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Wholesale Dropshippers – Are They Right For Your Business?

Watch out for wholesale dropshippers who charge monthly fees –they may not be ‘wholesale’ at all. Also, the wholesale dropshipping company you look into should ask you for your tax license number.

 

 

Wholesale Dropshippers

by Amy Finley

Wholesale dropshippers – if you can say it three times fast, it’ll work for you.

Okay, you don’t have to say wholesale dropshippers three times fast – but it may still be a good solution for your business. (Have your kids try it, though, and they’ll run around the house repeating it for weeks and think you’re letting them say a dirty word).

Now, down to business. Just for clarification, wholesale dropshippers are companies (oftentimes manufacturers themselves) who house and ship merchandise. The wholesale dropshipper stores and ships the product, and you (the business) market, process the information, and (hopefully) make a profit.

Which comes first, the wholesale dropshipper or the product idea?

Kinda like the chicken or the egg… Just kidding, this is way less complicated than that. If you are just starting out with e-commerce – you should know that savvy leaders in the business world recommend not going to a wholesale dropshipping company first, getting their catalogs or lists of merchandise, and marketing the products. Instead, decide what you are interested in marketing and then – and only then – get into a contract with your wholesale dropshipper.

The reason for this recommendation is this: even when you are going with a wholesale dropshipper, there could be markets selling your product at lower rates (i.e. larger companies will have more buying power, often allowing them with better deals, more rebates, etc.). If it is a product that is highly available, it will make it more difficult for you to sell the product because most of the time consumers will go with the lower price (I say most because some consumers prefer to pay more if they know the company selling the product and trust them).

However, this is a risk you can avoid (okay, at least reduce) by deciding on products that are preferably based on research that shows its demand is greater than its supply, at least its supply in the area you’re targeting to market (most likely the internet). After you’ve researched and decided on your products, then look for a wholesale dropshipper that carries them.

Why are wholesale dropshippers are good for businesses?

Wholesale dropshippers are good for businesses because they are low risk – you don’t have a bunch of merchandise sitting around your house that you paid for that didn’t sell. You market the product first, then get the order, send the information to your dropshipping company, and the customer receives it – and you never even had to get out of your pajamas!

Sounds like a dream come true, right? Well, you still need to be careful. Wholesale dropshippers may not be the ‘end all, be all’ to make the small business owner an instant millionaire. With that said, here are…

Things to watch out for

As mentioned previously, wholesale dropshipping does not necessarily mean you’ll be selling your products for the lowest price in the market, which is why it’s important to be aware of the supply/demand ratio of your potential products.

Another aspect to consider is that while you may never see the product, usually your receipt and documentation is passed along from the wholesale dropshippers, so the customer never knows you didn’t personally take it to the post office. If there’s a problem with the delivery, you’re still going to get the complaint.

Watch out for wholesale dropshippers who charge monthly fees –they may not be ‘wholesale’ at all. Also, the wholesale dropshipping company you look into should ask you for your tax license number.

Like anything else in today’s society, there are certain things to take into consideration dealing with wholesale dropshippers. The many benefits they can reap for today’s entrepreneurs, however, make them a good choice for most.

In addition to being a freelance journalist with PULSEMEDIA International, Ms. Finley is also a creative writer and a graduate student of English at Cleveland State University. She lives in Rome, Ohio with her husband and three young children.

 

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