Thread: Drop Shipping vs. Wholesale

As I am planning out my business, I have come across a decision that I will have to make: Finding a drop shipper for my goods, or figuring out how to take inventory, ship them myself etc. I have some questions regarding these:

1. What are some Pros and Cons that you have learned about drop shipping?
2. What are some Pros and Cons about doing it yourself?
3. How would I negotiate with drop shippers?

Jake

Best book you can read regarding this topic would be

from Zappos founder Tony Hsieh

Delivering Happiness: A Path to Profits, Passion, and Purpose: Amazon.ca: Tony Hsieh: Books


its a great read for every entrepreneur.


I have no experience on the topic,

however I believe Dropship is the best way to start your business, then you may decide to own your inventory.

Drop ship might be more fast lane, as you can create systems to take human interaction out of the sales process.

drop shipping makes the products available from 23284792934 different sellers.

just make sure it's not offered by too many sellers.

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.

car parts ar that way, tons of websites, all drop shipped form the same distributors:/

I think you are into natural soaps, this is more niche so you might be lucky and convince the players to dropship for you "only"

Yes, there are a few people that will or might drop ship, but It will take negotiations as the one business that actually offers it has a minimum order and there are a couple that I have contacted that are willing to do it. Thats what I meant in my third question: Is there anything I need to address when making deals like this.

Originally Posted by Jacob Scholes

As I am planning out my business, I have come across a decision that I will have to make: Finding a drop shipper for my goods, or figuring out how to take inventory, ship them myself etc. I have some questions regarding these:

1. What are some Pros and Cons that you have learned about drop shipping?
2. What are some Pros and Cons about doing it yourself?
3. How would I negotiate with drop shippers?

Jake

1. The pros -you have know inventory, the dropshipper sends the order to the customer.

The cons - The droppshipper can change their prices without notice. They may also run out of stock. The price of the product may be to high, you may not make alot of profit - but it depends on the product

2. The pros - buying the product at wholesale or from the manufacturer the prices will be lower than dropshipping. You are in control of the stock levels. You could re-package the products with your branding - depends on the product and agreement with wholesale or from the manufacturer. You can set your own prices, you can make more profit cause the price is low.

The Cons - packageing and sending the goods yourself, especially when you have alot of products to send.

3. Most dropshippers, gets their products from wholesalers or manufacturers. Its better to contact wholesalers or manufacturers and asking them if they do dropshipping. Get a price list with the minium order qty. Make sure you understand how they charge for shipping so you can determine the total price you'll be paying for each product. Compare prices with each wholesalers or manufacturers.

If you are seriously interested in Drop Shipping, I HIGHLY recommend you buy this course from AppSumo:

All your software in one nice little burrito | AppSumo.com

It will teach you everything you need to know.

Ok. I've changed it a bit.
My business will only have to ship out every other month, but in the future the amount to ship might be HUGE.
I will only be shipping one product, soap bars.
Since it subscription based, I will know exactly what soaps I need.
After doing some e-mails and calls, drop shipping looks like a dead end. But considering the above, it looks very easy (time and work wise).
The thing is, I don't know how much work doing the invoices, shipping etc. is, because I have never done it before. To those of you who have, does this look like it would not be as much hassle as a normal e-commerce store?

Originally Posted by Jacob Scholes

The thing is, I don't know how much work doing the invoices, shipping etc. is, because I have never done it before. To those of you who have, does this look like it would not be as much hassle as a normal e-commerce store?

I don't know personally, but I believe you could find the answer on this site Starting An Online Business When Your Wife Wants To Stay At Home With The Kids | MyWifeQuitHerJob.com. I was reading their blog about their experience with starting an online store and I'm positive he talked about drop shipping vs keeping inventory.