Dropshipping: A Smarter Way to Buy Wholesale Products
Learn how drop shipping compares to bulk wholesale buying and which approach is right for you.
Wholesale products, by definition, are products and merchandise that are purchased in bulk from a wholesaler by a retailer who will normally turn around and sell them to consumers. The basic idea is the more you buy at a time, the less you pay for each individual piece. This is exactly how retailers like Walmart can offer such low prices. Walmart buys more products from wholesalers than pretty much anybody on the planet, so they can demand a lower wholesale price than anybody else and, in turn, sell those products, accessories, and items to you and me for less while still making money.
The same principle works for online retail. If you are launching a fashion accessories website, the traditional way to get products and items of merchandise at a good price is by approaching a wholesaler, say a wholesale apparel supplier, and buying all of your wholesale merchandise in bulk. This is great, because now you can buy 40 faux-alligator purses (retail $150) for $80 each and turn around and sell them for $120 each and make $40 for every purse sold. Wholesaling is awesome, right? It absolutely can be, but first let's make sure we're seeing all the cons as well as the pros.
The Risks of Buying Wholesale Products
So now you have 50 faux-alligator purses. Remember, you haven't actually sold any yet, and until you do, you need a place to keep those things where they'll stay clean, dry and undamaged. No big deal, you've got some extra space in the garage, or maybe the pantry. Perfect. Just remember that as your store grows, so too will your need for storage space.
The biggest thing at risk is your own hard-earned money. Before you can sell a single purse, you need to buy all 50, which will cost you $4,000. And if anything were to happen to those purses before you sold them (leaking garage roof, gnaw-happy dog, vengeful two-year-old, you name it), you're out $80 for every purse you can no longer sell.
Let's say that faux-alligator purses go out of style overnight, and you've only sold 10. Suddenly, your chances of profiting on the remaining 40 are gone with the wind. The best you can do is discount them like crazy and sell them for whatever people will pay to take them off your hands.
Not familiar with drop shipping? Take a quick detour to our drop shipping basics page.
The beauty of drop shipping is that the risks that we described above are greatly reduced. Dropshipping suppliers buy, store, pack and ship all of your products for you, thereby assuming the majority of the risk involved in ecommerce. You simply need to market and sell the products to your customers.
In exchange for assuming so much risk when they drop ship for you, wholesalers will often charge a premium for dropship products.
Here’s where the largest benefit of Doba comes into play. From wholesale electronics to beauty products, Doba has negotiated low prices for a wide range of dropship products from hundreds of dropship wholesalers. If you're willing to front the cash and assume the risk of buying in bulk, you may be able to find a lower price, but we guarantee that our catalog has the lowest drop ship prices for wholesale products, accessories, gifts and items of merchandise anywhere!
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