The Ultimate Guide to Wholesale Drop Shipping for Beginners

The Ultimate Guide to Wholesale Drop Shipping for Beginners

Table of Contents

  1. Introduction
  2. Step 1: Setting up Your Business
    • 2.1. Business as Yourself (Sole Proprietor)
    • 2.2. Forming a Legal Business Entity
    • 2.3. Setting up an LLC
    • 2.4. Obtaining an EIN
    • 2.5. Getting a Resale Certificate
  3. Step 2: Finding Suppliers
    • 3.1. Using Google and Search Engines
    • 3.2. Exploring Trade Shows
    • 3.3. Analyzing Competitors
  4. Step 3: Vetting Suppliers
    • 4.1. Contacting Suppliers
    • 4.2. Opening a Wholesale Account
    • 4.3. Evaluating Product Profitability
  5. Conclusion

How to Get Started with Wholesale Drop Shipping

Drop shipping has become a popular business model in recent years, allowing entrepreneurs to set up profitable ventures without the need for inventory or upfront product costs. If you're interested in starting your own wholesale drop shipping business, this guide will provide you with step-by-step instructions on how to get started. From setting up your business to finding suppliers and vetting them, we'll cover all the essential aspects you need to know to kickstart your journey to success.

Step 1: Setting up Your Business

Before you can dive into the world of wholesale drop shipping, it's crucial to establish a solid foundation for your business. This begins with choosing the right business structure and obtaining the necessary legal documentation.

2.1 Business as Yourself (Sole Proprietor)

The simplest way to set up your business is to operate as a sole proprietor. This means you'll do business in your own name without any legal separation between your personal assets and your business assets. While this option is easy to implement, it exposes you to personal liability if any legal issues arise.

2.2 Forming a Legal Business Entity

To protect your personal assets and create a clear separation between your business and personal finances, you can consider forming a legal business entity. The most common type is a Limited Liability Company (LLC), which provides liability protection while maintaining a relatively straightforward setup process.

2.3 Setting up an LLC

Setting up an LLC is a relatively simple process that can be done independently or with the help of online services. The cost and requirements may vary depending on your state, so it's essential to research the specific regulations and fees applicable in your area. Once your LLC is formed, you'll have the legal framework to operate your wholesale drop shipping business securely.

2.4 Obtaining an EIN

After establishing your business entity, the next step is to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN serves as your business's social security number and enables the IRS to track your business activities. You'll need an EIN to open a business bank account, apply for platforms like Amazon, and facilitate other financial transactions related to your business.

2.5 Getting a Resale Certificate

A resale certificate is a crucial document that allows you to purchase products from wholesalers without paying sales tax. As you'll be reselling these products to end consumers, you're not responsible for collecting sales tax. In-depth knowledge of resale certificates is essential, as there are specific guidelines and requirements for obtaining and using them. Be sure to consult the comprehensive video linked below for a deeper understanding of the subject.

Step 2: Finding Suppliers

Once your business is set up and legally compliant, the next step is to find reliable and high-quality suppliers to source your products. Here are three common methods for finding wholesale suppliers:

3.1 Using Google and Search Engines

Google, being the largest search engine, is a valuable tool for finding suppliers. Enter specific search terms related to your product niche along with keywords like "wholesale distributors," "wholesale drop shippers," or "wholesale suppliers" to get targeted results. Look for descriptions that indicate they are genuine wholesalers, analyze their websites, and check if they offer drop shipping services.

3.2 Exploring Trade Shows

Trade shows provide an excellent opportunity to connect with suppliers in various industries. Research and attend trade shows relevant to your product niche to discover potential suppliers. While attending in person is recommended, you can also explore exhibitor lists online to gather information about participating companies and their products.

3.3 Analyzing Competitors

Analyzing your competitors' sourcing strategies is a clever way to find reliable suppliers. Identify successful sellers in your niche market who offer similar products through drop shipping. Examine their brands and search for wholesale opportunities using the brand names plus keywords like "wholesale" or "open a wholesale account." This approach allows you to tap into established supplier networks that are already proven within your market.

Step 3: Vetting Suppliers

Upon finding potential suppliers, it's crucial to vet them thoroughly to ensure they align with your business goals and values. Follow these steps to vet suppliers effectively:

4.1 Contacting Suppliers

Reach out to potential suppliers through email or other provided contact information. Introduce your business and inquire about opening a wholesale account. This initial contact allows you to gauge their responsiveness and professionalism.

4.2 Opening a Wholesale Account

If the initial communication goes well, the supplier will likely request information about your business and a copy of your resale certificate. Provide the necessary details promptly to initiate the account opening process. Be prepared to comply with any additional requirements or terms stipulated by the supplier.

4.3 Evaluating Product Profitability

Once you have access to a wholesale account, carefully evaluate the supplier's product catalog to identify profitable items. Consider market demand, competition, and profit margins to select the products that align with your business goals. By listing and selling profitable items, you'll create a solid foundation for your business's growth.


Starting a wholesale drop shipping business can be a fulfilling and profitable venture. By following the steps outlined in this guide, you'll be equipped with the knowledge and strategies necessary to set up your business, find reliable suppliers, and succeed in the competitive world of e-commerce. Remember, building a successful business requires continuous learning and adaptation, so stay proactive and explore additional resources for further expertise. Get ready to embark on an exciting journey towards entrepreneurial success!