This is my first post, so here goes!
As an online retailer I am always looking for ways to get the best deal and grow my business. When it comes to buying wholesale or having a deal with a dropshipper, this is something that could make or break your business, so it is best to think about it carefully before you make a decision. In this post, I am going to give the advantages and disadvantages of either option.
Advantages of Wholesale...
With wholesale you are likely to get much better pricing than you ever will with dropshipping. This cost saving can make or break your business in a competitive industry.
You can negotiate better pricing because there is more players in the market. For example, it is far more likely that you will be able to find a wholesale supplier or manufacturer than it is you will be able to find a dropshipper who is willing to enter into a dropshipping agreement for the kind of products that you want to sell.
Advantages of Dropshipping....
With dropshipping there is no need for warehouse costs and as a result you can save big in this area. With wholesale it is possible to pay a fulfilment house, however this can be very expensive.
An ability to choose different product lines and not being restricted to what you have in stock. With dropshipping you can choose to have many products for sale, some of which you may not sell that much of, but it will not cost you in excess inventory, as it will a company that buys wholesale.
Grow your business slowly and work your way up through having less commitment to buy big in the first place. Most dropshippers will not force you into any minimum buying commitment at all.
Improve your businesses cash flow through not having to commit to large orders. You are also decreasing risk because you will no longer have to worry as much about being ripped off. If you are ripped off, then it is for a much smaller amount which means you do not have to worry as much at all.