By John Freech
When you operate a resale business you have the ability to choose whether or not you want to use dropshipping vs. buying wholesale products. There are pros and cons to buying wholesale bulk vs. using dropshipping companies. It is in the best interest for you to decide how you would manage your business. That is why I am going to outline some of the differences to help your decision making process.
So what is dropshipping anyways...
Dropshipping is the means of using a third party company to deliver products on behalf of your company.
Let's take a look at advantages of dropshipping:
1. You have the ability to buy products in lower quantities and no need for inventory. No need for inventory makes it a lot easier to sell products when you do not have the space to buy in bulk.
2. More products. If your budget does not allow it you can have more variety for your customers to choose from as you don't need much upfront for dropshipping.
3. The dropshipper packages and ships allowing you more time to focus on your business.
Disadvantages of dropshipping:
1. You are not in control.
2. Product inventory can change frequently leaving you out of sync.
3. Using different dropshippers leaves you incapable of packaging several items together.
4. Prices tend to be higher.
5. Competing with larger companies is trickier. You will need to diversify your business and put something unique to the table. With lower margins it's harder to compete.
OK, So now you know dropshipping can be a useful advantage to your business, but does come with some disadvantages. Dropshipping can be very tricky when something goes wrong. You must be in sync with the dropshipper very closely in understanding who to contact in cases of lost packages, package mishandling, wrong products delivered, or anything else that may need taken care of.
So, now let's take a look at by wholesale bulk...
Advantages of buying in bulk.
1. You are in complete control.
2. You have the ability to package more than one item together saving on shipping costs to your customers. Plus you can also add promotional materials such as coupons, samples, or more sales material.
3. When something goes wrong you have the ability to take care of the problem in a quick professional manner.
4. Flexibility to keep prices lower since your buying in bulk. When buying in bulk manufacturers and wholesalers generally will bargain with you.
5. You can not oversell as opposed to dropshippings ever-changing supplies. If you have the inventory at your place of business you certainly have more knowledge of what's on hand and what's not.
Disadvantages of buying bulk:
1. It's expensive.
2. Takes a lot of space to put inventory.
3. If the niche you sell to goes dead your loss is much higher. Sometimes you may be able to sell it to liquidators, but at a much lower price tag. Even the manufacture or wholesale company may buy it back, but as said generally with a lower price tag than what you paid.
I have outlined both dropshipping and buying in bulk. In my opinion it is better to start with dropshipping and work towards buying wholesale. This way you have the chance to learn some of the ropes of selling before putting a large investment towards buying inventory. For more tips please visit my site.
Author Roger Hicks an internet business owner enjoys helping others succeed. For more free tips visit [http://blog.firstopp.com]
When you operate a resale business you have the ability to choose whether or not you want to use dropshipping vs. buying wholesale products. There are pros and cons to buying wholesale bulk vs. using dropshipping companies. It is in the best interest for you to decide how you would manage your business. That is why I am going to outline some of the differences to help your decision making process.
So what is dropshipping anyways...
Dropshipping is the means of using a third party company to deliver products on behalf of your company.
Let's take a look at advantages of dropshipping:
1. You have the ability to buy products in lower quantities and no need for inventory. No need for inventory makes it a lot easier to sell products when you do not have the space to buy in bulk.
2. More products. If your budget does not allow it you can have more variety for your customers to choose from as you don't need much upfront for dropshipping.
3. The dropshipper packages and ships allowing you more time to focus on your business.
Disadvantages of dropshipping:
1. You are not in control.
2. Product inventory can change frequently leaving you out of sync.
3. Using different dropshippers leaves you incapable of packaging several items together.
4. Prices tend to be higher.
5. Competing with larger companies is trickier. You will need to diversify your business and put something unique to the table. With lower margins it's harder to compete.
OK, So now you know dropshipping can be a useful advantage to your business, but does come with some disadvantages. Dropshipping can be very tricky when something goes wrong. You must be in sync with the dropshipper very closely in understanding who to contact in cases of lost packages, package mishandling, wrong products delivered, or anything else that may need taken care of.
So, now let's take a look at by wholesale bulk...
Advantages of buying in bulk.
1. You are in complete control.
2. You have the ability to package more than one item together saving on shipping costs to your customers. Plus you can also add promotional materials such as coupons, samples, or more sales material.
3. When something goes wrong you have the ability to take care of the problem in a quick professional manner.
4. Flexibility to keep prices lower since your buying in bulk. When buying in bulk manufacturers and wholesalers generally will bargain with you.
5. You can not oversell as opposed to dropshippings ever-changing supplies. If you have the inventory at your place of business you certainly have more knowledge of what's on hand and what's not.
Disadvantages of buying bulk:
1. It's expensive.
2. Takes a lot of space to put inventory.
3. If the niche you sell to goes dead your loss is much higher. Sometimes you may be able to sell it to liquidators, but at a much lower price tag. Even the manufacture or wholesale company may buy it back, but as said generally with a lower price tag than what you paid.
I have outlined both dropshipping and buying in bulk. In my opinion it is better to start with dropshipping and work towards buying wholesale. This way you have the chance to learn some of the ropes of selling before putting a large investment towards buying inventory. For more tips please visit my site.
Author Roger Hicks an internet business owner enjoys helping others succeed. For more free tips visit [http://blog.firstopp.com]
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