Wholesalers And Dropshipping

Have you ever wondered how people on EBay are able to offer so much merchandise at such affordable prices? Where do they keep their inventory? And how do they know that all of their inventory will sell? The answer is drop ship wholesalers. Drop ship wholesalers are wholesalers or manufacturers that offer a drop ship service. A drop ship service is a program that allows you (the seller) to sell their merchandise without first purchasing it. Then when a customer buys it from your store, you buy it from the manufacturer and they send it out to the customer. This way there is no investment; you only buy what you have already sold!

Here’s how it works:

The seller uses the drop ship products pictures and descriptions to sell the products on their EBay store or website. Once a customer has purchased the order, the seller will fulfill the order with the drop shipper. The seller will provide the drop shipper with the buyers name and address and the drop shipper will send the product directly to the buyer. That’s it!

The pro’s of drop shipping:

By using a drop shipper you will never have to carry inventory. Carrying inventory can be very costly and there are no guarantees that you will be able to sell that product. Remember, no matter how good a product looks to you it doesn’t mean that it will sell. By using a drop shipper you will be able to carry hundreds, if not thousands, of products without spending a dime on inventory and without the need of a warehouse.

By using a drop ship wholesaler you will also never have to worry about shipping. The drop shipper will take care of everything, and all you have to do is sell the product and collect your profits.

The con’s of drop shipping:

There really aren’t too many negative points to using a drop shipper as long as you use a reputable company. The biggest negative aspect of using a drop shipper is that they might run out of stock after you have made a sale. Most drop shippers are very good at letting you know when a product is running low on stock and it is up to you, the seller, to stay on top of this information. However sometimes these situations are unavoidable, which is when good customer service comes is essential. In these very rare cases the seller can just explain to the buyer that they had run out of stock and give them the option of being placed on a list for back orders (the manufacturer should be able to give you an estimated date that the products should be back in stock) or offer the customer a refund. Most customers will understand as long as they are told very quickly after the sale.

Fees of using a drop shipper:

There may be a small fee that is associated with drop shipping. Depending on the product it is usually between $3 and $5 per order. If a customer orders more than one product from the same manufacturer the drop ship fee will only be charged once. The good news is that you as the seller can pass this fee onto your customers as a “handling” fee, so you will not have to eat these charges.

Using Drop Shippers and Wholesalers:

Most drop shippers also offer a wholesale program. The difference between a drop ship order and a wholesale order is that a drop ship order is typically one product at a time, while a wholesale order is larger in quantity and is slightly discounted from the drop ship price. It is a good idea to utilize both wholesalers and drop shippers if feesable.

The way that you can utilize both programs to your advantage is to use drop shipped products as sort of tester products. You can list as many drop ship products as you like and then see which specific products sell the best and at the best prices. Once you have found a product that sells particularly well then you can buy stock of that item at the wholesale price. This way you know that the product is going to sell so the risk is minimal and the profit margin is higher.