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Need Advice Re. Credit Card Use

Discussion in 'eCommerce' started by Rayzen, Oct 10, 2017.

  1. #1
    I am in the process of setting up an online drop shipping website. I have almost finished designing the website, using WordPress and have lined up a few drop shippers to supply me with some products, although this is a work in progress, as it will probably be from here on out.

    However, starting a drop shipping business presents a conundrum: In order to get many drop shippers to supply you with their products, you need to have established merchant credit; however, because you are just starting, you don't have such credit. You need credit to start the business, but you can't start the business until you have the credit. What to do? It's a 'Catch-22,' if there ever were one. Thus, my first question: How does one handle this seemingly impossible problem?
    SEMrush
    Alternatively, some drop shippers will drop ship their products for you, if you purchase them with a credit card that you have place on file with them, when you fill out your drop shipping agreement with their business. However, giving out one's business credit card numbers, including the expiry date, and all the rest, is a little scary in this day and age of identity theft and hacking. Does anyone have any experience with this situation? I would rather hear from those who have actual experience, rather than a lot of speculation from those who have never dealt with the problem. So, my next question: Based upon your actual experience, what are your thoughts about using a credit in such a way, in order to start a drop shipping business?

    Any helpful suggestions would be greatly appreciated.
     
    Rayzen, Oct 10, 2017 IP
    SEMrush
  2. jestep

    jestep Prominent Member Premium Member

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    #2
    Use a personal or business credit card or find some other source of capital you can use to make purchases with your suppliers.

    I'll say that if you have zero capital, this is a really risky business model. Fraud is inherently a part of ecommerce. If you're floating your books in a way that you can't survive a chargeback every now and then, it can easily turn into a situation where one purchase is paying to purchase the previous one, which isn't sustainable.
     
    jestep, Oct 17, 2017 IP
    sarahk likes this.
  3. Rayzen

    Rayzen Peon

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    #3
    Hi Jestep.

    Thanks for the answer. So far, you're the only one who has replied in a week's time.

    However, from what you said, I'm not sure that I was clear enough in my post about my question. You said, "Use a personal or business credit card or find some other source of capital you can use to make purchases with your suppliers." I do have a business credit card which I obtained, in order to purchase products from my wholesale suppliers. But my question was one regarding how to use that card. I am new to this whole domain of ecommerce and am naive about even the very basics, so please bear with my naivete and simplistic questions.

    I will try to restate my question in a, hopefully, clearer way: In trying to line up some suppliers, I have discovered that some of them want me to send them my complete business credit card information (name, number, CVC, expiry date, etc.), which just seems crazy to me. Who would put such information out 'there?' Like you said, I'm sure that fraud is inherently a part of ecommerce. Is it normal for there to be such business-to-business trust? I am not that trusting in this day and age of low morals.

    I have assumed that the normal sequence of events to transpire during a drop shipping purchase would be somewhat as follows:
    1. Customer visits my website, sees an item he/she wants, then purchases it with his/her credit card.
    2. I receive the order, then forward it to my supplier, immediately paying for it with my business card. The supplier is privy to none of my business credit card details.
    3. The supplier, seeing that my payment clears the bank, then fulfills the order, sending it to the customer with my business logo on the package.

    If I am correct in this assumption, then there would be no need for me to post my business credit card information with the supplier, thereby compromising the card's security. It would seem, to me, that any supplier who requires you to give them the entirety of your business credit information is being 'a bit' demanding, and not one with which to do business, but then maybe such a thing is done; that is what I'm questioning.

    Thanks again for your time and trouble in reading my question.
     
    Rayzen, Oct 17, 2017 IP
  4. sarahk

    sarahk iTamer Staff

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    #4
    There are all sorts of requirements from the banks if you hold someone's credit card details - therefore the drop shippers should be able to verify that they have the certification to request that info. However, they're probably not running "clean" and your concerns are justified.
     
    sarahk, Oct 17, 2017 IP
  5. Rayzen

    Rayzen Peon

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    #5
    Hi Jestep.

    Thanks for the reply. You're the only one to answer in a week's time.

    However, I think that I was not very clear in my original post, so I will try to clarify, here:

    In your response, you said, "Use a personal or business credit card or find some other source of capital you can use to make purchases with your suppliers." I do have a business credit card, which I got with the intention of using it to purchase from suppliers. My question was about how to use that card.

    So, hopefully, I will clarify my question so that it makes more sense to you:

    In trying to line up some suppliers, I have discovered that some of them want me to send them my complete business credit card information (name, number, CVC, expiry date, etc.), which just seems crazy to me. Who would put such information out 'there?' Like you said, I'm sure that fraud is inherently a part of ecommerce. Is it normal for there to be such business-to-business trust? I am not that trusting in this day and age of low morals.

    I have assumed that the normal sequence of events to transpire during a drop shipping purchase would be somewhat as follows:
    1. Customer visits my website, sees an item he/she wants, then purchases it with his/her credit card.
    2. I receive the order, then forward it to my supplier, immediately paying for it with my business card. The supplier is privy to none of my business credit card details.
    3. The supplier, seeing that my payment clears the bank, then fulfills the order, sending it to the customer with my business logo on the package.

    If I am correct in this assumption, then there would be no need for me to post my business credit card information with the supplier, thereby compromising the card's security. It would seem, to me, that any supplier who requires you to give them the entirety of your business credit information is being 'a bit' demanding, and not one with which to do business, but then maybe such a thing is done; that is what I'm questioning.

    But then, in second thought, everyone routinely puts all of their credit card information online, when making purchases with Amazon or whoever, so it doesn't seem like such a crazy thing to do, after all. What seems like a totally crazy thing to do is actually routine business in the online world of ecommerce. So, what to do? It seems like taking a huge risk, putting your credit info online, but, since it's the norm, maybe it should be the way to go...with the oft-repeated caveat of checking the credit card's activity each and every day.

    Thanks again for your time and trouble in reading my question.
     
    Rayzen, Oct 17, 2017 IP
  6. Rayzen

    Rayzen Peon

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    #6
    Hi Sarah.

    Thanks for your help. I didn't realize the banks have such requirements, but it makes sense, and I'm glad that they do; that knowledge makes me feel a little safer. I wonder where I could learn more details of that whole issue.

    So, considering that information, what's your recommendation? When establishing an account with a supplier who asks for such credit card details, how do I then ascertain whether or not they truly have such certification? I guess the only way to be halfway certain would be to ask for a fax of their certification or something. How is that normally handled? Simply taking their word that they are certified by the bank would seem to be a bit risky and unprofessional.

    A second question: When you said that they're probably not running 'clean,' and my concerns are justified, what did you mean? Did you mean that it's probably the norm that most suppliers most likely just bypass such certification for one reason or another, such as pure laziness or whatever? I would imagine/hope that most suppliers are legitimate, but many are probably not jumping through all of the financial world's hoops.

    Thanks again for your help. I'm new to all of this and am very grateful for hearing from those with experience.
     
    Rayzen, Oct 17, 2017 IP
  7. sarahk

    sarahk iTamer Staff

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    #7
    We just got certified for PxPay through http://paymentexpress.com/ and we had to jump through hoops even though we don't store payment information. Ensure they use a legit payment company and go to that company to verify the account exists and find out what their chargeback process is. If they're any good they'll have policies that favour the user. Good for you in this relationship, bad for you when users start doing fake chargebacks.
     
    sarahk, Oct 17, 2017 IP
  8. chrislim2888

    chrislim2888 Active Member

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    #8
    You could ask the dropshipper vendor if they are PCI/DSS compliant. The need have the certification if they request for your credit card information to store and process. https://www.pcicomplianceguide.org/
     
    chrislim2888, Oct 23, 2017 IP
  9. Rayzen

    Rayzen Peon

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    #9
    Hi Chrislim. Thanks for your reply.

    So how do I ascertain that they are truly PCI/DSS compliant? Is there some kind of method for verifying their compliance with some agency, such as checking their account name and number? Just taking their word, obviously, not be advisable.
     
    Rayzen, Oct 23, 2017 IP
  10. chrislim2888

    chrislim2888 Active Member

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    #10
    There is certificate awarded to them if it's PCI/DSS. You may request the soft copy from them to confirm.
     
    chrislim2888, Oct 24, 2017 IP
  11. Rayzen

    Rayzen Peon

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    #11
    Okay, well, I guess that sounds like about the safest route to follow.

    I feel like the underdog, here, because I'm the one reaching out, depending upon someone else who has the products and would be willing to let me be, basically, a part of their business. For that reason, I'm reticent to be somewhat demanding in asking for proof that they are legit. But then 'business is business,' as they say, so considering the fact that the supplier will also benefit from increased sales of their products, I know that I shouldn't feel the way I do.

    This is the first time that I have ever ventured into the world of business and am not setting up a drop shipping site for my own profit, but rather as a way to help my son who had to quit his job, in order to become a full-time caretaker for his autistic son (my grandson), thus losing his income. As you can tell, I don't know what I am doing, so all the help from others who know what they are doing is sincerely appreciated more than you know. I just hope that it works, no matter how little it might bring in.

    Thank you again for your advice.

    Ray Cole
     
    Rayzen, Oct 24, 2017 IP