Many reasons exist as to why dropshipping is better than wholesaling. However, before I can point those out to you, I will explain the difference between dropshiping and wholesaling.
Wholesaling: We all know that wholesaling is when goods and merchandise are sold to a company or professional for the use of commerce. In other words, you buy a ton of stuff from some big warehouse to store in your place of business (for many small businesses that is in their home) until you sale that merchandise.
Dropshipping is where a customer orders an item from a business (usually an online store) and the business forwards the order to the warehouse who proceeds to send the order directly to the customer. Therefore, instead of you needing to keep the items at home, you just need to display them in your online store and then tell the warehouse to send it when the item is bought.
So, now that we know about dropshipping, we can look at the advantages.
- With dropshipping you won’t have a ton of merchandise. Wither you have a small office building or wither you operate out of your home, having a bunch of piled up junk can be a pain. Let’s say you have a website that sells a bunch of different environmentally friendly kinds of toilet paper. Do you really want to work or live in a place surrounded with toilet paper? I guess it would make good walls for a fort for the kids (or you if you happen to enjoy building forts) but it isn’t really something that is practical to keep inventoried.
- Dropshipping saves on delivery costs. When you wholesale, the item comes to you through a delivery company and then you send it through another delivery company to the customer. Delivery costs are not cheap and if you are a small business you need to save as much as you can. With dropshipping, all you need is to tell the big warehouse that keeps all of the toilet paper to send some to your customer. That way, you are paying shipping one way. Seriously, if you are going to be selling environmentally friendly toilet paper you really should be working toward cutting down on the amount of pollution caused by the delivery of said toilet paper. It’s like riding a bike to save the environment only to throw a gallon of gasoline onto the ground every day.
- There are a lot less initial costs with dropshipping. For one, dropshippers tend to offer their merchandise to you less expensively because they can order a larger quantity than a wholesaler can. Also, you are not having to buy the merchandise upfront. For that reason, you won’t have to worry about buying a bunch of items that you may not be able to sell. That means less money gets burned up. I mean come on, burning money cannot be good for the environment and you are an environmentally friendly toilet paper salesperson right?
If you are thinking about switching to dropshipping there are good reasons to switch. Always make sure that the warehouse you are using for dropshipping is reputable and is the right fit for you.