Interest in home business is at an all time high. Or at least it seems that way. Perhaps the technology that make the Internet possible has merely give voice to the hunger for the independence that home business appears to offer.

One manifestation of this is a sort of blood lust for reliable information on product sourcing. People are looking at ecommerce as a viable means of sustainable income. And that means income free and clear of the “grid” of mainstream 8 to 5 or 9 to 5 employment. At least, this is the dream.

The most free I have ever felt was when I was a commercial fisherman off the coast of Oregon. This was a few years ago when Newport had an active port-side fish processing plant. Anyone remember the Rip Tide on Friday night after the boats had come it? The reason I felt that free is that I owed no one anything! It was a life free and clear. Off the grid. It was hard, and in the end I didn’t make that much money, but boy was I free!

That embodies how I feel about my own business. In back of this fever for legitimate wholesale dropship products sourcing is a fever for personal freedom.

The point, or at least part of the point I’m getting at, is that drop ship companies and genuine wholesale product suppliers offer a legitimate means of solving this product sourcing problem. But,

Before you start looking for dropship and wholesaler suppliers, it is important to arm yourself with some basic information that will save you time, money, and frustration.

To truly understand drop ship companies, you need to first understand what a true wholesaler business is. A wholesale company is a business with a specific license granted by its state of residence to purchase products from manufacturers without paying sales tax. The wholesaler then distributes, or sells, the products to retailers (or resellers) at a wholesale price established by the wholesaler. The wholesale price is sometimes a result of negotiation between the retailer and wholesaler. Generally speaking, the greater quantities purchased, the lower the wholesale price.

True wholesale businesses can only sell to resellers who have a sales tax permit, and this is granted to retailers by the state of residence. Tax permits, by the way, are usually free and easy to get. This means that you can always identify a true wholesaler by whether or not it requires proof of your sales tax permit. A business that does not require proof of a sales tax permit, no matter how low their prices, is not a true wholesale businesses. They are, in fact, in the retail business. That’s not to say that some retail businesses may not give you rock bottom or even below wholesale prices, but they are not wholesale companies. A wholesale company, by definition, is required by law to have proof of your sales tax permit.

Dropshipping is a service that used to be offered by wholesale companies to their reseller customers. Dropshipping simply means that the product distributor stores its inventory in its warehouse. When you sell a product, you then send payment to the drop ship company, and it, in turn, sends the product under your business name to your customer. Your customer is never directly aware of the dropshipper. This is called “blind dropshipping.”

This next point is important. Not all wholesalers are dropshippers, and not all dropshippers are wholesalers. If you are new this, please read that line over. Just because a company is a drop ship company does not mean that it is a true wholesale company. Now, they may advertise “wholesale prices,” but unless they require proof of your sale tax permit, they are just retail companies offering a dropship service. And that’s true no matter how good their prices. That doesn’t mean you shouldn’t do business with them, just that you should be aware that they are essentially a retail business.

Examples of legitimate dropship companies who are not true wholesalers would be dropshipdesign.com, shopster.com, and megagoods.com, to name a few. Examples of true wholesale companies who offer a dropshipping service would be WYNIT and DBL–two of the biggest names consumer electronics.

written by Angel \\ tags: Drop Shipping