Drop-Shipping Companies

Dropshipping: A Growing Opportunity with Challenges

Thanks to dropshipping, anyone with a website can start a retail business. Quick, easy, and low-cost to set up, the dropshipping business model is enjoying explosive growth. The US dropshipping market was worth $44.1 billion in 2021. With the right marketing savvy, you can generate plenty of revenue in America’s $500 billion ecommerce industry.

Dropshipping requires little capital and no inventory, making it the ideal low-risk business. Banks, however, think otherwise. Most traditional banks don’t offer merchant accounts for dropshipping businesses because they consider this industry to be high-risk. Without a merchant account, you will struggle to sell online and run a viable ecommerce business.

With extensive expertise in high-risk industries, Safe Merchant Solutions can help you get a merchant account within days. Check out our range of high-risk payment gateways for dropshipping businesses to find the best solution for your needs:

Why are Dropshipping Businesses Considered High-Risk?

From budding entrepreneurs to retail giants, everyone is adopting dropshipping to generate a new revenue stream. While this supply chain model provides many benefits to businesses, the industry is not without its problems. Several factors make this industry high-risk to banks. Here are some reasons why you can’t get a merchant account for your dropshipping business:

• Ultra-Competitive Industry: The same low barrier to entry that makes dropshipping attractive is also what makes it highly competitive. For every product you offer, there are zillions of other businesses that sell the same exact item. And worst of all, the industry is dominated by giants like Amazon. This makes it very difficult to run a successful dropshipping business.
• High Rates of Fraud: A high-risk payment gateway for dropshipping is necessary to combat excessive fraud in this industry. Because you don’t own any stock, dropshipping only works as an online business. And to run an online business, you must process card-not-present (CNP) transactions. Fraud is 81% more likely with CNP transactions compared to in-person payments.
• Customer Dissatisfaction: Another reason why banks don’t provide merchant accounts for dropshipping businesses is the high rates of customer dissatisfaction in the industry. With no inventory and fulfillment services, drop-shippers have no control over the supply chain. Selling out-of-stock items, uncertain delivery times, and returns problems lead to plenty of unhappy customers and chargebacks.
• Low-Profit Margins: Yes ⏤ you don’t buy any inventory and the supplier takes care of fulfillment. Since you’re outsourcing most of the business, you won’t generate much profit. If your business goes bust, your bank or processor is responsible for paying off chargebacks. This is why financial institutions shun the dropshipping industry.

How Can Safe Merchant Solutions Help Dropshipping Merchants?

Safe Merchant Solutions has more than 15 years of experience helping businesses thrive in high-risk industries. We know all the challenges you face and have developed many solutions to help you overcome each problem. Leveraging our close relationship with more than 25 banks, we’ll underwrite your business and help you get a merchant account for dropshipping within days.

Getting a merchant account does not mean your troubles are over. In an industry with high rates of fraud and customer dissatisfaction, keeping your merchant account is the real work. Safe Merchant Solutions provides state-of-the-art chargeback mitigation technologies and dispute management solutions to protect your account from the risk of termination.

Our High-Risk Payment Gateways for Dropshipping Businesses:

• Have a quick approval process
• Provide the lowest-cost processing fees
• Come with a secure, PCI-compliant platform
• Offer maximum protection against chargebacks
• Process credit card, ACH, and eCheck payments
• Easily integrates with your ecommerce website and other applications

Create a Merchant Account for Dropshipping Today

Are you struggling to get a dropshipping merchant account? Is your current account provider devouring your profits with excessive fees? Whether you’re a new or established dropshipping business, Safe Merchant Solutions can meet all your payment needs. Sign up for your free trial now to see how our platform can help you grow. And don’t forget to contact us if you need more help.