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In dropshipping, do you have to pay the supplier before you get money from the customer?

by bm2
10 replies
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Hello,

Do you have to pay the supplier before you get the money from your customer or only after?
Thank you
#dropshipping #payments
  • Profile picture of the author Tsnyder
    I think you don't understand drop shipping.

    1. Customer places order with you... pays you for order.

    2. You order product from supplier... pay supplier.

    3. Supplier ships product to customer.
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    • Profile picture of the author IdosellShop
      Well generally agreed but in case your supplier gives you merchant credit, cash flow might be a bit different. It is up to the contract you have with the supplier.
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  • Profile picture of the author dave_hermansen
    No, The customer orders from you, paying you when they order. Then, you place an order with the manufacturer/supplier. How would you know what to order from the manufacturer for the customer if they didn't place an order with you first?
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    • Profile picture of the author bm2
      And they can`t cancel? What happens if they cancel and the order has shipped?
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      • Profile picture of the author dave_hermansen
        Originally Posted by bm2 View Post

        And they can`t cancel? What happens if they cancel and the order has shipped?
        Well, I would HOPE that you address that in your Terms & Conditions. We tell customers that they may only have an hour to cancel because once we process an order - especially if we have already given them tracking information - they have to accept the order when it arrives or pay a restocking fee.

        Of course, you are worrying about a one in a thousand scenario. How many times have you placed an order for something online and then canceled it? If people put the same effort into doing something as they put into figuring out why NOT to do something, a whole lot more people would be successful in life.
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        • Profile picture of the author bm2
          Do i state on my website that the shpping will arrive in 2 weeks? and they won`t cancel?
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          • Profile picture of the author dave_hermansen
            Originally Posted by bm2 View Post

            Do i state on my website that the shpping will arrive in 2 weeks? and they won`t cancel?
            We got around this problem on a website by giving the customer shipping options that clearly stated the shipping times. Their choices were:

            Standard Shipping: 10-15 Business Days ($6.99)
            Express Shipping: 5-7 Business Days ($26.99)

            Most people chose the cheapest option and, of course, 10% of them wondered where their shipment was after only 3-4 days. We informed them that THEY chose the longer shipping, not us. If they said they wanted to cancel, we told them there would be a re-stocking fee - something they agreed to when they placed the order. We never had anyone cancel their order. We had a few saying they never would have bought if they knew it took that long but we can't help it if people refuse to read. It's not like the world ends when people have to wait an extra week to get something.

            Don't hide your shipping times, scared that it will reduce orders. Make things abundantly clear on your website and you will have less problems.
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  • Profile picture of the author RodneyC97
    Hey bm2, I know Tsnyder has already replied, and he's right! I figured another reply with the same answer would ease your worry. So you import your items for free, then a customer comes to your shop and purchases an item. That money goes directly to your bank account, then you use some of that money to purchase that product from the manufacturer and ship it directly to the home of the consumer. I hope this was clear and helpful.
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  • Profile picture of the author Emilly94
    No, in drop shipping business you have to pay once you get the money from customer
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  • Profile picture of the author GosuCommerce
    no, only after i recieve a payment from a customer
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