant account
In order to sell products online you will need a place to showcase them. This is done through creating a website. Your site will display the various products that you will be selling along with product pictures, pricing and ordering pages.

Your website will also need a way to collect the money from buyers. A merchant account will allow you to collect various credit card information and submit deposits into your bank account. This is done by subscribing to a merchant account service. There are many services offering merchant accounts.

One of the more popular ways of collecting money online without going through a merchant account service is through PayPal.  When you signup for PayPal, you can start accepting credit card payments instantly and it's completely free to sign up.

Finding Drop Shipping Suppliers

- Find a recognized drop ship supplier. If you're selling on eBay it helps to have a eBay certified drop shipper.

- Go with a company that provides advanced eCommerce training and doesn't just toss you in the ring with no help whatsoever.

- Start with a free trial, that way you'll know whether a company is right for you, if they're not you haven't lost anything.

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