How to Start a Dropshipping Business

Probably the hardest part about starting a drop shipping business is finding a good source. In your search you will likely find mostly middle men, scammers, and people who just want to rip you off. When I started my first eCommerce site I spent months searching for wholesale sources and ended up empty handed. This is the step where most people give up.

I recommend using a directory like Salehoo. Salehoo is a wholesale directory of over 8000 wholesale and dropship companies. Of all the directories I ended up subscribing to, I found it to be the most comprehensive. It's also very reasonable compared to the hundreds of dollars that some directories will charge you (ahem... WWB). Perhaps one of the most important features of the site is that members are allowed to give feedback, whether negative or positive, regarding dealings with either suppliers or retailers. Also included is a members forum which is packed with knowledge from other members' experiences.

You can attempt to find your own sources, but sooner or later you will get sick of the endless flood of scam sites and end up using a wholesale directory.

For a review of several of the largest drop shipping & wholesale sites check out: Drop Shipping Reviews or check out this Salehoo Review

There are tons of places you can sell your products. Two of the most popular are eBay and Amazon. Both sites allow you to setup your own store and sell products on their sites. The advantage of these sites is that they are highly traffic'd and they handle your payment processing for you. The disadvantage is they charge large monthly fees.

Another route is starting your own eCommerce store. To do this I recommend using a canned shopping cart software. Yahoo Merchant Solutions is one option. This service starts at $39.95 per month and gives you a domain, hosting, customizable shopping cart and also handles your payment processing. This is a good solution for beginners who have little web experience.

Probably the cheapest solution is using a free, open source, shopping cart software like Zencart. With Zencart you have no monthly fees besides your hosting (which you provide) and your payment processing should you decide to get your own merchant account. Zencart is highly customizable even if you have very little programming experience.

If you decide to build your own eCommerce site, you will need a way to accept payment for your products. Two solutions that have no monthly fees are Google Checkout and PayPal Express. These solutions allow you to accept credit card payments through the partner site. However, some customers will prefer not to leave your site to make payment and you will lose orders.

The other option is to setup your own merchant account and payment gateway. This will allow you to accept credit card payments on your own site, but will come with more fees. You also will be responsible for securing financial information and dealing with fraud.