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What is Wholesale Drop Shipping
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In order to understand the concept of wholesale drop shipping, one must learn first the parties involved in the system. These are the manufacturers, the dealers, the retailers, and the end-customers. The manufacturers, taking it from the word itself, are the ones who create the products. The dealers, on the other hand, are the ones who buy products from manufacturers and then sell them to retailers. Retailers then sell the products to the end customers who in turn will use the products.
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The question here is, why can’t two parties just directly contact each another, why should they deal with middle parties? This primarily lies on the number of orders. Because most manufacturers deal with massive production of items, they only accommodate parties who order in bulk.
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Dealers are the ones who have enough financial abilities to order items in bulk, and these dealers gain profit by putting additional charges on top of manufacturers’ prices and selling them to retailers. Retailers then increase the prices of items they sell from dealers to earn revenues. What is left for the end consumers to buy therefore are items topped with additional charges and fees.
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One of the major culprits of extra fees is the cost of transportation and delivery, and this is what wholesale drop shipping attempts to minimize. Through wholesale drop shipping, dealers and retailers can market and sell products without the need to stock them, make inventories, and pay for shipping fees.
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What they do is just to get orders from clients, order the items to the manufacturers, and then let the manufacturers ship the products directly to the clients. With reduced costs, dealers and retailers don’t have to charge high, they can widen their product lines, and they can expand their business without releasing expensive capital.
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