What Is Drop Shipping And How Does It Affect Wholesalers?

By Author: Ann Hoskins
Total Articles: 30
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Drop shipping or dropshipping is a common trend now being touted by many Internet sites as the way to make money from home. What it is simply put is that it is a supply chain management technique wherein the seller (the storefront or retailer) does not have the inventory of the merchandise he is selling instead he receives the order and processes the payment THEN he passes off the order to the wholesale sources he has cultivated or represents who then take of shipping the products directly to the consumer.

This process of drop shipping is beneficial for the retailer because they do not need to have large capital outlay for the inventory of their stocks. This in turn lets them offer a variety of items depending on how well they can source wholesale companies and what terms they agree upon. Having a wide inventory is attractive to retailers and consumers alike for two reasons if the consumer trusts the company it makes shopping easier because they only need to deal with one store that they already ...
... know and for the retailers having many available products makes it easier to up sell once the consumer is browsing the website or store.

But in wholesale news, how does this idea of dropshipping affect the wholesaler? Does it help or harm them?

It is seen more as help for the wholesale community because it increases their sales force hundred fold without the added cost of hiring, training and maintaining this sales force. The retailers or middlemen are the ones who will need the wholesalers and they will search for the ones who offer the best products and the best deal for their company. There are many websites that have lists of wholesalers in particular areas such as the UK or India. There are also websites that categorize the wholesalers into specific descriptions such as beads or childrens books. This method of carrying inventory is a boon because wholesale sources from as far away as Asia can sell their products in Europe and North America without the added hassle of them personally opening up shop.


Ann Hoskins has been writing and publishing articles about wholesale and drop shipping. She is a business consultant and has been specializing in logistics management and shipping for more than 10 years.