The FAQ on Using Drop Shipping Wholesalers to Make Cash

The FAQ on Using Drop Shipping Wholesalers to Make Cash

With many looking for ways to make some extra cash, how to profit using drop shipping wholesalers is becoming a more common sought after piece of information. With that in mind this article has been written to provide you with some important knowledge before you decide whether it is right for you.

What is dropshipping?

Dropshipping basically allows you to sell products either on your own site or on auction sites like eBay without having to deal with any physical stock or inventory as the wholesaler will deliver the goods directly to your customers.

What are the benefits and disadvantages compared to using a wholesaler?

As previously mentioned an advantage is that you won’t have the hassle of dealing with any physical stock as the goods are delivered directly to your customers. Another benefit is the start up costs are very low. The negative is that wholesalers that offer a dropshipping service do charge slightly more than those that don’t so your profit may be a little less.



How can I make sure a company is legitimate?

This isn’t easy but you should certainly take a look at the companies reputation on related discussion boards and forums. Also try to confirm the phone numbers and location of the company as well as any other contact details you may have been given. An easier method may be to use a dropshipping directory as these will provide you with a large list of companies that will have already been tested.

Do I Need Any Kind Of License?

A large number of companies don’t require any kind of business license so it shouldn’t be a major problem. That said some do ask for a business license, these tend to be those that prefer to sell in bulk and so use the business license as a way of discouraging any buyers that aren’t serious. If you do require a license however don’t panic as they are easy to obtain although depending on the state you are from a small fee may be chargable.

How Can I Pay For Goods I Order?

Each company is different but the main payment methods you will encounter will be Paypal, credit card and Escrow.com, these are the most common methods but you may also find some using a letter of credit or cash on delivery. Payment methods I would strongly advise avoiding are those involving wire transfers.

How much money do I need to get started?

You can successfully get started with as little as $50 provided you don’t start with expensive electrical equipment. Although you can start small you shouldn’t think small as you will find that prices drop when you buy in bulk so your ultimate aim should be that you can build up your business to the point where you can buy in bulk and increase your profit margins.

Hopefully the information above will provide you with a far greater knowledge of drop shipping wholesalers and whether you want to go ahead with using them as a business venture.

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