Wholesale dropshipping lets sellers sell products without inventory, with wholesalers managing shipping. It’s cost-effective, scalable, and relies on reliable suppliers and strong marketing.
What is wholesale dropshipping?
Wholesale dropshipping is a retail fulfillment model that allows retailers to sell products to consumers without maintaining physical inventory. Instead, when a retailer receives an order, they forward the order details to a wholesale supplier or manufacturer, who then ships the product directly to the customer. This model enables retailers to operate without the overhead costs of storing and managing inventory.
Compared to traditional methods, wholesale dropshipping brings business owners many advantages. We can avoid stock excess, resulting in optimal profits. Moreover, we can decide to promote which goods from which suppliers, ensuring flexibility and diversity in choosing promoted goods.
Related News
How does wholesale dropshipping work?
You can further understand how wholesale dropshipping works via the information below:
Supplier to customer fulfillment
After the dropshipping suppliers and the seller sign a successful agreement, the seller will promote the product. They will use the promotion methods that are allowed to attract customers. When there is an order, the seller will confirm and send information about dropshipping. At this time, dropshipping will pack and ship the goods to the customer.
Inventory management and automation
When applying this form of trading, retailers will not encounter inventory. The absence of inventory will help sellers optimize the overall cost level. Moreover, sellers also save on warehouse costs when storing inventory.
In addition, the automation feature also helps to connect drop shippers, retailers, and customers easily. Dropshippers and retailers can easily track their revenue and sales levels. Customers can track the progress of their orders and connect with retailers if needed.
Read more: How to Find Wholesale Suppliers for Dropshipping: A Complete Guide
Benefits of wholesale dropshipping
The wholesale dropshipping business model is becoming popular with many sellers today. This form brings many outstanding benefits, specifically as follows:
- Lower upfront costs and risk: Sellers only pay for goods to suppliers when they have an order and confirm it successfully. This helps avoid the risk of inventory. They do not have to import many goods to resell traditionally or buy retail. Therefore, the risks of goods are also significantly reduced. This is a suitable form of business for sellers who are new to the market. They are those who do not have much experience or do not have much capital.
- Ability to scale without inventory limitations: With no inventory limitation, sellers can freely expand their product range. They do not have to worry about warehouse space to store goods. Instead, they can access more products and suppliers to expand their business.
- Flexibility in managing products and suppliers: Sellers can access many products and suppliers in different fields. From there, they can adapt to the rapidly changing needs of the market.
This is the most outstanding benefit of wholesale dropshipping. It also helps sellers be more flexible in business, thereby bringing the most optimal source of profit.
What are the challenges in wholesale dropshipping?
Despite many outstanding advantages, wholesale dropshipping for beginners still has many challenges, such as:
Managing multiple suppliers and communication: Managing many different suppliers will lead to difficulties in connecting. This easily leads to sellers having diluted information and not updating information on time.
From there, communication between sellers and suppliers is also reduced. To overcome this difficulty, sellers should know how to use support platforms effectively. In addition, establish close relationships with suppliers to not miss out on business benefits.
Relationship between profit and order: The profit margin of an order will be low. Therefore, if the wholesaler wants to increase the profit significantly, he needs to increase the number of orders by advertising.
Building a brand will be difficult to build a brand If your business is new to the market. If you do this successfully, more customers will know about your brand, thereby helping to increase revenue significantly.
What is the difference between dropshipping and wholesale?
Wholesale dropshipping and retail dropshipping will have differences. Specifically, these two forms are often compared based on costs, profit margins, and the relationship between the seller and the supplier:
Pricing and margins
Wholesale dropshipping often brings higher profits. Because sellers can import large quantities at affordable prices, they can negotiate with suppliers for the best price during the import process. From there, the profit margin of an order will increase. Sellers will earn profits at the best price.
On the contrary, retail dropshipping will require the purchase of goods at high costs due to large quantities. In addition, accompanying costs such as shipping or insurance fees also increase with the number of orders.
Sellers rarely negotiate successfully when buying retail because the quantity they buy is too small. From there, the profit margin will decrease significantly.
Supplier relationships
The relationship between suppliers and sellers will be closer in wholesale dropshipping. Because sellers often buy in large quantities, long-term commitments or contracts will exist between them.
From there, a strong relationship between the parties is built to prepare for future cooperation. On the contrary, sellers in retail dropshipping often cannot do this. Instead, they will buy from many parties and not fix the supplier.
Read more detail: Differences Between Dropshipping and Wholesale Explained
How to start a wholesale dropshipping business?
After understanding “What is wholesale dropshipping”, sellers need to pay attention to how to start this business. Below are 3 basic steps that you can refer to starting a business with the wholesale dropshipping model:
Research and find suppliers
First, you must clearly define your goals and the products and services you intend to sell. Then, research the market to find the most suitable supplier. You should consult many sources for an objective assessment to choose a reputable supplier. Refer to reviews from previous customers to better understand the supplier’s reputation. On the other hand, you can also rely on the following factors to evaluate a supplier:
- Reputation: Consider the supplier’s reputation through publicly available certificates.
- Product quality: Check the product quality through its information and trends.
- Delivery speed: Currently, users are often interested in delivery speed, so choose a supplier with a fast and reputable delivery service.
Choose a platform
Currently, many platforms specialize in providing reputable wholesale dropshipping services, such as Shopify, AliExpress, SaleHoo, and Spocket. Specifically, each platform will have the following highlights:
- Shopify: It is an easy-to-use, optimized interface with many integrated features for dropshipping.
- AliExpress: Large model with many products, suitable for E-commerce and dropshipping trading.
- SaleHoo: Brings many reputable suppliers with market research tools.
- Spocket: Focuses on European products with superior quality.
Create a business plan and start selling
The seller will research ways to market the product in the final step. This is to help the product reach closer to users to increase the number of orders. On the other hand, you can also build your website to make marketing easier and more effective.
TOP 5 Best wholesale dropshipping suppliers in 2024
Below is a list of the top 5 best wholesale dropshipping suppliers that you can refer to:
Shopify
Shopify is the best SaaS solution for wholesale dropshipping, allowing you to build sales websites easily. The outstanding advantage of this platform is its intuitive and easy-to-see interface. In addition, the platform also provides many e-commerce solutions. It helps sellers improve their sales skills and earn the most revenue.
AliExpress
AliExpress is known as a global online business platform. Here, you can do business with many different products without paying any fees in advance. Besides, AliExpress also supports users with some interfaces at affordable fees to design their website.
SaleHoo
SaleHoo is one of the largest wholesale trading platforms in the world. Currently, the number of users using this platform is mainly in the United States, the United Kingdom, Canada, and Australia.
After nearly 20 years of establishment, SaleHoo has attracted many users with outstanding features, such as a wholesale directory, market research lab, and SaleHoo stores.
Oberlo
Oberlo is a business application designed specifically for Shopify and connected to AliExpress. Many businesses have chosen this application for wholesale dropshipping because of its many outstanding advantages. Besides, the registration procedure at Oberlo is quite simple, so you can complete it quickly.
Spocket
Spocket focuses mainly on dropshipping from suppliers in the United States and Europe. The biggest advantage of this platform is that it provides many quality items with a reputable and fast delivery policy. In addition, the product management process here is also strictly implemented to bring the best experience to users.
Read more: Top 10 Best Wholesale Suppliers for Dropshipping in 2024
2 Tips for success in wholesale dropshipping
Increasing profits in the wholesale dropshipping business is very important. If you are a beginner in this form, please refer to some of the following tips for finding reliable wholesale suppliers:
- Choose the right product: Consider products with high demand but low competition. These products will be easier to sell when users have high demand. On the other hand, low competition will help you promote the product to users more easily without competing with competitors.
- Build relationships with suppliers: Besides considering products, you must also build long-term relationships. Consider reputable suppliers to establish long-term cooperation.
This will bring you many benefits in business, especially optimizing profits. In addition, when you have a good relationship, you will not have to worry much about the problem of sudden out-of-stock supply.
Conclusion
Above is all the information about the definition of what is wholesale dropshipping. This form of business brings many benefits to businesses, especially optimizing profits in trading.
If you plan to start with wholesale dropshipping, quickly research the market, supplier products, and platforms immediately. In addition, do not forget to visit and follow SourceVietnam.com to update more outstanding news about the business market!
FAQ
What are the benefits of wholesale dropshipping vs. retail dropshipping?
Wholesale dropshipping helps sellers optimize profits when purchasing in large quantities. However, the exchange is entire. You should consult many different sources online, and the supplier will deliver the goods, so inventory will not occur. From there, the supplier can save maximum warehouse costs.
How do I find reliable wholesale dropshipping suppliers?
You should consult many different sources to find a reputable wholesale dropshipping supplier. Besides, ask for their operating documents to ensure the necessary business certifications.
What platforms are best for wholesale dropshipping?
There are many wholesale dropshipping platforms for sellers to choose from when doing business. However, it would be best to consider choosing large, long-standing platforms such as Shopify, Spocket, Oberlo, AliExpress, and SaleHoo to get the best benefits.
Is wholesale dropshipping a sustainable long-term business model?
While wholesale dropshipping offers a low-risk entry into e-commerce, its long-term sustainability depends on factors like market competition, profit margins, supplier relationships, and the retailer’s ability to provide value-added services or unique product offerings. Success often requires continuous market research, effective marketing strategies, and exceptional customer service to differentiate from competitors.
