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  1. #1
    Member
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    January 18th, 2005
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    113
    Hello, everyone.

    I am in contacts with a manufacturer about starting a dropshipping relationship. I have what is probably and embarrasing question. The information I received says:

    "For drop ship you need an account in good standing with terms of either net 30 or a credit card on file"

    ... what is "Net 30"? They also mention it in their "TERMS":

    TERMS: Payment due before shipping. Net/15 or Net/30 on approved/established credit.

    What is all this "NET" stuff?! Thanks!

    Jason

  2. #2
    Resident Genius and Staunch Capitalist Leader's Avatar
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    January 18th, 2005
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    12,817
    As I recall, that works like this: If you pay up within the NET time frame, it doesn't cost you extra.

    But if you pay slower than that, they start charging interest.
    There is no knowledge that is not power. ~Hemingway

  3. #3
    Internet Cowboy
    Join Date
    January 18th, 2005
    Posts
    4,662
    That's right, Leader. Net 30 means basically that all monies owed are due within 30 days and are considered late after that.
    Jason, I ran a drop ship operation for several years and here are the issues you need to deal with on a daily basis:
    -Many drop shippers have several days of lag time before the item is shipped, in the meantime you have charged your customer's card, this makes them mad
    -Lost shipments must be handled by the shipper, therefore you rely on the shipper to deal with problems quickly. Once again, if the don't, your customers get pi**ed off.
    - Some drop shippers don't have positive means of letting you know that an item sold out before they could ship it. If this happens, your customer gets really angry because you have charged them and now you must tell them (after charging them) that the item is not available.

    In a nutshell, drop shipping can be wonderful but you must be very careful who you rely on in a drop ship relationship because they can make you look real bad in the eyes of your customers.

    Many online shoppers will not buy from you if they can tell you are drop shipping due to bad experiences they have had in the past.

    I do the affiliate method only. My phone doesn't ring, my customers don't get mad at me, and in the final analysis (after paying shipping, dealing with returns, and other misc. expenses) I make about the same percentage at the end of the day.

    Just words from my experiences with drop shipping.

    Best of luck,

    Scott


  4. #4
    Member
    Join Date
    January 18th, 2005
    Posts
    113
    Scohaz,

    That you for the great information. From your post, I have compiled a list of things to ask the merchant before establishing a relationship with them.

    Thanks!

    Jason

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