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Bank Account and Dropshipping Credit Card

by BigLo511
5 replies
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Hello, I am currently working on starting my first ever dropshipping ecommerce site. I new to all of this and am feeling sort of overwhelemed on exactly what to do. From what I have read and researched from dropshipping is that i need to have 2 seperate bank accounts, one personal and one for business, and a credit card for dropshipping purposes. I already have a personal checkings account but I do not have another account for my business or a credit card. I'm worried about this stuff now because I contacted a wholesaler that carries products I want to offer in my store and they emailed my and application that ask for bank account information so I am assuming this is a normal procedure for most wholesalers.

1. I was wondering how I should proceed with the bank account for my business. Should just head to my bank and ask to open up another checkings account or to setup an actual business account. For some reason I think it is less cost expensive to just get a checking account vs business account. Also I am wait to setup an LLC because I have no site/sales/idea whether or not the niche I will choose will do well but I have an EIN and a Certificate of Registration in my State.


2. Also how should I proceed with the credit card for dropshipping situation. Should I set it up with my bank with the new account or seperately. Or would it be better to apply for one online with Fidelity or Capital One 360, I have heard from others that they are good cards for dropshipping for the rewards. Also was wondering was it smart to apply to Fidelity and Capital One 360 since the city where I live there is no physical location for either. I am a full time college student as well with no job so I don't know whether really plays into things as far as getting approved.



Would appreciate recommendations and advice.
#account #bank #card #credit #dropshipping
  • Profile picture of the author OnlineStoreHelp
    It all depends on how your business is structured, and how good your record keeping is.

    For example, if you are a sole proprietor, there is nothing that says you need to have a business bank account. You can just use a personal bank account and in fact, many do. Same thing with a credit card.

    What I recommend is having a separate bank account and credit card for your business just due to book keeping issues. It is much easier to determine if that charge from amazon was due to ordering office supplies or a personal book for that matter.

    If you are not a sole proprietor, then yes you will most likely need a business bank account (LLC, C Corp, S Corp), since your merchant account will be in your business name, and the bank will want an account for your business.

    If you are talking about your merchant account (credit card processing) even if you have a personal bank account and are a sole proprietor, you will most likely need to register a DBA (Doing Business As) or Fictitious Business Name so that when a customer orders, it looks like xyz.com instead of joe smith.

    Also, as long as you are not asking for trade terms (tell them you will put a credit card down to pay for all purchases) you will not need to put bank account information down.

    Does this help?
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    • Profile picture of the author BigLo511
      Thanks OnlineStoreCoach. Yea that definitely helps. Yea I'm a sole proprietor and I want to wait to get my LLC until I actually start getting sales. I'm not quite sure what you mean about trade terms and is it not a good thing to put your bank info down.
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      • Profile picture of the author OnlineStoreHelp
        Originally Posted by BigLo511 View Post

        Thanks OnlineStoreCoach. Yea that definitely helps. Yea I'm a sole proprietor and I want to wait to get my LLC until I actually start getting sales. I'm not quite sure what you mean about trade terms and is it not a good thing to put your bank info down.
        Trade terms is when a retailer buys a product but doesn't pay for it until 30, 60 or 90 days later. It is how companies like Walmart and big retailers are able to have such low prices. The wholesaler will use the bank account information in their credit decisions but if you are paying every time with credit card every time you make a purchase, you will not need trade terms. You can put it down if you want but in reality just put "NA Credit Card on File", which will tell them you will be paying with card or deposit. The only issue is if for some reason they won't take credit card but many look at credit card and 30 day trade terms as almost equal when it comes to profitability.

        There is nothing wrong with waiting on the legal structure till you are ready. I meet a ton of established businesses that still run as sole proprietors.
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  • Profile picture of the author inquitech
    It all depends on how your business is structured, that is very true.

    How much do you think you will do in sales? C corp is a way to go though!
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    • Profile picture of the author BigLo511
      I'm not sure on how I'm going to do in sale. Mainly since I'm really new to this I figure my first store will be for learning experience.
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