Dropship Wholesale Companies–What You Must Know Before You Spend Money
Product Sourcing Fever
There is a fire on the Internet for home business, a searing hunger for reliable information on product sourcing. Selling goods that other people want is a sure way to put money in your pocket, but the how of getting low cost goods is not always so straight forward.
Drop ship companies and genuine wholesale product suppliers offer a legitimate means of solving this product sourcing problem. Before you start looking for dropship and wholesaler suppliers, it is important to arm yourself with some basic information that will save you time, money, and frustration. Here’s what you must understand.
To truly understand drop ship companies, you need to first understand what a true wholesaler business is. A wholesale company is a business with a specific license granted by its state of residence to purchase products from manufacturers without paying sales tax. The wholesaler then distributes, or sells, the products to retailers (or resellers) at a wholesale price established by the wholesaler. The wholesale price is sometimes a result of negotiation between the retailer and wholesaler. Generally speaking, the greater quantities purchased, the lower the wholesale price.
True wholesale businesses can only sell to resellers who have a sales tax permit, and this is granted to retailers by the state of residence. Tax permits, by the way, are usually free and easy to get. This means that you can always identify a true wholesaler by whether or not it requires proof of your sales tax permit. A business who does not require proof of a sales tax permit, no matter how low their prices, is not a true wholesale businesss. They are, in fact, in the retail business. Always. That’s not to say that some retail businesses may not give you rock bottom or even below wholesale prices, but they are not wholesale companies. A wholesale company, by definition, is required by law to have proof of your sales tax permit.
Dropshipping is a service that used to be offered by wholesale companies to their reseller customers. Dropshipping simply means that the product distributor stores its inventory in its warehouse. When you sell a product, you then send payment to the drop ship company, and it,in turn, sends the product under your business name to your customer. Your customer is never directly aware of the dropshipper. This is called “blind dropshipping.”
This next point is important. Not all wholesalers are dropshippers, and not all dropshippers are wholesalers. If you are new this, please read that line over. Just because a company is a drop ship company does not mean that it is a true wholesale company. Now, they may advertise “wholesale prices,” but unless they require proof of your sale tax permit, they are just retail companies offering a dropship service. And that’s true no matter how good their prices. That doesn’t mean you shouldn’t do business with them, just that you should be aware that they are are essentially a retail business.
Examples of legitimate dropship companies who are not true wholesaler would be dropshipdesign.com, shopster.com, and megagoods.com, to name a few. Examples of legitimate wholesale companies who offer a dropshipping service would be WYNIT and DBL–two of the biggest names consumer electronics.
This information can save you time, money, and a world of misunderstanding when seeking drop ship and wholesale companies to solve the problem of product sourcing for your home business. Buying cheap and selling dear is a time honored path to business success.
Aid and Trade International Directory of Wholesale Product Suppliers
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[tags]dropship wholesale companies,dropship companies,wholesaler suppliers[/tags]
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