How to Start With Your Wholesale Drop Shipper:

Once you've found a few manufacturers and distributors, such as by using the supplier references or Inventory Browser tool in your FREE Inventory Source account, you'll need to get on the phone and contact them directly. You will want to have a few things in order, including your official business name and your Tax ID or Resale number.

Your Wholesale Drop Ship Product Business Name and Tax ID Number

It is easier then you think to set up your business as a legal entity. The U.S. Government's Small Business Administration maintains a web site that has all the information you need to get your wholesale dropship product company up and running and explains how to apply for a Tax ID or Resale number in every state. You can search for the requirements in your state by clicking here:

 http://www.sba.gov/

The process of setting up your wholesale dropship business legally is actually a LOT easier than most people realize. In many states, you can get all the paperwork done the same day, and is easy and inexpensive when you do it yourself. Of course, there's no shortage of lawyers and accountants to help you incorporate your business if you'd rather not deal with the paperwork. Some wholesale dropship companies will also ask for a credit reference.  Some suppliers bill monthly and others will bill you at the time of purchase, this shouldn't be a problem. If they do require credit references, though, you can usually just provide them with the name and telephone number of your bank.  Do not let these steps stop you from getting started.  You might find a “supplier” who says you don’t need anything, but odds are you might not be dealing with a true supplier.  If you have credit references then you are on the right track, but if not, your credit report or bank reference should still allow you to get started with your wholesale dropship product selling website.

FOR NON-U.S. BUSINESSES
Drop shippers based in the U.S. are generally not willing to drop ship internationally. There are simply too many hassles with customs or the shipping expense can be more then the product.  If your target market is UK customers, you will want a UK based supplier, but if you want to make money you can still use US or Canadian based suppliers to sell to US or Canadian based customers.  You do not need to be from the country where your customers are, but it is best if your supplier source is from the same place as your drop ship customers.

Questions You'll Need To Ask

When you call, simply ask to speak with someone about becoming a vendor for their products. Once the switchboard puts you through to the right person, they'll be able to answer any questions you have, including:

What is the wholesale price they can offer you on their products?
You'll need to make sure that the wholesale price they offer is low enough that you will be able to generate a good profit based on what you will be able to sell their products for.  You can view many of the wholesale prices for the suppliers in your free InventorySource.com tools, but you should still talk with the supplier about the prices.  Some supplier programs will not show the prices until you have been approved for a reseller which can take a few days….BUT DO NOT pay some setup fee to be able to view the products.  You might need to provide some details for your account setup, but it is wise to avoid a “supplier” if you need to pay before you can download the price list.

Do they charge a per order drop fee?
Most companies who drop ship will simply add the cost of UPS or FedEx shipping onto your wholesale price, but some will also charge you a handling fee (generally between $1 and $5). This is to offset their cost of picking, packing, and processing the order for you.  This is very common.  Think about it, they might sell the same DVD to Best Buy as their supplier, but Best Buy is asking for lots of 1,000s of DVD players at a time as well as other products.  It is easy to ship in bulk…..you are asking them to go to the warehouse, and process the order and paper work, and find, pack, and send just a single player to one of your customers.  A few dollars to make up for the non-volume purchase on your wholesale account is still a great deal for your wholesale drop ship product business.

Do they have a monthly minimum of products they will drop ship?
Some companies will require that you sell a minimum dollar amount of their products each month.  A few will also have a monthly maximum of units they will ship for you. Other programs ask you to start your account.  This is not the same as a fee.  They want you to be serious about selling products as it can cost them time and effort to setup your account.  Also, they want to make sure you are really going to be a serious reseller business and do not just want to go through the account process so you can get a few deals for your upcoming holiday or birthday shopping.

How do they bill you?
Most drop shippers will bill your credit card the wholesale price of the product plus shipping and handling as soon as they receive an order from you. With others, you may be able to set up a monthly billing cycle where you submit payment for all orders at the end of each month.

When setting up an account with a distributor, ask lots of questions about shipping and order fulfillment, as these are the two areas that can potentially cause you the most problems. Make sure that they are able to confirm your orders quickly, and that they can provide you with tracking numbers. You need to be confident that you will be able to deliver your customers' orders promptly.  Again, your wholesale drop ship supplier source will have their own supply chain process…and since this process will be yours…naturally this is something you will want to understand while you get started with your new company and online website.