28 Drop Shipping Questions Answered

28 Drop Shipping Questions Answered

I get asked a lot about drop shipping, so I sat down to write a brief post answering a few of the most common questions.  Nearly 5 hours later, I was still writing and my “quick little post” had ballooned into a 4,000 word beast!

To make the information a bit more manageable, I created a drop shipping resource library broken up into four different sections, all outlined below.  If you see an interesting question, click on the appropriate heading to get more information.  If I missed an important question or topic, let me know in the comments below and I’ll make sure to add the answer.

 

Basic Drop Shipping Principles

What is drop shipping and how does drop shipping work?
What is a drop shipper and where can I find drop shipping suppliers?
What are the benefits of drop shipping?
What are the disadvantages of drop shipping?
What kind of profit margins can I expect with drop shipping?

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Finding & Partnering with Suppliers

How do I find drop shipping companies?
Should I use drop shipping or buy products in bulk?
What’s required to work with a drop shipper?
What kind of fees do drop shippers charge?
What is the difference between a manufacturer, a wholesaler and a drop shipper?
How do I know what products to drop ship?

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Starting & Running a Drop Shipping Business

What do I need – and much does it cost – to start a drop shipping business?
Is drop shipping legal?
Do drop shippers provide customer service and/or talk with my customers?
How do I submit orders to suppliers?
What is the turnaround time for fulfilling a drop shipped order?
How do I get tracking information for orders?
How do I pay my supplier?
Who pays for the shipping costs on orders?
Do orders appear like it came directly from my company?
How do returns from customers work?
Who pays for the shipping on returned items?
Do drop shippers ship internationally?

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Avoiding Drop Shipping Problems

How do I make sure customers don’t order out-of-stock items?
What happens when mistakes are made regarding fulfillment?
Isn’t selling items that you never see difficult?
Do I need to worry about fraud with drop shipping?
How can I determine if I’m dealing with a quality drop shipping wholesaler?

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Photo by Ninja M

Andrew Youderian
Post by Andrew Youderian
Andrew is the founder of eCommerceFuel and has been building eCommerce businesses ever since gleefully leaving the corporate world in 2008.  Join him and 1,000+ vetted 7- and 8-figure store owners inside the eCommerceFuel Community.

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38 Comments

John DeLanceyAugust 12, 2012

Excellent overview of dropshipping. I worked for a billion-dollar company in their tech drop shipping division and didn’t know a lot of this!

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Andrew YouderianAugust 12, 2012

Thanks John! Glad to hear it was useful. Thanks for reading!

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Tim HuffAugust 12, 2012

More great information! Thanks Andrew! Definitely taking your recommendation on WorldWide Brands.

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Andrew YouderianAugust 13, 2012

Glad it helped, Tim!

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GabeAugust 13, 2012

I’d like to try WorldWide Brands, but it looks so scammy and all the review sites that **don’t** have affiliate links say the prices are horrible and it’s simply a ripoff.

Plus, it sounds like you don’t even use them nor did you use them for any of your sites.

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Andrew YouderianAugust 13, 2012

Gabe,

I’m not sure what made you think that. World Wide Brands was one of my first investments when starting my business (I did pay for it), and I’ve used them to find suppliers for a number of my drop shipping sites. Per my affiliate policy, I only use affiliate links for products I have used myself, or am very familiar with and can recommend. World Wide Brands is a product that I’ve used – paid for – and can recommend.

Hope this clears things up….

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GabeAugust 13, 2012

Ok, I got the feeling you mainly used it for niche ideas.
(I’m a little tainted from the doba.com 7 day free trial…what a bunch of crap on there.)

I’ve found searching for drop shippers and even just wholesalers takes a huge amount of time. This is by far my biggest issue, finding products to purchase.

I have one wholesaler and one dropshipper for my site now…just need to add more higher priced products.

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julienDecember 1, 2015

Hey Andrew! So glad i’ve found your website! Keep up the good work.
Just one quick question regarding WWB. I’m still reluctant to purchase it because i’ve heard that it has a massive list of dropshippers located in the USA but almost nothing for Europe and Asia. Is this true or not?

Thank you.

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RickAugust 24, 2012

Hi Rick here,
Andrew , I have paid big bucks to a company that builds web sites. I just went thru the first lesson
I am being asked to find my own Dropshippers, This is very frustrating to say the least!
My goal is to build a wesite that sells (organic products for home gardeners) this would include fertilzers and oganic pesticides,etc.
my searches have come up with companies from China and India in most cases!
I would appreciate any help for locating some Dropshippers here in the USA!
Regards, Rick

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Andrew YouderianAugust 27, 2012

Hey Rick! If you haven’t already, I’d recommend the following post / video which discusses how and where to find quality U.S. based drop shippers:

https://www.ecommercefuel.com/drop-shipping-wholesalers/

Hope this helps!

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Κατασκευή ιστοσελίδωνSeptember 3, 2012

You book is the best for newbies. Thanks. Please write more articles 🙂

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Andrew YouderianSeptember 3, 2012

Thanks! Glad you enjoyed the eBook – I spent a lot of time to try to make it really informative.

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OwenSeptember 6, 2012

Great post and I have bookmarked as reference.
I tried to opt-in to World wide brands a few times, but nothing eventauated.
I got my drop shippers from an USA drop shippers directory.
Once again, Andrew, thanks for great conteny

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Andrew YouderianSeptember 6, 2012

Thanks Owen! Glad you enjoyed it.

Not sure what problems you were having with WWB – sorry to hear about them.

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AlanaSeptember 8, 2012

Thanks for the great post with loads of helpful hints! I look forward to following your blog.

I’m interested in trying drop shipping however I was wondering how it works when customers order multiple items that are sourced from different suppliers? Obviously the customer will then receive the products separately and at different times which might feel a little disjointed. Have you experienced this and if so have you found that it’s caused you any issues? Thanks

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Andrew YouderianSeptember 10, 2012

While we try to always have multiple suppliers with overlapping products lines (partially to reduce the number of multiple shipments we have to make), this does happen occasionally. I’ve found that as long as you let the customer know the items will be arriving in multiple shipments and provide the appropriate tracking, it’s not a problem. But if you DON’T communicate this well, your customer will think part of their order is missing and you’re certain to hear from them!

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JamesDecember 14, 2012

I was wondering can I dropship from one foreign country to another foriegn country?

Also, my understanding is that I am liable for any damage caused by the product if importing and selling to my own country because I am basically considered the maufacturer as well as seller (in Australia). Does anyone know what the situation is if someone else (say, over in England) imports (say, from China) via my site? Does this reduce liability, given that they imported into their own country?

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NaeJanuary 2, 2013

I found an awesome site that sells accessories for women and have ordered from them several times. I liked their products so much that contacted them and asked them did they offer any kind of direct sales, reselling or dropshipping opportunities because I wanted to start an online boutique and include some of their items. They told me that they did not have those opportunities but I can resell their products. From my understanding, this is not dropshipping so when the order ships the package would come to me. Do you think this is a good idea or would you provide any advice on doing this? Thanks!

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Andrew YouderianJanuary 6, 2013

With only this information, it’s really hard to tell if it’s a good idea or not and the research process would take some digging. If you haven’t already, I’d recommend downloading my eBook which discusses how to evaluate niche opportunities in-depth:

https://www.ecommercefuel.com/profitable-ecommerce-ebook/

Good luck!

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AlainFebruary 13, 2013

Hey Andrew.

Wow. I read almost every blog post here. Fantastic content. So big thanks for the hard work on the blog and the site! Very helpful stuff…

I have a dropshipping conundrum. I am working on a business plan to create a website featuring products from local farms, mostly non-perishable. I would like to avoid stocking up and am considering the dropshipping route. Nevertheless, I would be dealing with small farms, so very small businesses. No distributors there. Do you have any experience dealing with small “manufacturers” per se or maybe advice you could provide? Would dropshipping make sense in that situation?

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Andrew YouderianFebruary 18, 2013

Glad you’re enjoying it, Alain! For what you’re talking about, drop shipping doesn’t sound like a viable option. Unless you’ll only be working with a handful of farms – and they are all willing to ship the product for you – you’ll need to purchase it and ship it yourself. Doesn’t sound like a distributor will have the existing product you’re looking for.

Best of luck!

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SandraMay 9, 2013

Hi Andrew,

I discovered your website yesterday and since then I’ve read through many of your materials. I feel more knowledgeable in online retailing and is motivated to test things out. However, since I am living paycheck to paycheck right now, I am scared of the hidden costs related to search engine optimization, registering and maintaining a legal business and such.

In regards to drop shippers, since I cannot afford to access a wholesalers directory such as WorldWide Brands, I would like to know more about how to find drop shippers in Google searches. Could you let us know how we can identify when a google result is a legitimate drop shipper? For example, how to distinguish between a real deal or just a middleman/scammer.

Thanks very much,
Sandra

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Andrew YouderianMay 10, 2013

Sandra, I’d recommend the video on the following page. It contains a lot of information on how to find drop shipping suppliers without a directory:

https://www.ecommercefuel.com/drop-shipping-companies/

Hope this helps.

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Andrew MorrisonNovember 29, 2013

hello, im having trouble getting people to come to my website. i dont have much money left atm after doing all this (ive dumped close to $400 into this) so i cant afford much more as i cant work anymore. how can i market my website that would be cheap or free? ive made a facbook group, https://www.facebook.com/groups/582585075148704/ and ive been working hard on it, the website and trying to market it so that it is findable. ive tried typing “cheap hunting and camping equipment” and i made it to the 23rd page in google with no luck. please help! any advice would be greatly appreciated

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MaximusDecember 21, 2013

Hi,

Im from Spain, and soon im gonna start drop-shipping in US from places like Wallmart and etc…as you know when doing freight delivery’s like furniture’s and stuff, i have to coordinate with the local shipping service to schedule delivery time with the buyer and i can’t give my shipping guy my customers number because they’ll call my customer and then my customer will find out where i got the item from, plus it’s gonna be difficult for me to do so because im outside US and the shipping guy has to call me and i have to call my customer back for coordination each time i make a sale. My question is, is there a company/group/people who would do this for me for a monthly fee? like when ever someone buys something from me , I send my customer’s number to that company/group/person and i put that company/group/person’s number on the order form instead of mine so the shipping guy will call them/him and ask them/him when to deliver and then they/him call my customer and ask when would be a right time for delivery and then call back the shipping guy with the deliver time. So in the end my customer wouldn’t know where i got the item from. Hope you understood what im trying to say. Please HELP!!!!

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LizbethFebruary 21, 2015

I can be your middleman .. I Just saw this .. Let me know!! I’m interested!

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Benjamin JamesMarch 10, 2014

I have a question regarding drop shipping…

Company A is an online retailer. Company A is also incorporated out of the United States. Say Bahamas, for example.

Product is purchased by Company A directly from the manufacturer (in china or India for example) and then shipped directly to Company B in Florida (for argument’s sake).

Company B is an independent company that has agreed to store Company A’s merchandise and then ship to their customers all over the United States.

Company A then pay’s company B for shipping cost + their additional fee.

My question is, how then, would tax be incorporated into this equation? Would company A be charged income tax? What about sales tax?

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HUYNH LEApril 26, 2014

Hi Andrew ,
I am in Vietnam and I am newbie in this DropShip field. I wonder if I can do this business if I live in VietNam ?.
I would like to find some worldwide drop shippers and sell their products on Amazon or eBay. is it possible ?
Please give me some your values ideas.
Le

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Dillon HazelJune 2, 2014

Great post, and a great blog altogether! I’m just beginning my journey as a dropshipper, and have read probably every post on this site. One issue I’m running into with my business is that the shipping fees for small-volume orders is sometimes more than the cost of the product itself.

For example, I had one order in which the total cost to the customer was just over $7.00. However, shipping ended up being almost $15.00! And that was basic UPS ground, from Idaho to Georgia.

Any advice on how to correct/change/respond to this problem?

Thanks!

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Jose RomanJune 29, 2014

Hey, that’s a common problem, especially with low cost items. Generally I stay away from anything with such a low dollar amount, it’s a sale killer unless the item is super difficult to get locally, then its all good. Sometimes, if you can’t wrap the cost of shipping into a price, offer free shipping and stay competitive, then its not worth it.

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DanaDecember 17, 2014

Awesome article! I needed to be reminded of many things I’ve read in the past about drop shipping and also find lots of new information on here that you put together. This is so important to me right now since I’m looking into doing drop shipping for a few items. The drop shippers I’m going to use are companies that I’ve already done business with so that helps relieve some of my anxiety about it a little bit. Thanks so much for the info!

http://www.alyssas-garden.com
Alyssa’s Garden Boutique

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shawnJanuary 12, 2015

i dropshiped a item off of ebay and sold it on ebay for the frist time but i cant upload the tracking because it is all ready being used anyone can help me with this

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Amin salehJanuary 28, 2015

what a nice post you wrote Andrew. I think all people who want to drop ship should know what is drop shipping and how drop shipping works. this info graphic answers above question in a cool way: http://www.2dropshipping.com/how-drop-shipping-works/

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Milad RahmanMay 8, 2015

Plz read my whole coment.

I’m a Muslim. And the model or structure of Dropshipping is not acceptable in Islam. and there is a logical reason .that is that i do not own the product and i do not have right to re-fix its price. I mean my buyer doesn’t know that im working in the middle, they know im the real seller. So its ultimate brokering and almost cheating.
So there is only one way to make it legal is to reveal myself to my buyer telling that i do not own the thing but i can bring the thing to them. So will my buyer like me if i say them all about myself?

Plz reply me.

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zoobieJune 21, 2015

pleas also tell me about the process in india,i m really willing to do this business but i dont have any info about what to do in india for dropshiping,where do i get dopshipers ??? please kindly provide me some information

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RobertOctober 1, 2015

Hi
Thanks for expository information about dropshipping.
I am based in Nigeria,I am presently working on my online store.
And I want to drop ship from foreign wholesalers.
How do I do it?

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B vikranthJanuary 3, 2016

Hi
Can Indians do without tax id of USA, how this work outsider of USA

vikranthskyline@gmail.com

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Lynn MasonFebruary 2, 2016

I am an instructor in business at a local state college. A question came up in class from a student who ordered a case for his iPhone on ebay. It was drop shipped from China from an ebay store in Hong Cong. The question the student asked and I could not answer, is this treated as an import from China and how is it regulated in the US?

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