A question we often receive is on whether to buy wholesale or look into drop shipping. To understand which of these options are best, it will be good to first of all look into the pros and cons of each.
Buying wholesale involves sourcing products at a low cost price from a supplier, buying them in bulk and then reselling them on your website at a higher price in order to make a profit. You are responsible for the packaging, branding, shipping and processing the orders and may also need a storage facility keep your stock.
You have full control of your inventory and can source products at a cheaper rate through buying in bulk
Buying wholesale is extremely capital intensive since you are buying products in bulk upfront. There is also a risk of stock becoming obsolete if they don’t sell, meaning you could have your money tied up stock if no one buys them.
Drop shipping involves selling products or inventory you do not physically own. So unlike wholesaling which involves buying products in bulk from your supplier in advance, with drop shipping however there’s no need to invest any money upfront buying inventory. You simply find a supplier who offers drop shipping services, start selling their products in your website (as if you already have them in stock) charging a higher price of course, and then when a customer buys, you send the customers details over to your supplier (keeping your profit), you supplier then deals with all the packaging, processing and shipping of the order directly to your supplier. This means your job is simply bringing customers to your website, and passing their details over to the supplier, and keeping your profits thereby saving you so much money. This is also less risky because if your products do not sell, you don’t lose any money.
- Very Low Risk
- Little to No Capital Required to Start
- You can make money passively
- Flexibility to run your business from anywhere in the world
- A lack of full control of products since your supplier handles inventory
- Cost price may sometimes be slighter higher than buying in bulk
In conclusion, I will always strongly recommend drop shipping for newbies just starting out unless of course you plan to sell offline e.g in a storefront. Secondly if you are more interested in selling your own branded products, then you will definitely need to buy wholesale as drop shipping simply won’t work.
However if you are interested in selling massly produced clothing, then drop shipping will give you an opportunity to test the market and see if people are really interested in your products. If sales start to flood in, you could then look into buying wholesale. Business is becoming more and more competitive in the digital space and you don’t want to end up risking all your savings purchasing products in bulk with no guarantee on whether or not it will work. So in conclusion, I will say start with drop shipping, then use your profits to reinvest in wholesale products in the future. If no one is buying from you whilst drop shipping, what makes you think they will buy when you purchase wholesale?
How To Get Started Dropshipping
So now we’ve explored the differences between wholesale and drop shipping, you are perhaps wondering how to get started? If you are looking for a great way to start your drop shipping business, then Dropship finds offers you readymade websites preloaded with products ready to start selling in these niches. We also offer you a list of Dropshipping Suppliers to start selling and fulfilling your orders instantly. Why not browse our shop to view our website templates, pick a website of your choice and let us create your drop shipping business for you. Get started by CLICKING HERE.