Making money with wholesale products is a blizzard of new terminology, unfamiliar business models and more than enough to disturb a new businessperson’s comfort level.

First you must find your dropshipping vendor. We will go into this in great detail over the coming weeks, but I want you to see what you are getting into first.

Setup An Account With A Dropshipper

You will have to contact the shipper to set up an account. This is a process that has gotten easier over the years, with many being about as easy to set up as an internet affiliate program. Dropshippers usually require a little more information than an affiliate program. Soem may require a Tax ID number (EIN). In truth a Social Security Number is every bit as good as an EIN, but dropshippers often require this to try to screen out sellers. It is very easy to get an EIN. They may well ask for credit and trade references, dont be afraid if you don’t have any references like this, just be prepared to prepay for your goods (which is not ideal, but if you can maintain good relations with the shipper, they understand the efficacy of offering you terms and you will usually quickly get the chance to go at the very least to Net 7 or Net 15 (“Net 15″ is a fancy way of saying they will ship the goods and you owe them money within 15 days.)

Selling a Dropshipped Product

When a customer places an order on your site, you will usually get an email message alerting you of this. Obviously, your full retail price needs to account for all the costs of shipping the product that the drop shipper passes on to you. You have a legal requirement to collect sales tax when you are shipping to a state where you have physical operations.

You will turn around and place the order with your dropshipper. If you can become a big success, you will be able to automate with a dropshipper (although certainly not all drop shippers are capable of handling that, it is a case by case thing, but time is on your side, backend systems for the wholesaler and your ecommerce site are getting better every year).

Post-Sale

The dropshipper will fulfill your order and ship to your customer. You MUST know how long this takes, and you must set the expectations of your customer accordingly. When they ship, the drop shipper will charge you the wholesale price, the shipping cost and the dropshipping fee, if any.  Your profit is the difference between the amount you charged the customer and what the shipper charged you.  The supplier will provide you with shipping confirmation, and usually expect you to deal with any problems that occur in transit. It is easy enough to turn around and transfer this information to the customer. I think it is very bad form to let the customer realize that you are not the person ultimately responsible for fulfillment of the order. But, amny lazy merchants try to offload the customer service responsibilities on to the shipping company or on to the dropshipper. You  will lessen the chances of repeat business, but most of all: it is your responsibility, you accepted the customer’s money and the customer quite justifiably expects you to hold responsibility for safe transmission of goods.

The above hopefuly makes it clear that dropshipping, while a good way to make money FAST, is not EASY money. You have a lot of responsibilities to other parties, the government, the wholesaler and the customer, and this is a process you must treat respectfully if you wish to sustain it.