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Dropshipping Vs Wholesale

Discussion in 'Making Money' started by Ghoro, May 19, 2013.

  1. Ghoro

    Ghoro Registered Member

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    Hi, so I?m not looking to jump in to either one just yet because I?m still working on my current project, but I am trying to plan what my next project maybe and I have been thinking about selling physical goods. However I am a bit unsure if I want to go dropshipping or wholesale and just want to hear what you guys think are the advantages and disadvantages of both.

    For one just from my little time researching it seems oddly hard to find good reliable list of dropshippers and they mostly seem very shady, wholesale seems to be a bit better, but maybe I just haven?t looked hard enough. I guess for me the main problems I see with wholesale compared to dropshipping is that wholesale takes a lot more time and work, with having to deal with packing, shipping and returns all yourself and I?m guessing for privacy and safety reasons I would want to get a P.O. box and not use my own home address.

    Which brings me to my next point that I don?t plan on running out and buying a warehouse anytime soon, so all of my supply would need to be stored in my apartment. I have a full sized empty room and walk-in closet that I could use, but still limits the types of products I sell, I don?t plan on storing treadmills in here.

    And of course with wholesale there is a lot more upfront investment compared to dropshipping, but I believe that wholesale has the potential for a lot more profit per sale as well as access to better products. The funny thing is I currently work for a major shipping company and I get a 15% employee discount, so it may not hurt to take advantage of that lol.

    And I guess with both I am not even sure how you get traffic to a site with no content on it like a blog would, other than paid advertisement.

    So what do you guys think? What are the pros and cons of both in your experience?

    Thanks for any help
     
  2. imperial444

    imperial444 Elite Member

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    Wholesale, Buy from them so you always now you have items in stock. Drop-shipping is a very short-term way of dealing with business.
     
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  3. Chamezz

    Chamezz Newbie

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    Dropshipping if you don't have the funds to buy larger quantities of each item (often 100+ minimum order from supplier). Like imperial said, dropshipping is very short-term solution, but a good way to get your feet wet.

    I'd recommend wholesale tho, if you have the storage and the funds. You know how much you have in stock, you can inspect the products and you can make sure that they are actually sent out.

    *EDIT*

    Another thing with wholesale, it sounds like you have a full-time job. Do you really have the time to handle importing, packaging, orders, returns, QC, inventory, customer support and promotions/discounts etc?
     
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    Last edited: May 19, 2013
  4. Princesstambam

    Princesstambam Registered Member

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    I agree with Chamezz. Drop shipping is great, especially if you don't have the start up capital. I would establish myself, the proceed to purchase wholesale.
     
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  5. Ghoro

    Ghoro Registered Member

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    Thanks for the replies guys,
    And I really was thinking that wholesale was the more legit and better way to go. The only problem I was thinking was what Chamezz brought up

    So yes I have a full time job so I can easily fund the startup cost, however I wasn't really sure how much time and work would be needed to keep up with all those things you said like handle importing, packaging, orders, returns, QC, inventory, customer support and promotions/discounts. I know it can very a lot, but on average how much time per day would you say is needed to do everything you need for a wholesale site just starting up?

    Thanks
     
  6. MachineLord

    MachineLord Supreme Member

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    Wholesale is better option if you have some money ofcourse, but with legit dropship hookup you can start some and earn money for you future wholesale journey
     
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  7. Chamezz

    Chamezz Newbie

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    It depends on how many products you choose to stock, but it will pretty much become a fulltime job.

    Checking every single item, since things can get damaged in shipping, contacting the supplier, having it exchanged.
    Transfer money back to customers who want to return a product, make sure that they haven't damaged the product. There are A LOT of variables to take into account.

    If I'm not mistaken you also need to do the taxes for your ecommerce separately.

    The best might be to start with a little mix of both dropshipping and wholesale, although some dropshippers require you to have a VAT number.

    You could get some select, very cheap, items for wholesale and sell those at auctions/ebay etc. So that you're +/- 0 on those items with shipping/import taxes/customs fee included. Whilst referring them to your webshop which has products from your dropshipper. Then when you've established a customerbase you could look into working less at your current job and try to start importing more expensive products yourself thus making wholesale atleast a part-time job..
     
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  8. CandyLand

    CandyLand Regular Member

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    Wholesale is the long-run solution. The profit margins are much higher, and you have access to a far greater variety of products if you're willing to buy by the box. However, I don't recommend that people who are new to e-commerce just start buying boxes of items. You don't know what will sell yet. You don't have the experience to pick out a hot product and push it on the market. You will probably lose money if you jump right into wholesale.

    I think you should start with dropshipping and get to know the market first. You won't make as much money, but a little experience is worth its weight in gold. As for finding legitimate dropshippers, start with dropshippers in the US or western Europe before you start trying to buy from China. You can buy a list of dropshippers from a place called worldwide brands. They vet everybody on their list beforehand. You can still get scammed, but the risk is lower. This will give you an idea of how a legitimate dropshipper will operate and function, and you'll have some base knowledge that will help prevent you getting scammed if you do venture out and try to buy from alibaba or some other murky place.

    Also, beware of replicas...

    Edit: There's also the third road which is to just put the products on your site at a markup and when you get an order, just order it yourself from the cheaper site and send it out to the customer. You pocket the difference. It's definitely the easiest way to get started but isn't a long-term solution...
     
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    Last edited: May 20, 2013
  9. Ghoro

    Ghoro Registered Member

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    Thanks for all your help,

    So yeah definitely thinking just wholesale is the way to go, even if it takes more work. I am really looking to try and establish a real reliable and legit business that hopefully over time I can focus on full time. But of course there is still a lot I need to learn and research about, like what products to sell and how to best market my website other than just SEO.

    However I am thinking somewhat like Chamezz said to start off with selling on ebay and Amazon if I can, I still need to look in to what?s needed to do that, mainly just to get my feet wet when it comes to dealing with all the steps of selling products online and keep it small to start off, but if all goes well then try to grow by making my own website. It?s just a thought for now, I still need to do more research in to it.
     
    Last edited: May 20, 2013
  10. gkuang2

    gkuang2 Newbie

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    I would start with dropshipping, but eventually go to wholesale when you learn the ins and outs of the business. You lose out on a lot of money when you do dropshipping because usually they charge you a fee plus the shipping and handling. But dropshipping is great beginners and people that don't have a ton of money to put into the business.
     
  11. GlobalChange

    GlobalChange Junior Member

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    I would prefer to sell a product that doe snot offer drop shipping, that would let me know I wonT' be fighting against hundreds of copycats that just create a volusion or bigcommerce account to sell the same thing, at the same price.
     
  12. devil157

    devil157 Registered Member

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    Wholesale if you have enough money to effort a high quanity.

    Dropshipping for people without much money.

    ~Devil
     
  13. vivien007

    vivien007 Newbie

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    drop shippping !
     
  14. junehu

    junehu Newbie

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    Occupation:
    drop-shipping and wholesaler service
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    work with Osell, You are free from the troubles on sourcing, storing, packing and shipping. The only thing I do is selling. Osell, your best partner will take care of the rest when I get the order from your clients. Skype: junehuq
     
  15. jk369777

    jk369777 Newbie

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    Dropshipping - manually sending and packing is not fun.