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What is the Difference Between Drop Shipping, Light Bulk and Wholesale?
When ordering products from a retailer, the retailer may utilize different procedures to get the product to the customer or business. The three most popular procedures are drop shipping, light bulk and wholesale. Depending upon the specific order and/or the requests of the customer, one or all them may be utilized. To make the best decision as a retailer, it is important to know the specific differences between each procedure.
Drop shipping is an agreement to have your vendor ship directly to your customer. The world of e-commerce has showed a marked increase in the use of drop shipping. If starting your own business online is of interest to you, then drop shipping may be the answer. No need to deal with developing new products, finding a storage area for these products, or developing a shipping/receiving infrastructure. What drop shipping does is allow you to sell high quality products on your website and have someone else worry about getting the product to the customer.
Though it sounds like a perfect arrangement, especially for the Internet business marketer, there are some pro's and con's. In addition to not having to worry about shipping your product out to the consumer there are a few other benefits as well. It will save you money. Because of the fact that you will not have to tie up funds in inventory, you are able to put this money to another needed area of your business instead. Also, since you did not need to purchase inventory you do not need to worry about your product becoming outdated. You can instantly remove one product from your inventory and begin to carry another in its place.
As far as the negative aspects of drop shipping, most important would be the competition and the abundance of it. Make sure the products that you are choosing promote are unique. Do some research prior to deciding which product to drop ship. Make sure there aren't hundreds or even thousands of entrepreneurs promoting the same exact item. Competition is good, but if you can't compete with the competition, you are wasting your time and money.
Another popular shipping procedure would be light bulk wholesalers. With the increasing popularity of online retail establishments, light bulk wholesaling refers to working with real wholesalers who agree to send small bulk quantities of a product to home based Internet business entrepreneurs.
The way light bulk wholesaling works is that the wholesalers will ship a small quantity of the product you are interested in. This will be able to be stored directly in your own home. After viewing the product, then you would develop your e-commerce website. Then as people make purchases from your website you would personally pack up the product and ship it to the customer. When you run out of product you would then turn to your light bulk wholesaler and order more product. Similar to drop shipping, but since you are shipping the package out yourself it can save you money in the long run. You do have inventory and storage costs, but you can often get your products cheaper from the vendor than if you do drop shipping.
Lastly is the process of wholesaling. Wholesaling is simply the process of selling large quantities at a reduced price to be resold by a retailer. When buying a product wholesale, you must have to ability to store a large quantity of the product you have chosen to resell. You would then package and ship the product to your customers at the time of the sale. Though you are receiving the product at a reduced rate, you must take all other factors into consideration when choosing this distribution method. Including space needed, the chance your product may become obsolete and you would be stuck with large quantities of the product and having the ability to ship each sale out yourself.
When deciding what distribution method to utilize for your business, take all factors into consideration. Though there are pro's and con's for each of them, you must choose the one that best fits your lifestyle and the goals that you are attempting to achieve.
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