Go through any reselling business forum and almost all the budding resellers have the same query – ‘Is wholesale better or should I choose drop shipping?’ It is smarter to partner with a wholesale supplier or with a drop shipper and avoid the hassles that come with bulk purchasing. Here are both sides of the coin:
Wholesale Suppliers Are Better
— Wholesalers can provide you products at all the more cheap prices as they are the only link between you and a manufacturer. Drop shippers on the other hand are usually middlemen between a wholesaler and you. And thus when they sell you a product they also add their own commission in the price of the product. Buying directly from a wholesaler can boost your profit margin any given day.
— Wholesaler suppliers have a wider range of items and products to choose from.
— Working with a wholesaler is easier and more organized. This is because majority of wholesalers assign a sales representative to each and every buyer. And thus you have an exact point person to direct all your day to day queries to.
Drop Ship Distributors Are Better
–About 90% of the wholesalers will ask you for a tax ID. Drop Shippers on the other hand do not need a tax ID.
–Though with wholesale you buy cheaper, but you also spend a lot of money taking care of the packaging and shipping charges. With drop shippers, you are free of that worry. You just forward them the address of the customer, and they will ship the product themselves.
–With wholesale supplier, you would need an inventory. So you would end up leasing a space, managing and organizing huge pile of stocks and keeping the inventory. You pass on all that work to the drop shipper if you partner with one.
One thing that is the same for both wholesale supplier and drop shipper is finding one to partner with. Many believe that finding a reliable supplier is tiresome. However, with the success of online directories like Salehoo, this task is getting easier. Taking Salehoo for example, there are more than 8000 wholesale suppliers and drop shippers that you can find in their database. What’s even better is that Salehoo features manufacturers and liquidators as well. You can review such directories and make an informed decision about which supplier you wish to partner with.
Before making the final choice, also consider factors such as your budget, other resources that you have and how much time and energy are you ready to commit for the business.