Any person can start dropshipping from the comfort of their home. In case you are planning on starting a distribution business, dropshipping can be a good option. Selling to retailers from your website will mean that the goods can be paid for, purchased and shipped without you seeing these items. To do business with more quantities and maybe earn more, you might wish to become a wholesale dropshipper. Either way, getting the appropriate permit and license is essential, and so is choosing a structure and business model.
Getting License and Permit
Almost every state requires that one gets a license before starting to sell products. Your government might necessitate you obtain a permit, albeit you are working from home. In the event you have to charge on the receipts from sales in your US state, then you must also register your business for sales tax there.
A reseller’s permit allows you to buy goods for second-time sales, without having to pay tax on these products.
Choosing a Structure
Your business set up will determine how it applies for permit and license. If you own and are responsible for your business’s debts, then your own social security number (SSN) can be used. In most cases, however, you have to think about incorporating that business.
Setting up an LLC takes some amount of money and time, and it can be trickier to calculate taxes for it. Even so, you will not be personally responsible for that business’s debts or financial liabilities. In other words, you will not have to take money out of your pocket to settle those liabilities if this is your business structure.
Choosing a Model
Three things will determine your business model.
- The products you wish to sell
- The place from which you will get these items
- The customers to whom you will sell these
The matters except the last one are usually related. For instance, if you wish to sell a steering wheel cover made of leather, you should find one who produces it and is ready to sell it in bulk to you or a distributor of it.
The third matter decides how you will establish your business. In the event you wish to become a wholesaler that dropships goods to customers for retailers, you will do the job of a distributor. Conversely, if you wish to have goods dropshipped directly to your buyers, you will act as a retail business.