Drop shipping is one of the smartest business ideas caused by improvement of online communication. It’s a business that allows you to get in touch with a supplier who will ship the products to your customer. You don’t need to own the product before selling them online – you’re practically an online middleman for retailing various products.

But ease of transaction with potential earnings is not always a possibility in this type of business. You could end up losing clients and your business will be ruined if you’re not careful on how to conduct this type of business.

1. Extensive background research - the first order of business in drop shipping is to extensively check the background of your wholesaler. They should be properly registered with the Better Business Bureau and already have a good reputation online with other sellers. You could easily lose money if you ignore background research.

2. Information is business - drop shipping is all about knowing the right wholesaler who can send the products you ordered in behalf of the customer. Don’t just give this information away to other businesses since this can single handedly destroy your earning potential as you increase competition.

3. Know the exact shipping timeframe - when you’re drop shipping, you have to know when the product will arrive or else you’ll lose customers. Be sure to have this data from your wholesaler. This information is very important so that you can have an accurate estimate when the product will arrive to your customer.

4. Avoid extra fees from wholesalers - there are wholesalers who will ask for additional fees just to access their inventory or even the list of items sold. Avoid these companies since there is a big chance they can be a scam or might not have an impressive list of items that you can sell online.

5. Be careful with international sellers - There are actually international wholesalers that are more than willing to drop ship their products in other countries. While this sounds a good deal, be sure to check their reputation and shipping date because you might end up with no product to send to your customer.

6. Be truthful about drop shipping - this rule is only strictly implemented in eBay but should be your personal practice to ensure reputation. Telling your customers that you are drop shipping products will give your customers the idea that you are merely a middle man which means you have limited control on the product.

7. Follow-up your customers - after successfully shipping the product to your customers, ask them for their opinion about the product. This is a good way to know if your wholesaler can actually send a quality product.

8. Handle customers complaints - unless you’re trying to ruin your business, never avoid customer complaints. Complaints will always happen in a business and success is based on how you handle them. Don’t just push your customers to the wholesaler or else you’ll lose customers and your source of product will be revealed.

9. Variety as a factor - don’t just settle for a single product with a single supplier. A good business should be able to offer a variety of products and with different suppliers, you’ll be able to browse through the best price possible.

10. Become a customer - before offering their products to other customers, be a customer first. Purchase a few products from the company to personally know the quality of the product, timeliness of shipping and the overall experience you have with the company. Directly proceeding to drop shipping can destroy your reputation since you don’t know the exact quality of the products you sell.