Dropshipping vs Wholesale. It’s the eCommerce battle between classic and modern business models.
I’m an eCommerce expert. I’ll show you exactly which PATH is MORE PROFITABLE and better.
The winner is none other than the DROPSHIPPING MODEL. The low start-up cost of this model makes it so ATTRACTIVE. And unlike wholesale businesses, dropshipping eliminates the need for inventory. Saving your dropshipping store money for advertising.
Ready to become an eCommerce seller? Keep reading!
What is dropshipping?
The dropshipping business model allows selling to customers without storing any stock.
Here is how it goes:
An eCommerce store sells products provided by third-party suppliers. Upon a customer’s purchase, a piece of software notifies the reputable supplier. So they COMPLETE the entire order fulfillment process.
Is there room for profit margins?
YES! Dropshipping business allows entrepreneurs like us to set prices. Making it super easy to GUARANTEE I’m not selling at a LOSS.
There’s no need to buy inventory ahead of time when dropshipping. Profits are EASY TO SECURE.
What is Wholesale?
Wholesale is the POLAR OPPOSITE of the dropshipping eCommerce business model.
Wholesale model needs eCommerce sellers to buy products upfront. (Often in LARGE quantities to enjoy a discounted price). Then, resell every item they have in the wholesale store with higher profit margins in mind.
For buying wholesale, invest money in:
- Setting up a physical store
- Buying your own inventory
- Managing inventory storage
- Order fulfillment preparation (packaging, labels, etc.)
Do you need a LOT of money to start a wholesale business?
Most of the time. Yes. WHOLESALERS often have high minimum order quantities. And, if BULK DISCOUNTS is the priority. I suggest BUYING MORE for each product.
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The Key Differences Between Dropshipping and Wholesale
What makes dropshipping different from wholesale? Let’s break it down!
1. Start-up Cost
Unlike traditional models, dropshipping stands out by offering LOW START-UP COSTS. Eliminating the need to purchase products upfront
The FOCUS here is on tools essential for running the online store, like setting up a website. Allowing every store owner to have a flexible allocation of funds for marketing efforts.
On the flip side. Opting for wholesale buying means purchasing products BEFORE selling them.
Given the need to buy bulk quantities to secure BULK prices. A significant upfront investment is needed.
Wholesale requires extra costs and complexities in managing inventory. Setting dropshipping from its STRAIGHTFORWARD process.
2. Inventory Management
The way products are handled differs in drop shipping vs wholesale.
Dropshipping ELIMINATES concerns about storing inventory. As dropshipping suppliers manage it ALL. Easing the process of selling online to customers.
Wholesale route means MANAGING INVENTORY.
Either store them or outsource inventory management with a storage and shipping company. Like Amazon sellers using FBA. They send items to Amazon for storage space. When a customer orders, Amazon TAKES CARE of picking, branded packaging, and shipping.
Wholesale buying offers LESS DIRECT CONTROL over the shipping process. But it is more cost-effective.
No need for a storage space or a team to handle orders. Making it slightly like drop shipping.
3. Suppliers
Wholesale business can be a bit of a HUSTLE. Dealing directly with brands, needing their nod for resale.
Finding a solid wholesale supplier might also take a bit of legwork. So, it’s best to check DIRECTORIES or do the old-school manual search.
Dropshipping offers smoother supplier relationships. Offering LESS APPROVAL from a business owner.
Suppliers are usually easier to talk to. Fewer hoops to jump through and LOADS OF BRANDS to choose from dropshipping stores.
4. Product quality control
Top-notch quality is the KEY for happy customers.
Checking each item before sending it to customers is NOT POSSIBLE. Putting the quality control responsibility in the hands of the dropshipping supplier.
So, in a nutshell, WE RELY on the supplier to avoid any quality hiccups.
On the flip side, my wholesale experience offered better product quality.
Ordering products in advance allowed me to give them an ONCE-OVER. Before sending them out to customers. It felt like having a hands-on approach, ensuring everything was spot-on.
Between my dropshipping and wholesale experiences. Wholesale had a bit of an EDGE in keeping the quality game strong.
5. Competition
Competition is an integral part of eCommerce. Impacting the SUCCESS of your own eCommerce store.
On average, wholesale products face higher competition. Especially when selling BRANDED ITEMS.
Wholesale also involves direct competition with manufacturers selling their branded items. Out-competing them on PRICE is almost impossible in this scenario.
In contrast, dropshipping products are often less competitive. Some items may come from popular brands. And once UNIQUE BRANDING is incorporated. This SIDESTEP direct competition with manufacturers.
But, dropshipping isn’t entirely free from competition. Partnering with popular suppliers MAY LEAD to multiple sellers listing the same products.
Wanna know a smart way to make every item stand out?
Use distinctive PRODUCT IMAGES, different from default supplier photos.
We can Made Drop Shipping from China Easy
Leeline is to help Shopify & small businesses shipping products from China and build your branded business.
People Also Ask about Dropshipping vs Wholesale
Where can I find a cheap Wholesaler?
The BEST SOURCE of affordable wholesale products is China. Suppliers here sell WHOLESALE STOCK for the cheapest WHOLESALE PRICES. Get the best PROFITS for your brick-and-mortar store.
Is dropshipping better than inventory?
It depends on PREFERENCES. Dropshipping vs. wholesale are both popular business models. Dropshipping offers little to no upfront investment. And wholesale provides better control of inventory and quality.
What do I need to start dropshipping?
An online storefront and a reliable supplier who offers dropshipping services. You won’t have to GO THROUGH the order fulfillment process. So, there is no need to stress about logistics or inventory management.
Can I drop ship for free?
Of course! Dropshipping DOES NOT need huge capital. Some platforms allow setting up an online store for free. Suppliers won’t need payment before customers order. But NOTE: investing at least a small amount of money gives you a competitive advantage.
What’s Next
Dropshipping and Wholesale are two of the best ways to start selling products online. Both offer a SUREFIRE PATH of earning profits for your online business. Opt for dropshipping for smoother inventory control. And choose wholesale for better quality control.
Want to start an eCommerce business but don’t know how?
Call Leeline! Source products at discounted prices. Buy inventory upfront at the lowest cost.
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