Looking for a way to make money online? You’ve probably considered trying your hand at drop shipping, an online business strategy that allows you to sell products without having to maintain a physical store. While the concept may seem fairly straightforward, there are actually a number of legal and regulatory requirements that you need to follow in order to succeed as a drop shipper.
Fortunately, following these guidelines can help you create a successful business that you can grow into a full-fledged eCommerce hub.
Setting Up Shop As A Drop Shipper
The first step to launching a drop shipping business is registering a domain name for your brand. From there, you’ll want to create a website that contains all of the information needed to process orders as well as provide your customers with an easy and pleasant experience. Additionally, you’ll need to decide on a payment method that’s both secure and reliable.
For the sake of this tutorial, we’ll be going with the popular and trusted Paypal as a payment option. Once you’ve set up your site with a PayPal account, you can move on to the next step of establishing yourself as a reputable and honest merchant.
Fulfilling And Shipping Orders
Next, you’ll want to establish yourself as a seller of record for the products you’re offering. For our example, let’s say that you’re selling tumblers online that you import from China. You can go with something as simple as tumblersnow.com for your storefront or create a more elaborate domain such as amazonbeach.com if you’re also selling beach holidays online. Either way, you’ll want to become the trusted source for your customers when it comes to finding the products they need. You can also use your own products for proof of concept, but once your site goes live, you can’t go back and change your product listings.
Now, it’s time to take care of the actual shipping. Since you won’t have a physical store, you won’t have any of the concerns that frequently come with dealing with shipping an item from one place to another (like finding a shipping carrier that handles all of your special requests and has the ability to properly pack and ship large orders).
Instead, with drop shipping, your customers will interact with your brand only online. As a result, you’ll want to make sure that you have all the proper information about shipping available to them. For example, if you’re using UPS as your shipping carrier, you’ll want to have a clear and concise tracking number available to provide your customers with the necessary information to track their packages. Additionally, you can let your customers know what to expect with shipping by including relevant details in your listings (like whether or not it’s a week or two days to receive their order). Finally, you can also provide them with a link to your shipping carrier’s website so that they have all the necessary information about how to deal with customs and how to follow the proper procedures if they’re ever questioned by authorities (i.e., not to claim that the items in their order were manufactured in a specific country).
Getting The Legal And Financial Aspects Of Online Shopping
Once you’ve got your website set up and functioning properly, it’s time to tackle the more legal and financial aspects of online shopping. First, you’ll want to consult with a lawyer who specializes in e-commerce to make sure that you understand all the legal obligations that are associated with operating a business like this.
To begin, you’ll need to register with the States as a retailer, manufacturer, or distributor of goods imported from another country (see Rules & Requirements). Additionally, you’ll need to register with the IRS as a business and file all the necessary forms and pay all the applicable taxes online since you won’t have a physical location (see Income Tax). Finally, you’ll need to decide whether or not to start an affiliate program and, if you do, how you want to go about structuring it (see Agency Fees).
Hopefully, following these guidelines will help you create a successful drop shipping business that you can utilize to its full potential. Of course, this is only a brief overview of what it takes to operate a reputable eCommerce store. If you’ve been thinking about trying your hand at drop shipping or have already made the switch and want to learn more, be sure to consult with a reputable attorney who has experience in this area.