Beginner dropshipping questions

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I have begun doing research on dropshipping and have decided I'd like to try selling products on Amazon. I understand how the process works and how to go about finding suppliers, but theres a lot of technical issues that I never particularly see explained anywhere, and I'd like to get solid answers before I go diving in to anything.

First off, my biggest question/problem is payment. This seems to be a relatively overlooked issue, since I guess most people these days are accustomed to using credit cards. My issue is, I dont have a credit card, and being in my early 20s, I dont particularly want one. It seems to me a credit card is a MUST since payments from your customers gets held for long periods of time by Amazon/paypal, leaving you to pay for and ship the product out of pocket until you become a trusted merchant through amazon/paypal. This is the way I understand things to be for now, so please correct me if I'm wrong. I have also heard that most dropship services will only accept credit cards, and wont take paypal or other services for payments. If this is the case, will they accept pre-paid disposable credit cards for payment? If not, this is going to prove to be impossible for me to do, since I currently only work part time and make a pretty minimal amount of money every year, therefore I wont get approved for a very high limit from a credit card company (probably would only get approved for a card with a $300 limit or something, since I am young, dont have any credit, and barely make any money each year). Pardon my ignorance on this issue, but its completely new and foreign to me, and I dont usually purchase things online myself, but when I do I just use paypal. I need some really in-depth information on how to circumvent these payment issues if at all possible.

My second issue that I dont see mentioned very often is handling returns. When a customer wants to return an item, how do I coordinate this between the customer, myself and the dropshipper, so that I can ensure that the customer gets their money back, and the dropshipper gets the item back. Do I have to have the customer ship the item back to me, and then I have to ship it to the dropshipper, or can the customer send it directly back to the dropshipper and the dropshipper issue the money back to me, and then im responsible for sending the money back to the customer?

I want to make sure I'm perfectly clear on these issues before I go in to anything, as I dont want to have a customer waiting for long periods of time, just to get the order shipped because I'm tied up in some kind of financial bureaucracy.
#beginner #dropshipping #questions
  • Profile picture of the author Samsaly
    To deal with problems of inventory, shipment or something like this, you can try some inventory management extension. And this is a free extension which can help you: JajaHub - Woocommerce Stock Management Cloudware

    Have fun
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  • Profile picture of the author LABEShops
    Originally Posted by Person7 View Post

    I have begun doing research on dropshipping and have decided I'd like to try selling products on Amazon. I understand how the process works and how to go about finding suppliers, but theres a lot of technical issues that I never particularly see explained anywhere, and I'd like to get solid answers before I go diving in to anything.

    First off, my biggest question/problem is payment. This seems to be a relatively overlooked issue, since I guess most people these days are accustomed to using credit cards. My issue is, I dont have a credit card, and being in my early 20s, I dont particularly want one. It seems to me a credit card is a MUST since payments from your customers gets held for long periods of time by Amazon/paypal, leaving you to pay for and ship the product out of pocket until you become a trusted merchant through amazon/paypal. This is the way I understand things to be for now, so please correct me if I'm wrong. I have also heard that most dropship services will only accept credit cards, and wont take paypal or other services for payments. If this is the case, will they accept pre-paid disposable credit cards for payment? If not, this is going to prove to be impossible for me to do, since I currently only work part time and make a pretty minimal amount of money every year, therefore I wont get approved for a very high limit from a credit card company (probably would only get approved for a card with a $300 limit or something, since I am young, dont have any credit, and barely make any money each year). Pardon my ignorance on this issue, but its completely new and foreign to me, and I dont usually purchase things online myself, but when I do I just use paypal. I need some really in-depth information on how to circumvent these payment issues if at all possible.

    My second issue that I dont see mentioned very often is handling returns. When a customer wants to return an item, how do I coordinate this between the customer, myself and the dropshipper, so that I can ensure that the customer gets their money back, and the dropshipper gets the item back. Do I have to have the customer ship the item back to me, and then I have to ship it to the dropshipper, or can the customer send it directly back to the dropshipper and the dropshipper issue the money back to me, and then im responsible for sending the money back to the customer?

    I want to make sure I'm perfectly clear on these issues before I go in to anything, as I dont want to have a customer waiting for long periods of time, just to get the order shipped because I'm tied up in some kind of financial bureaucracy.
    I would suggest Paypal and their debit mastercard as a solution to you payment issue. Payments processed thru their credit card processing service is immediately available in your Paypal account. You can use their debit card to pay for the merchandise with your dropshipper - they will see it as a credit card and process it without issue. You could expand into using a bank account with a debit card once you get the hang of everything.

    I would not suggest trying to sell on Amazon until you have systems under control as Amazon is very strict as to shipping deadlines and other requirements, plus you will only get paid for sales every 2 weeks and they usually hold funds for new sellers for up to 30 days. Sounds like you would not be able to handle the cash flow at least until you have other sales under your belt and profit in the bank.

    Returns are going to vary with the dropshipper. Many do not take returns so you will need to resell it yourself after getting it back from and refunding the customer. Some take returns, but not directly from customers so the customer would return it to you and you do an RMA with the manufacturer to return it to them for credit - usually with a restocking fee charged. Check with your dropshipper as to their regulations and return periods.
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    Owner of LABEShops.com & 20+ Niche Online Stores as well as Scifispace.com and other sites. Recommended Host: Evolve

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  • To dropship successfully, you need a firm understanding of the practice and how it works. It's not overly complex, but it does involve many moving parts that require research before getting started. Before jumping in, I would recommend taking a look at Skip McGrath's blog. He is an excellent resource for dropshipping, Amazon and eBay, and has shared many articles detailing his expertise. That's a great place to start.

    Good luck to you in this new venture!
    Tiana with ecomdash
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    • Profile picture of the author Person7
      Thanks a lot for the replies guys. Sorry its taken me so long to respond, I've had a lot going on.

      I will definitely look in to getting a paypal merchant account with a paypal debit card and research how all that works. If Amazon is too hardcore to start with, what other platforms would you recommend starting with? Should I stick with Ebay at the start just to test the waters?

      Also, thank you for the blog recommendation tiana with ecomdash, I will definitely check it out. I want to do as much research as possible before I go jumping in to this so I'll know exactly what I'm doing. I know the fundamentals so far, I just want to make sure I'm clear on all the things I dont see talked about much.
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      • Profile picture of the author RichardAtVeeqo
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        • Profile picture of the author AadhyaMehra
          Banned
          Originally Posted by RichardAtVeeqo View Post

          Yeah, id suggest eBay to test the waters. Its an easier way in than Amazon, especially if your starting out.

          Perhaps you could try etsy as well.
          Yes, I agree with your post as the id is good to suggest the eBay to test the waters. It is good for the startup.
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  • Profile picture of the author Samfakroon
    Yes I agree start with Ebay then shift to Amazon. Now to help you solve your payment issue use http://www.gyft.com/ to buy gift vouchers instead of using CC on amazon.
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