hi, when a customer buys do I get the money before I order from the supplier or do I use my own money and get the money after they get it?
Hi @Fellaam01 ,
Great question!
Once a customer places an order on your online store, you’re then responsible for fulfilling the order by ordering the product directly from the supplier. Depending on the payment gateway you’re using, payout times may differ, so it’s good idea to check with your gateway so you know when to expect your payouts.
If you’re using Shopify Payments, you can check out our list of pay periods by country here. It’s also important to note that payouts are not immediate.
That said, it’s strongly recommended that you have a capital reserve set aside so that you can fulfil orders immediately, instead of waiting on a payout. Most dropshippers order from their suppliers using their own funds as soon as the order is placed. The supplier can then ship the orders straight away and the merchant will receive their payout a couple of days later. Not only is this a good business practice, but it can also lower your risk against chargebacks.
While dropshipping is definitely a less expensive way to start selling product online, like any business, it’s not free. If you’re looking to learn more about the dropshipping business model and costs associated with it, I recommend checking out Oberlo’s blog post, “How Much Does it Cost to Launch a Dropshipping Store?”.