How do I pay suppliers in a drop shipping business?

[california_b]

Hello I'm wanting to start my own my own drop shipping business and have been watching a ton of videos on shopify compass but my i keep getting confused on paying supplier? do i give them any money up front for the order?

for example if i where to find a product on orberlo then want to sell it would i contact the seller and pretty much just ask for permission to sell ? when somone orders off my store do i fulfil the order with my own money? its kind of confusing i would like some help

[Ava]

Hey, @california_b!

I'm Ava from Shopify, I'd like to help you out here.

These are all great questions; dropshipping is a well-established business model to tap into, but it can be a little confusing to get through the initial set-up. Suppliers who list their products on AliExpress know that other sellers will be using their products for dropshipping purposes. They usually have a few thousand products in stock, and expect other sellers to buy from them in bulk - so you would not need to ask for permission first. 

The normal flow would be:

1.  The customer buys a product from your website, a product you've listed on your store from a seller on AliExpress. They pay you at this stage for the product.
2.  You can then buy the product in question from the AliExpress seller. You can do this using your own funds, or you can wait for the customer's funds to be deposited into your account and use those funds instead of your own. Using your own funds is usually faster than waiting for the customers funds to hit your account, but that choice is yours!
3. The seller will accept your order, prepare the shipping, and then ship the product(s) to the customer at their home address on your behalf.

There is a guide here from our YouTube Help Centre that goes over how to fulfill and order using Oberlo, it will walk you through the steps!

So you do not need to ask for permission to sell first, and with regards to the payment: you can use your own funds to speed up the process (as AliExpress can sometimes have long shipping times), or you can wait until the customer's funds are sent to your account so you can use those funds instead. 

Have you decided on the kinds of products you'd like to sell yet? I'd love to hear more about your business!

Speak soon!

Ava
Social Care | help.shopify.com