Drop Shipping
Drop Shipping

Drop Shipping

Website Payment Pro offers dropshipping payment processing solutions that highlight the benefits and mitigate the cons of operating a dropshipping business.

Dropshippers act as go-betweens for consumers and suppliers (or companies). They facilitate transactions between the two without storing or shipping any items themselves. Each time a consumer purchases something from a dropshipper, only then does the dropshipper buy that product from a third party and arrange its immediate delivery to the customer. They therefore do not have any unsold goods. The largest example of this business model in action is Amazon.

Benefits for dropshipping entrepreneurs include:

  • The ability to work from diverse places
  • Low expenses
  • Lower start-up fees
  • No inventory to manage
  • Possibility of a sizeable product range
  • Adaptability for growth or downsizing

While there are numerous appealing qualities of this supply chain model, some of the downsides for its players are slim profits, lack of quality control, and the margin for error since dropshippers have to rely on other parties to fulfill orders. Sometimes, dropshipping ecommerce sites further extend the supply chain by employing fulfillment companies to handle orders, increasing the number of hands involved in each transaction. It's important to establish credibility by maintaining relationships with trustworthy, reliable suppliers and manufacturers who handle your orders.

Without hands-on access to the products or control over their shipping, customer satisfaction for a dropshipper can become challenging. They must have a solid system in place for tracking orders, coordinating deliveries, and addressing all buyer inquiries and requests. If a wholesaler is unwilling to accept a return, the dropshipper might have to send the customer a replacement item or a refund—or risk receiving a chargeback. Likewise, the dropshipper can't always guarantee a delivery date for the buyer until after they've placed the order, posing issues if products they need are out of stock or late to arrive. Communication and organization of the various moving parts are key to success with this business model.

Since dropshipping occurs online, the ability to accept credit cards is essential. But when you consider the risk factors dropshipping businesses are exposed to, in addition to the perils associated with operating any business entirely online, options for an affordable merchant account become quite limited. Before a merchant service provider (MSP) partners with your business, they will consider all the variables that could impact your chargeback rate because they will be liable for paying charges the business can't—chargebacks that arise due to fraud, customer dissatisfaction, merchandise not delivered, and so on. 

To sum it up, dropshipping businesses are risky investments because:

  • They outsource order fulfillment duties and have to rely on other businesses
  • With many parties involved, there is more room for error
  • It is a competitive business with just a few giants like Amazon dominating the largest market share
  • Profits are challenging
  • Delivery disputes are difficult to disprove. For example, if a customer claims they never received an item, or it arrived damaged, it is harder for the dropshipper to contest a chargeback claim
  • Transactions generally occur online, where fraud is most common

The last thing you need to deal with as a business owner is a credit card merchant account that cuts into your earnings with excessively high transaction fees. This is especially relevant for dropshipping businesses that rely on high order volumes and slim profit margins from each transaction. There are non-negotiable interchange and assessment fees the credit card networks and card-issuing banks charge for their role in the authorization and payout of credit card transactions, so much of the rate you see from payment processing providers is unavoidable since they are merely passing it through from the financial institutions that facilitate card payments.

However, the markup the MSP charges on top of interchange and assessment fees is negotiated and varies from provider to provider. Our goal is to minimize that markup and focus on building a long-standing partnership in which your business can not only achieve viability but also thrive in the competitive sector. With a dropshipping merchant account from Website Payment Pro, you get a solution that meets your specific business needs, with built-in tools to curb fraud and chargebacks:

  • Online payment gateway with customizable Advanced Fraud Detection Suite
  • Expert guidance for return policy wording, marketing, customer service, fulfillment practices, and more
  • Merchant lending and merchant cash advance alternatives
  • Next-day funding
  • Online integration assistance to create a seamless checkout experience for buyers and straightforward website maintenance for you. We help you integrate your payment gateway with applications ranging from accounting apps and shopping carts to ecommerce platforms, loyalty programs, and more
  • Accept credit, debit, gift cards, echecks, and digital funds transfers
  • Combine your online payment path with a state-of-the-art POS system if you also require in-store payment options
  • Virtual terminal for MOTO orders
  • Insightful online reports
  • Automated recurring billing to match customer financing plans
  • Level II and III enhanced data processing for B2B transactions
  • Low rate guarantee. We will beat the rate of any verified provider

Website Payment Pro offers free consultations for new and existing businesses during which we recommend a merchant services package that meets your distinct needs and contributes to your business's growth. Give your customers the ultimate convenience in payment options with the easy-to-navigate checkout experience, while your business benefits from fast funding, low rates, and no hidden fees. Partner with a payment processing provider that understands the nature of your business today.

Are you MATCH listed? Read about our options for MATCH list/TMF merchant accounts.

Streamline your dropshipping business with Website Payment Pro's tailored payment solutions. Contact us today at 1-800-304-0555 to learn more about our high-risk merchant accounts and payment processing services for the dropshipping industry.