Basic Dropshipping Question

osp2018

osp2018

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Example #1: Lisa buys an Iphone case from my dropshipping store. I get an alert that I received a new order. Where is the money coming from to use to pay the Aliexpress dropshipper? (Typically isnt there a 1-2 day wait for payment processors to release the funds to my bank)
 
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You mean, where are you getting the funds to pay for the products and ship to your buyers?
If the funds you receive are not readily available to you, you need to use your own funds for sure.
 
Yes, you need to have some capital ready to cover some orders yourself so you can place the order as fast as possible from AliExpress so they can ship it!

If your business side is not done, company created etc, funds from orders can take time to end up in your bank account...
 
masipag said:
You mean, where are you getting the funds to pay for the products and ship to your buyers?
If the funds you receive are not readily available to you, you need to use your own funds for sure.
Click to expand...
GenesisHype said:
Yes, you need to have some capital ready to cover some orders yourself so you can place the order as fast as possible from AliExpress so they can ship it!

If your business side is not done, company created etc, funds from orders can take time to end up in your bank account...
Click to expand...

Thanks for your responses. The youtube videos i've been watching never cover this. Based on these replies , I can imagine paypal account freezes could be potential for massive headaches.
 
masipag said:
You mean, where are you getting the funds to pay for the products and ship to your buyers?
If the funds you receive are not readily available to you, you need to use your own funds for sure.
Click to expand...
Yes right
 
Yes sometimes they don’t tell you everything... :(
PayPal will most likely freeze your funds in the beginning, happened to me too.
Cheaper products is easier to cover
 
nakamura said:
It's coming from you.

Basically what you are doing is reselling.

She pays you $20.
You buy the item on Aliexpress for $5 and send it to her directly.
You keep the $15 profit.
Click to expand...

This almost makes me nervous of being "too successful." With a wave of orders and failure to deliver due to a payment processor issue or dropshipper problem could spell years of financial ruin. I see guys mentioning making 10k a day. How do we prevent this? (if at all)
 
Yeah this is the stuff they don’t tell you!! Instead you hear:

“Make money with dropshipping- it’s easy and you don’t need any money to start!!”

Well you do. You need some capital to cover the orders when PayPal or which ever payment method you use is pending payment. Plus you need hosting, domain, website & advertising etc so you can’t actually start without $$
 
osp2018 said:
This almost makes me nervous of being "too successful." With a wave of orders and failure to deliver due to a payment processor issue or dropshipper problem could spell years of financial ruin. I see guys mentioning making 10k a day. How do we prevent this? (if at all)
Click to expand...
Start small and build up trust with your payment processor.

Years ago when I was starting off I got all my friends and family to place an order. I never fulfilled the orders but they all paid and acknowledged the item.

it was a start.

if you are worried about being to successful put a stock limit in place that you can afford. Then turn off adds oraccept back orders. Try and stagger your sales so that you don’t have to pull out a big amount of cash just at the time you don’t have them.

also manage your customers expectations from the start delivery will be this long and use a follow up sequence to keep in touch with them.
 
osp2018 said:
Thanks for your responses. The youtube videos i've been watching never cover this. Based on these replies , I can imagine paypal account freezes could be potential for massive headaches.
Click to expand...
Nah, 99.9% of those videos are fake so don't expect anything.
 
osp2018 said:
This almost makes me nervous of being "too successful." With a wave of orders and failure to deliver due to a payment processor issue or dropshipper problem could spell years of financial ruin. I see guys mentioning making 10k a day. How do we prevent this? (if at all)
Click to expand...
If you are using paid traffic: Just limit the ads so you won't get too many orders.
If you are using organic traffic (SEO, social media): Put a stock limit

Its important to find a reliable seller. So the best would be to send a message to the seller on Aliexpress. Another way to figure it out is by checking the reviews, how many sales he got etc.

About the payment processor: Try to avoid Paypal, because they might limit your account and freeze your funds. Many payment processors don't like dropshipping because its high risk for them. For example Stripe. Don't put all your eggs in one basket.

Also if I would do dropshipping and do paid ads, I would focus on high price items. Just a few sales (less risk to get your paypal account etc. limited and chargebacks) with a high-profit margin. Making hundreds of sales every day with a profit margin of $10 or less is not worth it and you might feel really stressed, especially if you come across toxic customers
 
Depends on your setup.
If your supplier accepts Paypal you can buy it straight forward from your balance. (If you don't have the 21days old)
 
IG Professor said:
Depends on your setup.
If your supplier accepts Paypal you can buy it straight forward from your balance. (If you don't have the 21days old)
Click to expand...
What about payoneer, transferwire and other payment options?
 
Start small, always upload your tracking numbers, take invoices from your suppliers, have good customer service to minimize chargebacks and you will avoid payment gateways suspending your account
 
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