If you’re starting up a new online business, drop ship wholesale might turn into a favorite search. It’s no wonder, what better way will you find to offer your customers a selection of great products, while carrying no inventory?

Yes there are  drawbacks to a drop ship business model – namely,  lowered margins, but that is totally outweighed by the reduced risk and cash flow improvements this model gives your new online business.

When you first start looking into this model, here are three  things to watch out for:

Drop Ship Wholesale means different things.  As a small online retailer, it means that a manufacturer or distributor will ship just one order directly to your customer and use your name. To a manufacturer, drop ship wholesale might mean that orders not meeting the usual light bulk requirements can ship to the address you designate, but there still might be a volume requirement on a per order basis. And it might not carry your name.

Some cliamed wholesale isn’t actually wholesale. Find out where in the distribution chain your supplier is. The nearer to the product source, the lower the cost shouldl be. Usually, you’ll end up working with a distributor, who is buying from the manufacturer.Or you could be working with someone who is just like you  and their supposedly wholesale rates are not wholesale at all. Once you source the product you want, trace it back to the manufacturer and if they won’t drop ship to you, ask for a distributor who might. You can cust your cost with just this simple step.

Beware of hidden fees and shipping cost. Some drop shippers will charge a per order fee. Don’t forget to include it in your pricing. Some drop shippers will also treat shipping as another profit center. Shipping is a competitive factor for many sites and your bigger competitors can probably offer it for free. If you have to choose between suppliers, be sure to compare the shipping and handling costs and look over their return policies. If you don’t have a choice – at least know what you’re dealing with so you don’t get blindsided with an unexpected and profit killing cost.