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Drop Ship Wholesale: Will Wholesale Dropship Work On eBay?

Will the drop ship wholesale model truly work on eBay? After all, everybody wants to sell with dropshipping. There's zero risk because you don't order the merchandise until the items is ordered and paid for. Plus, there's no shipping because the dropship handles that part of the exchange.

Here are the steps for a dropship business on eBay:

Set up a drop shipping account with a manufacturer or wholesaler ---> Decide on the price --->

List & sell on eBay ---> Collect payment from buyer --->

Place order with dropship wholesaler and make payment for merchandise --->

Dropshipper mails merchandise to buyer (preferably, with your contact information on the order)

Here's what you need to make this work:

A legal business entity of some kind. Drop ship wholesalers are careful who they work with. They don't want to deal with a dishonest person who will cheat customers and embroil them in legal problems. You need two pieces of information to set up an account:

* A federal tax ID or an EIN number. This is the business parallel of a Social Security number. Besides, it's better for you to use your EIN number rather than your personal information.

* In the US, you need a state tax ID, otherwise the dropshipper must charge sales tax to you (if applicable). This eats into your profits and you don't want to lose any potential income. US residents are responsible for collecting taxes from their own state and in some states, gross sales must be reported to the state and county for business licenses.

If you are not in the US, you will need to check your local and national requirements.

Some wholesalers require both of these and others require only one document. Before getting into a drop ship wholesale situation, make certain you've asked the tough questions like ...

How to choose a drop ship wholesale company.

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