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Paying Dropship Suppliers Without Credit Card?

by KeithJones6
13 replies
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I am planning on starting an ecommerce website and using a dropshipping supplier for my products.

I have been reading up on the subject, and I have read that when you're starting out, most suppliers will require you to pay by credit card.

This is a problem, because I am in my early 20's and have yet to get approved for a credit card. This problem, of course, can be easily remedied. BUT, the cards I would get approved for would have a very low limit. And my suppliers charging my card for sales could easily put me over that limit. And it would limit how much I could scale this business for quite some time.


Are there any OTHER good options for paying dropshipping suppliers automatically and maybe with the same funds and account used when the customer made the purchase?

Any experience here? Help is greatly needed and appreciated.



Edit: Also, I am planning on using Shopify as a platform, if that changes anything...
#card #credit #dropship #paying #suppliers
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  • Profile picture of the author OnlineStoreHelp
    Unfortunately the bad credit thing will cause you issues with the other ways as well. If you don't have a credit card, here are your other options:

    Put a deposit down with them - Send it in via check and they pull off that deposit.
    Buy "gift cards" from them. Then use the gift card to make purchases.
    Get trade terms - Highly unlikely given your current credit situation
    Use something like Kabbage - But that is mainly about taking inventory so may not be worthwhile.
    Send a check for each purpose - This is what I do with one supplier but my customers do not expect quick turn around and they want his product so I can get around it.
    Debit Card - Make a business account with cash in it and pay via debit card.
    Pay with PayPal - but if you are new, you will have a hard time using all the balances until PayPal is used to you.

    Not sure if this helps at all.
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  • Profile picture of the author kjamesnv
    In this situation you should use a debit card. If you don't have the cash then this probably isn't something you should be doing anyway. Start off small until you prove your business model.
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    • Profile picture of the author KeithJones6
      Originally Posted by kjamesnv View Post

      In this situation you should use a debit card. If you don't have the cash then this probably isn't something you should be doing anyway. Start off small until you prove your business model.
      Thank you both! I think a business debit would be the best option for me.

      In your opinion, what would be a good minimum amount to have in the account before I try launching with products? Assuming my products are priced at an average of about $200.
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      • Profile picture of the author kjamesnv
        Originally Posted by KeithJones6 View Post


        In your opinion, what would be a good minimum amount to have in the account before I try launching with products? Assuming my products are priced at an average of about $200.
        You need to do a cash flow analysis. Make a spreadsheet that shows maybe 60 days of cash in and cash out. Include all your expenses (shipping, advertising, product etc.) and your projected sales for each day.

        Adjust the sales projections up and down so you can determine what your cash limits are.

        Here is a tip: If you use a Paypal Merchant account to accept payments you will receive funds immediately. Then if you pay your vendors with a Paypal debit card from the same account there will never be a cash lag. just watch your margins and expenses.
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        • Profile picture of the author KeithJones6
          Originally Posted by kjamesnv View Post

          You need to do a cash flow analysis. Make a spreadsheet that shows maybe 60 days of cash in and cash out. Include all your expenses (shipping, advertising, product etc.) and your projected sales for each day.

          Adjust the sales projections up and down so you can determine what your cash limits are.

          Here is a tip: If you use a Paypal Merchant account to accept payments you will receive funds immediately. Then if you pay your vendors with a Paypal debit card from the same account there will never be a cash lag. just watch your margins and expenses.
          Thank you!

          Is there not a risk that Paypal will freeze my account with such regular withdrawals and deposits?

          I have heard good and bad things about Paypal. I just hope it's not something I can't work through by calling them up. Any tips?

          By the way, is there any truth to this: http://www.paypalsucks.com/newforums...-shipping.html
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  • Profile picture of the author kjamesnv
    We do 5 figures daily with Paypal and withdraw that same amount daily. Never had any problems except for 2 brief holds when we first opened our account.
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    • Profile picture of the author KeithJones6
      Awesome!

      One last question. I have also heard most drop shipping suppliers mainly prefer credit. Do you think most of them would accept Paypal? Like if I get a Paypal Business Debit...
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      • Profile picture of the author kjamesnv
        Originally Posted by KeithJones6 View Post

        Awesome!

        One last question. I have also heard most drop shipping suppliers mainly prefer credit. Do you think most of them would accept Paypal? Like if I get a Paypal Business Debit...
        YES!

        The Paypal MasterCard debit card is treated just like any other debit card.
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  • Profile picture of the author jetsetter883
    I'm in the same dilemma as OP. Do dropshippers really hate debit cards? As I'm really not interested in dealing with credit lines at least to start. I'd much rather have the funds going in and out of my business checking account in as close to "real-time" as possible. Does anyone know if this is at all a possibility?
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  • Profile picture of the author iwhiz
    @op which suplier are you using please
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    • Profile picture of the author jetsetter883
      Originally Posted by iwhiz View Post

      @op which suplier are you using please
      I doubt he's going to give that information away.
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  • Profile picture of the author jetsetter883
    Does anybody else have any thoughts on this? Other than rewards, are there any advantages to a credit card? Do most suppliers shun the use of a debit card?
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  • Profile picture of the author Lvldup
    There is obviously pain point here that needs to be addressed in this industry.

    It's only allowing a small share of the market in, while leaving out opportunities for sourcers with bad/no credit or those with maxed out credit to lose out expanding or entering the market.

    Manufacturers that will only cater to a small group of people willing to take on the burden of all the risk are marginalizing sourcers and pushing away new opportunities at the same time.

    This model is ancient and needs to change.
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