How to Start an Online Drop Shipping Store

by George N. Root III; Updated September 26, 2017

Working from home and becoming your own boss will always have a strong lure; many people have turned to online retailing as a way to create their own business. You'll need to follow a few specific steps before you can open for business as an online drop shipping retailer—and that's just the preliminary work before you start the marketing and advertising. While an online drop shipping retailer business requires less cost than a standard brick-and-mortar store, you'll still have plenty of work to do.

Starting a Drop Shipping Online Store

Step 1

Contact your local government offices to see what business licenses you will need to open a business. An online business requires the same certification as any other business, and you will need a business certificate to open bank accounts as well. Ask your state office of taxation about the need for a retail tax certificate. With an online business, you may or may not need to collect sales tax; you'll need to check into it and collect the tax where applicable.

Step 2

Open a checking and savings account with a local bank, and get a major credit card in the business name. This will allow you to help keep your personal and business financial information separate. Open business accounts with the major Internet payment options such as Paypal, which will allow you to accept payments from customers who use these services. Failing to allow customers access to these popular payment options could cost you business.

Step 3

Research the various wholesale drop shippers that deal with the products you have decided to sell, and then contact each of them about opening an account. Make sure each drop shipper offers you the option of drop shipping directly to your customers with your company name on the paperwork, the payment options you need for your business, and the stock levels you will need. Because you will not stock product yourself, establish service with at least three or four wholesale drop shippers to supply your customers with product.

Step 4

Set up your company's website. If you have website building experience, you may want to try creating your site on your own.If you have no experience in setting up an online commerce site, however, you may want to sign up for a website service that will build and maintain your site for you. With one set-up fee and a recurring monthly charge, you can have a site set up and operating to your specifications within a couple of days.

Tips

  • Make sure you have some operating capital to back you up when you start. You will need it to pay for business certificates and the setup of your website.

About the Author

George N. Root III began writing professionally in 1985. His publishing credits include a weekly column in the "Lockport Union Sun and Journal" along with the "Spectrum," the "Niagara Falls Gazette," "Tonawanda News," "Watertown Daily News" and the "Buffalo News." Root has a Bachelor of Arts in English from the State University of New York, Buffalo.