Don't be Left Out! Dropshipping Wholesalers and Product Sourcing Secrets You Need to Know

Finding products to sell online or through your cottage home business can be tricky. Is the dropshipping wholesaler solution the best for you?

Unfortunately, there is no single best product sourcing solution that fits all needs. Whether or not the dropship model can work for you will depend on what kind of business you have. Rest assured that the actual finding of product sources isn't that complicated. However, with the incredible surge of interest in home business, ecommerce, eBay and auction selling, there is more information then ever and more more product sourcing choices than ever.

Drop Shipping Companies and Wholesalers Merchandise

One caveat with regard to dropshipping. This may not work for eBay product sourcing. You can read more about why in our article, EBay Product Sourcing Secret. If you are pretty new to this subject, it is also important to know that a true wholesale distributor requires proof of a sales tax permit, or resale certificate, and you can read more about that in our article, Business Permit for Dropshippers, or simply visiting proproductsourcing.com. True wholesale businesses may offer dropshipping as a service, but not all dropshipping businesses are wholesalers. In fact, if they don't require a sales tax permit, they are not wholesale businesses, and if you look closely at the advertising, they will never directly state that they are wholesale businessess.

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Dropshipper wholesalers are not the only product sourcing game in town. Other sources:

1. homemade products


2. factory direct suppliers


3. liquidation closeout specialists


4. local manufacture


5. local/regional craft, artisans, and artists


6. digital information

However, since you may be very intested in wholesale and dropship, generally speaking, there are perhaps 6 or 7 key ways to find product suppliers and distributors:

1. online directories


2. Tradeshows


3. national trade associations


4. the National Association of Wholesalers


5. library manufacturer reference


6. chamber of commerce


7. internet search


8. trade magazines

A few words about online directories. Online directories are not for everybody. You can probably find everything you need without paying a cent for a membership. But, nevertheless, these can be useful. It is important that you choose a reliable directory, preferably one with a forum, and I think these work well if you are in the research stage and have an active curiosity and interest in a broad range of diverse information.

We are members of the Salehoo directory and for that reason recommend it. We use it ourselves and have no complaints.

It is important to understand that online wholesale directories are not product suppliers. They merely provide the contact resources. Better directories, such as Salehoo, also take pains to verify that the businesses listed are legitimate businesses and offer assistance and advice on how best to sell in different selling environments. In fact, recently, there is a detailed "sticky" post in the forum on exactly how to sell liquidation and closeout stock from retail outlets.

There is a fever on the Internet for home business, and at the heart of the fever is a hunger for reliable information on product sourcing. Selling goods that other people want is a sure way to put money in your pocket, but the how of getting low cost goods is not always so straight forward.

Drop ship companies and genuine wholesale product suppliers offer a legitimate means of solving this product sourcing problem. Before you start looking for dropship and wholesaler suppliers, it is important to arm yourself with some basic information that will save you time, money, and frustration.

To truly understand drop ship companies, you need to first understand what a true wholesaler business is. A wholesale company is a business with a specific license granted by its state of residence to purchase products from manufacturers without paying sales tax. The wholesaler then distributes, or sells, the products to retailers (or resellers) at a wholesale price established by the wholesaler. The wholesale price is sometimes a result of negotiation between the retailer and wholesaler. Generally speaking, the greater quantities purchased, the lower the wholesale price.

Reliable product sourcing advice here!

Read on for more must know facts about true wholesale businesses!

True wholesale businesses can only sell to resellers who have a sales tax permit, and this is granted to retailers by the state of residence. Tax permits, by the way, are usually free and easy to get. This means that you can always identify a true wholesaler by whether or not it requires proof of your sales tax permit. A business who does not require proof of a sales tax permit, no matter how low their prices, is not a true wholesale businesss. They are, in fact, in the retail business. Always. That's not to say that some retail businesses may not give you rock bottom or even below wholesale prices, but they are not wholesale companies. A wholesale company, by definition, is required by law to have proof of your sales tax permit.

Dropshipping is a service that used to be offered by wholesale companies to their reseller customers. Dropshipping simply means that the product distributor stores its inventory in its warehouse. When you sell a product, you then send payment to the drop ship company, and it,in turn, sends the product under your business name to your customer. Your customer is never directly aware of the dropshipper. This is called "blind dropshipping."

This next point is important. Not all wholesalers are dropshippers, and not all dropshippers are wholesalers. If you are new this, please read that line over. Just because a company is a drop ship company does not mean that it is a true wholesale company. Now, they may advertise "wholesale prices," but unless they require proof of your sale tax permit, they are just retail companies offering a dropship service. And that's true no matter how good their prices. That doesn't mean you shouldn't do business with them, just that you should be aware that they are are essentially a retail business.

Examples of legitimate dropship companies who are not true wholesaler would be dropshipdesign.com, shopster.com, and megagoods.com, to name a few. Examples of legitimate wholesale companies who offer a dropshipping service would be WYNIT and DBL--two of the biggest names consumer electronics.

This information can save you time, money, and a world of misunderstanding when seeking drop ship and wholesale companies to solve the problem of product sourcing for your home business. Buying cheap and selling dear is a time honored path to business success. To find amazing product sourcing "secrets" and advice on the ins and outs of eBay product supply, take this video tour!