Start by determining the products or types of products you want to sell. You have to choose the supplier/s that you want to work with. Once you have chosen your dropshipper, simply open an account with them and then you are able to list their products for sale without paying for them upfront. You only pay for them when you sell something, then you process the order and they ship direct to your customer.
You make your money from the difference of what your selling price was and what the supplier's cost price is. Just bare in mind that you need to calculate all your costs when pricing an item. Listing fees, selling fees, transaction fees, shipping fees, absolutely everything or you can quite easily end up loosing money on the deal.
You may have noticed that many use the term wholesaler in the same post as dropshipper. Just be aware that they are two completely different things. A wholesaler sells products in bulk with a set minimum order quantity, the more you buy, the cheaper the price. A dropshipper has a set price per unit, whether or not you buy 1 or 20 of the same item, they have no discount on bulk orders, but have no minimum order quantity like a wholesaler.
Dropshippers like to call themselves wholesalers a lot of times because it's a good marketing term. People associate the word wholesale wholesale with cheap, so it gets thrown around a lot these day, but isn't relevant unless the supplier is offering you discounts on volume purchases.
With dropshipping, you don't have to purchase products up front. The dropshipper allows you to advertise their products with your margin built into the price. Then at the time of the sale, you then place the order to ship directly to your customer and pay them their asking price and keep
your margin. Just remember when doing your pricing model to calculate shipping and advertising costs
To help you start off on the right foot with your dropshipper here is a relatively long but very helpful list of questions to ask your dropshipper before you start reselling their products:
1. Do you have any account setup fees ?
2. Do you have any monthly subscription fees ?
3. Will you charge us any extra fees, open or hidden charges, direct or indirect charges, etc. apart from the item selling price in order to ship the item direct to our customers with our label ?
4. After opening an account with you, how long do we have to wait to before starting to sell ?
5. Do you have handling or packaging fees ?
6. Maximum how long would we have to wait for a reply when emailing your customer support ?
7. How much do we need to spend to get a discount on each item ?
8. What is your minimum and maximum quantity order ?
9. What are your warranty policies ?
10. What are your guarantee policies ?
11. What are your shipping policies ?
12. Who pays import and export tax (Customs & Excise) ?
13. Ask about refunds -
a. What are your refund policies ?
b. Do you charge any refund fees ?
c. Do you charge for charge-backs or failed credit card charges ?
d. How long do we have to wait before you give a refund when a refund request is made ?
e. Do you wait for the item be returned to you before giving a refund or do you give the refund immediately when requested ?
f. If you refund only after the item has been returned to you then how long do we have to wait for the refund to be issued after the item has been returned to you ?
14. What are your return policies ? Do you charge any return fees ?
15. Who pays shipping for replacement deliveries ?
(Our customer returning item to us and then we return it to you. Finally, you post replaced item to our customer. There is 3 delivery step here).
16. Who pays shipping for returns where no replacements would be made, us or you ?
17. Do they sell to the general public -
a. Do you advertise on Trade Shows ?
b. If so, then where and how long you've been doing it on these places ?
c. If not, then what's stopping you ?
18. When did you start trading and when did you start dropshipping ?
19. Stock levels
a. How often do you update your stock levels on your website ?
b. When your short on stock and we make you an order, maximum how long would we have to wait for you to restock and dispatch it to our customers ?
20. Are you willing to include receipts when shipping the items with our brand names and addresses on the receipts ?
If so, is there any extra charge for this?
21. When a customer complains against an order because the item didn't arrive or was found broken after opening the packaging, maximum how long does it take you to investigate and solve the problem?
22. Do you send automated/electronic notification upon receipt of order and release of shipment?
23. Can you please provide some examples of problems that arise with your drop shipping arrangement and how have you dealt with them?
24. Do you provide tracking numbers for your delivery/shipment?
25. do you also sell on Ebay?
26. Do you ship the items in packaging that plasters your business name all over them?
27. Are you able to give me competetive pricing so I can compete in the market?
28. Do you offer any incentive to sell more?
29. Do you have a datafeed that I can download?
I also recommend downloading our SaleHoo New User Manual which you can find Link hidden: Login to view. (Note this guide is exclusively available to our members only)
Hope this helps!