What is a wholesaler?
A wholesaler is essentially the supplier who buys directly from the main distributor. Wholesalers often buy products in excessively large quantities, which they then sell to retailers or online store owners in smaller quantities, even in quantities as low as one item at a time.
However, you can also access wholesale prices directly from some providers. For example, a small business may be so small that it offers direct wholesale prices to both retailers and online store owners.
What is drop shipping?
Drop shipping is an innovative method of order fulfillment, ideal for eCommerce stores. It allows you, the online store owner, to place items on your website for sale, without the need to have any inventory on hand. When an order is placed, you send the required information to your supplier and they send the order directly to your buyer. Most of the time, they make it look like the order was shipped from their fulfillment center and will never print your name on the delivery notes. This is known as blind shipping.
How do drop shipping and wholesalers connect?
If you launch an e-commerce website with the intention of keeping only minimal or no inventory on hand, then you will create a partnership with a wholesale provider that offers drop shipping services. When a customer places an order with you, you pay the supplier their wholesale price and keep the profits. Since you only pay wholesale prices, you can determine the markup for most products. Remember to always consider the shipping cost that you will have to pay to the supplier to send your order.
What are the benefits of drop shipping?
The reason many ecommerce website owners choose drop shipping is because it allows much less overhead and saves a lot of time. Here are some of the advantages over buying wholesale stock in bulk:
- Sell a wider variety of products, without a major financial investment and without having to pay for any products in advance.
- Eliminate the time it takes to ship products
- Sell hundreds of products at once, without having any inventory on hand
- Manage your business from anywhere with Internet access
Will I get good wholesale prices with drop shipping?
This is a very common question that many people ask. Most people unfamiliar with drop shipping can expect to get the same lower wholesale prices when buying in bulk, which is not the case.
When you buy from a drop shipping provider, the wholesale price will be slightly higher than the price when buying in bulk from a wholesaler or manufacturer.
For example, if you buy a large pallet of electronics, you can spend $ 5,000 up front for the entire pallet, but if you buy from a drop-shipping company, you’ll pay for each item one by one as you sell them over time. These companies will generally increase their wholesale prices to cover the overhead of storing the products and handling and packaging the products for shipment to their customers.
Compare your drop shipping price with the market
The best way to determine if you are getting good prices so that you can make a decent profit is by comparing your wholesale prices to those listed on eBay and Amazon.
When comparing your wholesale prices, always keep in mind that you are not the one who is subject to the overhead costs. You should also always consider the shipping fee. Some providers offer free shipping, and some may charge more shipping fees than others. Add up the selling price + the shipping fee and then compare the total cost with your supplier’s wholesale price + the shipping fee. This will give you an accurate result.
Also, when comparing their wholesale prices, you should always compare them with the average prices that you find on eBay or Amazon. The reason is that not all sellers use drop shipping. Some sellers may buy products in bulk at a lower price or they may buy cheaper replicas or similar products from China.
Most inexperienced sellers will compare their wholesale costs to the absolute lowest prices found on eBay or Amazon and come to a conclusion too quickly. You should always compare your prices with the averages and don’t give up before you start selling.
Remember that product quality is extremely important and will directly contribute to the long-term success of your online business. Focus on providing great quality products and great service, and your business will prosper.
Can you still buy in bulk?
Most sellers use drop shipping method only, but the choice is up to you. If you come across a rock-bottom wholesale order price that’s too good to pass up, go ahead and upload the product to your website. When that specific product is sold, of course, you will be responsible for shipping. Unlike drop shipping, you will also have to pay for the entire order in advance.