Wholesaling Versus Dropshipping

By Author: Ann Hoskins
Total Articles: 30
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If you are trying to find ways to make money on the Internet, you have by now looked over many auction and classified web sites, and realized that there are huge markets of customers willing to buy just about anything. You know that you can make money, but are not sure how to find the right product at the right price.

The answer to your situation lies in two areas, being the use of a wholesaler or the use of a drop shipper. The first option would be using a wholesaler. You can spend a good deal of time researching what things that people are buying, and then buy merchandise directly from a wholesaler, store it in your garage, and ship off individual pieces whenever somebody buys one. This can work well, however after trying this for a while, you may discover that it involves a lot of work. Each time an order has been placed, you need to individually package each item and mail it directly to the customer.

This method works well for those who have a good deal of storage space, and the time to bring your items to the post office, or other shipper, but it also introduces an extra layer of risk. You may end ...
... up buying an entire pallet of merchandise at wholesale prices thinking you are going to make a killing, but instead find yourself stuck with a large amount of stock which you cannot sell.

The other option involves using a drop shipper. With drop shipping, you do not need to buy or stock any items prior to a customer purchase. When working with a drop shipper, there is no up-front expense, and little risk involved; you only need to pay for the item after it has been purchased. You also do not need to worry about storage space; when you inform the dropshipper that an item has been sold, they will take care of the packaging, and mail the product directly to the customer.

Though there is little risk involved with drop shipping, the prices tend to be a little higher than those provided by wholesalers who will sell you items in bulk. Also you have less control about the quality of the product, so you may run into problems with customer complaints if the supplier does not guarantee their products.

Essentially, there are advantages to both methods. If you are just starting out, a drop shipper may be an ideal solution. Once you get rolling, and start making some money, you might find that working directly with a wholesaler maybe better.


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.