Trading Advice

Wholesale Versus Dropshipping

Wholesalers have a number of options when sourcing stock and supplying it to customers.

Traditionally, buyers source wholesale suppliers and stock their own goods ready to dispatch. But dropshipping is also an effective way of delivering goods to customers. In this article the team at Wholesale Scout weighs up the pros and cons of both.

Dropshipping is where a wholesaler will put in an order and the stock will be sent directly to the customer. This has a number of benefits;

Quick delivery
No need to worry about stocking goods and needing warehouse space
You can personalise the package to have your details on it
It’s a fast way of sourcing stock because you don’t have to send it yourself

Sourcing wholesale suppliers is the most popular way of trading and also has a number of benefits;

You get to take delivery of the stock and inspect the goods
You can order in bulk which allows you to bargain for the best wholesale prices
You can pass these savings onto your customers and create a loyal customer base
You can pre-empt any problems with stock before they reach the customer so your reputation stays intact

However there are a few things to bear in mind when choosing one for your business. Dropshipping can be difficult because you don’t get to inspect the stock before it arrives with the customer. You have to trust the dropshipper as if products don’t arrive as advertised it could damage your reputation. (For tips on how to find a reputable dropshipper read our advice article). Usually discounts are harder to achieve with dropshippers too.

However if you are sourcing wholesale suppliers you need to think about storage space. You will also have to wrap and ship your own products which take both time and money.

Both sources have their benefits and drawbacks so before you decide which one you are going to use research both heavily to decide which one is best for your business.

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