How to Become a Dropship Dealer

You may need to secure a warehouse as your drop-shipping business grows.

Drop shippers supply and mail products out to the customers of wholesalers. The wholesalers' customers can be either retailers or consumers. However, as a drop shipper, you will need to find your own supplier from which to buy products. Most drop shippers order their products from larger wholesalers or manufacturers that can produce or buy products in high volumes. This prevents you from having to stock products in your home or spending lots of money on inventory. There are several key steps in becoming a drop shipper of products.

Things You'll Need

• Wholesale or manufacturing drop shipper
• Website
• Brochures
• Business cards
• Order forms
• Warehouse location
• Shipping boxes
• Shipping labels

Instructions

1. Set up an office in your home to start, as you will not need to stock products when using a large drop-shipping supplier.

2. Decide o the types of products you want to sell. Select products with broad appeal such as toys, electronics or vitamins..

3. Contact your local county or city administration office. Ask for an application for a DBA or "doing business as" status, if using a name different that that of your business, according to the Small Business Administration at SBA.gov. Obtain an application for a seller's permit at the same location, as you will need this license as a wholesaler.

4. Find a wholesaler or manufacturer that offers drop-shipping services. Contact the National Association of Wholesaler-Distributors at Naw.org. Search Marketingsource.com for a list of wholesalers. Look through various trade magazines related to the products you want to sell. Search for manufacturers through the "Thomas Register" at Thomasnet.com. Check with eBay.com as large drop shippers often supply products for both online and offline marketers.

5. Call wholesalers and manufacturers. Ask them about their drop shipping services. Find one or more drop shippers that can supply you with the products and drop-shipping services you need. Select the drop shipper(s) that offer you the lowest per-unit prices and fastest shipping times.

6. Ask your drop shipper for recommendations on how to price your products for your customers. Price the product high enough to earn the desired profit, accounting for product purchases, advertising and shipping costs.

7. Obtain a turnkey Website through your supplier(s), if available (also get brochures and order forms from the suppliers). Create your own Website if you cannot obtain one through your supplier; or have a Web designer create one for you.

8. Call small wholesalers in your area that need the products you sell. You may find that you are able to offer the desired products at lower prices than they currently pay. Set up appointments to see the business owners or managers. Leave a brochure and business card with all businesses to advertise your Website, products and prices.

9. Focus your advertising efforts on other wholesalers or people who want to start their own businesses as wholesalers. Run small classified advertisements in business opportunity magazines such as "Business Opportunities," "Home Business Opportunities" and "Success." Place classified ads in large trade publications related to the products you supply. Submit your website to various search engines like Yahoo and Google to drive traffic to your site.

10. Submit orders from your customers to your own drop shipper. Provide your drop shipper with shipping labels containing the addresses your customers supply to you, as you will be drop-shipping products to their customers through your own drop shipper.

11. Find a warehouse location as your business grows so you can ship products for customers. This will give you more control of your business. Hire employees as needed. Order products through your own drop shipper but have them delivered at your business location. Ship all orders out to the customers of your wholesalers; or directly to the wholesalers if they prefer.

Tips & Warnings

• Maintain a database of your customers so you can offer them specials or introduce new products. The bulk of your sales will come from current customers who order on a consistent basis.

References

• Entrepreneur: How to Find Product Sources; Karen E. Spaeder
• Business Know-How: Find Suppliers for Your Business; Janet Attard
• Entrepreneur: How to Find a Drop-Shipper; Corey Rudl; June 2004
• Yenomarketinginc.com: How to Start and Operate a Dropshipper Business: Make Your Fortune Drop Shipping
• SBA.gov: Register Your Fictitious or "Doing Business As" (DBA) Name
• Businessnameusa.com: Seller's Permit

Resources

• National Association of Wholesaler-Distributors
• Thomasnet.com: Manufacturer Supplier Source
• Concept Marketing Group: The Directory of U.S. Associations