Should a dropshipper charge a set-up fee?

Full Member
stuckeytabitha
Posts: 59
Joined: 26 Nov 07
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28 Mar 13 03:48:53 pm
I have been looking at some dropshippers and considering do a little dropshipping, but read that its a bad sign if they are asking for a set-up fee of money on the front end. Is this true?

Site Admin
richelle_salehoo
Posts: 5224
Joined: 20 Oct 08
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29 Mar 13 01:38:01 am
Hello stuckeytabitha,

Some of the drop shippers in our directory do charge small account set-up fees.

While by no means ideal, a small account set-up fee is fairly common practice among drop shippers. In most cases we can understand the charge because it costs the drop shipper time and money to process a new account.

That said, not all drop shippers in SaleHoo charge a fee. And even if an account set-up fee is charged, you can often get around it by purchasing through the wholesale area of the site rather than the drop shipping area.

Hope that helps - please let me know if you have any further questions.


Richelle

Customer Support Manager
SaleHoo Group Limited
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Full Member
fm1234
Posts: 838
Joined: 14 Dec 05
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2 Apr 13 08:34:38 pm
I have mixed feelings on upfront fees, but I don't consider them a bad sign per se. It really depends on other factors, not the fee itself; for example:

1) Many dropshippers and wholesalers who charge a registration fee refund it as a credit towards your first order. The purpose of this is pretty simple -- it weeds out time wasters and dreamers and saves them endless hours of dealing with people who will never, ever place an order.

2) Different sites have different levels of access for non-members. If you can't see any prices, availability, order terms, freight costs etc. without paying a fee, generally I'd say try to contact the company to get this info. If you can't get serious and concrete info about the availability, prices and shipping of anything in the store without paying a fee, I wouldn't bother with them as a general rule of thumb (unless you can find significant positive feedback about the company online.)

3) Don't be afraid to ask what the fee is for, especially if you don't get it back (if you get it back, it's kind of obvious what it's for.) Some company that charges hundreds of dollars for registration, doesn't offer it back, but has an affiliate program that pays based on sales of memberships, should be avoided like the plague - they're clearly building their business model on the membership sales, not the product sales. There's nothing wrong with selling memberships, but experience and the sordid history of e-commerce all but dictate that most companies can't make a business out of both ends. Their focus should be on being a supplier, not on being a community (by contrast, if Salehoo started suddenly selling pallets of sunglasses or whatever I would just laugh it off, since their strength and indeed their entire business model is based around being a community, not a supplier.)


Frank


"Failure is not when you fall down. Failure is when you don't get back up."

--J.J. Luna
Full Member
stuckeytabitha
Posts: 59
Joined: 26 Nov 07
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3 Apr 13 06:46:21 am
Thanks Frank for the input! I've been wondering when I would get your attention :-) You always respond to my posts with great insight but I hadn't heard from you lately. I appreciate it!

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