Starting a dropship business is not a dauntingly uphill task. All you need is the right kind of resources and a bit of research. If one were to draw up a flowchart of things to do to start a dropship business then you would only need to decide the items or products that you wish to sell, decide which medium, website or websites that you would use to sell the products, choose one or more dropship companies or suppliers and start selling. Albeit there are management aspects wherein you have to keep amending your list of products, stay upbeat with the best prices and keep altering your marketing strategies.
There is only one point of contention in the flowchart that has not been aforementioned. That is a Tax ID. Dropship companies would need you to have a Tax ID, a sales tax id to be specific, for you to do business with them. Getting a Tax ID requires money, there is some fairly extensive paperwork and you would also need to properly audit your sales records and keep paying taxes, as per the various statutes. Not many people, especially those who are just planning to start a dropship business for the first time, would be interested in either making the investments to get a Tax ID or in going through the entire process of applying, getting approved and bookkeeping that a Tax ID would demand.
Dropship companies would not deal with sellers or wholesale suppliers that do not have a Tax ID and from that perspective you wouldn’t be able to get started unless you have one. But there is a solution to the situation. You can start a dropship business without having a Tax ID, for which you would need to work with buying agents. There are many companies and independent buying agents who facilitate the procurement of products and services from dropship suppliers. These buying agents have their Tax IDs and work on very nominal commission. The commission wouldn’t hurt your profit since you are not indulging in any futile expenses. These buying agents will help you to get the wholesale costs and you can go about the dropship business just as how you would do it had you dealt with the dropship companies directly.
As you start establishing your business, you can always apply for the Tax ID and pay for it from your revenue and start procuring from dropship companies directly.