Thinking of Starting a Drop Shipping Store? Read this

Thinking of Starting a Drop Shipping Store? Read this

July 27, 2017 E-Commerce,Planning

Shopify is one of the leading platforms for hosting a drop shipping store, well, any type of e-commerce store for that matter. While hosting over 370,000 stores (and counting), they also promote and encourage starting a drop shipping store. Don’t get me wrong, Shopify is a great, user-friendly platform, making it easier to run your store no matter the type. However, there are a few tradeoffs to consider.

One of the major drawbacks, as you may know, is that Shopify’s payments are powered by a processing company called Stripe. Even though Shopify encourages having a drop shipping store, Stripe classifies it as a “high-risk business”. Here’s why: When you registered with Stripe, you agreed not to accept payments in connection with prohibited businesses such as travel businesses, multi-level marketing programs, social media follower sells, any drug paraphernalia, and lastly, drop shipping. You can view a completed list here.

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Because of that, you may want to think about changing payment processors for your drop shipping store. Continuing to process through them can cause you to incur fees and, at worst, have your account shut down. Most stores have no issue running with Stripe, but others aren’t so lucky and end up with their accounts flagged for review, resulting in the account being terminated.

There is a silver lining to this potential problem, though. As an alternative payment processor, Paypal is available for use in your drop shipping store. Unlike Stripe, they do not list dropping shipping stores as a prohibited business.

So what do you say? Is Stripe right or wrong for listing drop shipping stores as a high-risk business? Let us know in the comments!