Martin Neumann at the Home Office Voice blogs about using credit card financing for your home-based business. It’s an excellent read – check it out. One spin I can put on the use of credit cards in a home-based business is where drop shipping is used.
If you’re using drop shipping to provide products to your customers, you’ll almost certainly have to pay your drop ship suppliers with credit cards (at least in the beginning). This requires the pro-active use of your credit card and the careful management of the credit card billing cycle to ensure that your balance is paid in full to avoid cyclical finance charges. If this sounds like a lot of work, well it can be depending on your credit limit and the cost of the merchandise you’re drop shipping.
As soon as possible, it’s best to approach your drop supplier about getting payment terms directly with them. You won’t be able to approach them on this subject until you’ve established some history with them, but once you’re thrown some business their way they’re usually more than happy to talk with you about it. I’ve found that one year after we’ve started doing business with our suppliers seems to be the right time to approach them for terms. In any case, don’t expect them to offer it to you without asking. Ask them. It will make the management of your drop ship orders much easier.
For more information on how drop shipping is used in a home-based business, see my previous post here.