Product Sourcing for the Startup Internet Business: Using a Dropshipper Helps

If you want to sell products online but don't want to spend your own money up front for these products then dropshipping is what you want.

Here's how dropshipping works. First you establish an account with a wholesale supplier that is willing to ship the products they provide directly to your customers.

You obtain all of the product images and descriptions from your supplier, build your website and open for business.

A customer finds your store and falls in love with a product that you have priced at let's say $100. They purchase the item with their credit card. Your site automatically factors in shipping and taxes on top o f the purchase price.

Your credit card processor automatically deposits the money you charged your customer (minus their processing fees) into your bank account within about 2 - 3 days.

You email, call or log in online with your supplier and order the product that your customer ordered from you. You will give your supplier your wholesale cost of the item; let's say $70 plus their shipping charges. You will also give them the address of your customer and they will then ship the product as if they were you.

If we follow the buck you see that your customer gave you $100, plus shipping plus taxes (if they apply) You would pass the taxes through to your state. The shipping would pass through to your supplier. In our example your wholesale cost on the item is $70 so that leaves your profit at $30.

The best part of it is you did not have to order the product until someone ordered and paid you for it first. Now keep in mind you will want to make sure you have funds on hand to purchase the product from your supplier because there is about a 2 to 3 day wait until the funds would be available from a credit card purchase.

Let's discuss Dropshipper companies now. When trying to find dropshippers you have to realize one thing. You are not only looking for a company that provides a product you want to sell but also provides the service of shipping it to your customers.

You may not find exactly what you want to sell because there may not be a company that will allow you to purchase the product wholesale and provide the shipping services you need.

You have to understand that not all products in the world are available through dropshipping companies. Let's say that you want to sell Schwinn Bicycles. You love Schwinn and want to sell them to the whole world.

Well in your research you find that the only way you can sell Schwinn bicycles is to get set up directly with Schwinn. Maybe they require their wholesalers to have a brick and mortar business and invest one million dollars in stock before they can be approved to sell Schwinn.

If you are stuck on selling Schwinn then that will have to be the criteria you meet. It is their bicycle and they can set the rules however they want.

If you cannot meet their requirements then you may decide that Schwinn bicycles are not the best thing for your business to sell. If you are in business to make money then there are plenty of other products that make money, sell some of those.

How do you find dropshippers? Well you can check online using the search engines. If you were looking for a Dropshipper of candles then you would type in "candle dropshippers" and see what comes up. There are also several online directories that are a good resource for dropshipping companies.

When contacting dropshippers to establish an account there are some questions you will want to get answered. Do they have sign up fees? What are their dropshipping fees if any? How do they ship the products? How will they notify you when the product is shipped to your customer?

Don't forget to ask them for their price list and what method of ordering you will be using. More questions you will need answers to are covered in the course curriculum.

When it comes to dropshipping just remember this. Interview several companies for the privilege of being your supplier but only choose one per website. Any more than that and you will complicate the order fulfillment process.