Should you Choose a Wholesale or Drop Ship Program?

If you have done the research then you would know that there are distinct advantages and disadvantages to using a drop ship or a wholesale program. It actually may be smart for you to use both a wholesale and a drop ship program for your business. In this article I will explain the advantages and disadvantages of both wholesaling and drop shipping and a way for you to use both programs to maximize sales.

First there are definite advantages for each drop shipping and wholesaling. With drop shipping you will not have to invest money in products until they actually sell, you will not have to risk money on products that may be slow moving, and you do not have to worry about storing and shipping your products. With wholesaling you may get a much bigger discount and you won't be at the mercy of the manufacturer once you sell the product (in case of backorders or slow shipping).

The disadvantage of using a drop ship program is that you may not get as big of a discount and you may have to pay a drop ship fee, both of which will minimize your profits and make you less competitive. Also if the product goes on backorder after it has sold your customer will have to wait weeks for their product which will not bode well for your companys reputation. The disadvantage of using a wholesaler is that you would have to store everything, you would not be able to offer as much selection, and you would have to ship everything yourself.

So here is how to use both programs to your advantage. You can start off using a drop ship program to test the products and see which ones sell the best. This will allow you to have ample selection without actually taking any risk. Once you have found a product that sells particularly well you can buy that product in bulk at wholesale. This way your risk is significantly reduced and you profit margin for faster moving stock will be much greater.

To find new wholesalers and dropshippers you can check wholesale sources such as directories and wholesale news sites and forums.


Ann Hoskins has been writing and publishing articles about wholesale and drop shipping. She is a business consultant and has been specializing in logistics management and shipping for more than 10 years.