Seven Wholesaling and Drop Shipping Precautions for New E Business Owners - By Alan Kirchain

When you first decide that you want to get started in the wholesale and drop shipping of real products on the internet, via an auction site or your own website there are several things to consider in order to make your enterprise more successful and ultimately give you less headaches when first getting started.

It’s important to remember that most real wholesale companies do not advertise on the internet.

Why?

Because they don’t need to in order to turn a profit.

You see, real wholesalers deal with the manufacturer directly in such high volumes, that pursuing small to medium sized businesses is not efficient use of there energy or advertising budget. Interestingly enough, it’s not that they don’t want to work with small business, they just don't have the proper resources for the most part to invest seeking out the smaller companies.

This fortunately works to your favor, when we are able to actually get the wholesale supplier that we need.

The bottom line is that when you’re ready to contact a supplier you should keep these following guidelines in mind to protect yourself from a lot of unnecessary heartache and wasted time and money.

1. Get familiar with the policies and products of the wholesaler. Do they offer quality merchandise and are they reliable. How long does fulfillment take after you send in your order? Reliability is a huge key to running a successful wholesale and or drop shipping business.

2. Sometimes it may be possible for you to receive sample items from the wholesaler. Usually this can be done with a simple request. Be prepared to spend a little capital though if you’re just getting started and have not established a relationship with them yet. Certainly you want to make sure that what your selling is a quality product and worth the money for your customer.

3. Find out from the drop shipper how exactly they go about packaging there merchandise. Remember you want your business to be as headache free as possible. Constantly dealing with damaged or broken merchandise will really cramp your style.

4. Anytime a source wants you to pay a fee in order to do business with them it should raise the red flags and sound the horns. Chances are that if they require a fee to purchase from them they probably are not the true wholesaler. I would recommend finding an alternative source.

5. Will the shipper deal with problems on any level. What is there policy when merchandise is returned back to them? Ironing this out from the start is a wise decision, it’s bound to happen so having an agreement and understanding of how problems are handled will make this portion of your business easier.

6. Generally if your selling products that will be shipped within the country your shipping from, your costs should be nominal. One thing to consider is that products that may be shipped internationally should be more of a high ticket item. This is helpful because the increased shipping cost is off set by the higher price of the goods.

7. When setting up your business you will definitely need to get all of the proper documentation. Most true wholesale and drop shipping companies will only deal with you provided you can supply proof that you are indeed a legal business entity. Additionally, this type of business should more than likely be registered and documented in your local government. Drop shipping companies usually require a Tax ID number, wholesalers may want a state resale number as well.

In closing setting up this type of business still represents an easy way to make a profit and start your own business. Despite some of the pitfalls outlined, with proper planning and good judgment these issues can be easily avoided when starting a wholesaling and drop shipping business.

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