How to Set Up a Legit Dropship Business

Drop shipping is a great way to work full or part time from home to earn extra income. What is drop shipping you ask? Imagine that you opened a store right out of your own living room, but didn't have anywhere to put your inventory! In this case, instead of storing the inventory in your living room, you send your orders directly to the manufacturer or distributor who mails out the items from their inventory directly to your customer!

Setting up a legit drop shipping business can take a bit. You'll need to determine what sort of items you'd like to sell, get the proper paperwork in order for your state, and set up your website. If you have an idea already of what you'd like to sell, you can start by contacting various manufacturers to determine if they have a drop shipping option or if they can point you towards a distributor who does. If you aren't for sure what you'd like to sell, you can find a wide range of drop shippers through World Wide Brands. While it does cost to get started, it's a one time fee and they give you legit information about companies that provide drop shipping services.

Once you've found a distributor, make sure to get the following questions answered:
Do I receive tracking numbers for each of my orders?
How do you ship your orders?
Is there a minimum quantity I'm required to order?
What is your drop ship fee?
What happens if an item is out of stock?
Will I be contacted if an item is out of stock?
What is your return policy?

If you are comfortable with the answers to the above questions, then you may have found yourself a good drop shipper and you can move onto the next step in opening your business!

Getting the proper paperwork can be a lengthy process if you aren't for sure where to start. First, call your local tax office and find out if there is sales tax for your state. If there is, you'll need a Resale Certificate (this may go by other names depending on your state). This will allow you to collect sales tax in your state, which you are required to do. Find out from your distributor if there is anything else they will need. They may need signature forms and guarantee forms from you in case you are unable to pay at some point. Once you have all of your paperwork, and have filled out any other forms to declare yourself a business, you are ready to go!

Contact your sales representative at your distributor and ask how you can get started drop shipping. They should provide you with images and stock codes, or at least a way to get them. When marking the retail price for each item you are going to sell, remember to charge adequate shipping and remember to add in the drop ship fee you'll have to pay.

Drop shipping can be a lucrative at home business with some companies making over one hundred thousand a year. Always research the company you have chosen for your distributor. They should never charge you to open an account and you should be able to close it at any time you'd like without incurring penalties.