Wholesale vs Drop Shipping prices, shipping

[trosky]

Hey guys, questions for you guys buying wholesale in the US. I have a few wholesalers for the items I'm interested in reselling, legit ones, where they require resale tax ID and getting approved to see wholesale prices, don't have minimum requirements etc. Most of them also offer dropshipping for free or $1/$2 per order, so my question is, what is the benefit margin % wise between buying a pallet for example and selling and shipping yourself, aren't the shipping prices the same they will charge for drop shipping and what I'd pay to ship myself, or even worse if they have discounts with the shipping companies or flat rates?

Can those wholesale prices be negotiate it down even more by buying in large quantities? And enough to endure the time and opportunity cost of shipping, storage, etc of doing it yourself?

Trying to see which plan is the best and worth the effort.

Thanks for your input guys

[rsot]

Wholesale approach allows for better assurance of quality by YOURSELF /recommend

[trosky]

I know that's one of the benefits of wholesale, I just don't think it's worth it at least in the beginning. What do you guys think about starting drop shipping that way I can deal with a wide variety of products and find the key ones with the best margin and wholesale those...is that a good strategy to start? Also I'm not doing this full time, have a good paying full time job but love this so want to do it seriously too and the extra money is great

[rsot]

Extra money....hmm

[trosky]

What's wrong with that?

[Lolitax]

Originally Posted by trosky

What's wrong with that?

There's nothing wrong with making extra money outside your day job.

[BigCJ]

I just rather have the items in my hands to inspect them. Just too many variables with dropshipping.

Pros and cons for each

[jeffweico]

I'm not a big believer in drop-shipping, UNLESS you are absolutely certain that your supplier is honest and reliable. Because if they are a fly-by-night, it is a very good way to lose a lot of money as well as your account. Most people who start out and want to drop-ship exclusively end up failing at some point. Both eBay and Amazon allow it, but frown on it.

If I am successful with a specific product, I always buy in bulk and ship myself. I use drop-shipping to SUPPLEMENT my sales. Let's say I was selling clocks. Most of them I would stock myself. But, in order to offer more variety and more expensive clocks, I might have a few drop-shipped in order to conserve money - in the case of expensive items - or to reduce the chances of getting stuck with items I cannot sell - in the case of less popular items.

I might also consider drop-shipping unusually large or heavy items, or items that are custom made.

Movie screens come to mind. Outside of a few popular sizes, most movie screens have to be ordered directly from the factory. One reason is the size, but the other reasons are the options - matte vs reflective, beaded, etc. In the case of heavy items, it might be better to drop-ship to save on shipping costs.

The worst cases I have seen are people trying to sell items via drop-shipping from suppliers in China. Delivery takes too long, some are not reliable and many are selling counterfeits. Before they know it, the seller is dealing with a ton of complaints and has customers demanding refunds and has their account closed. It happens all of the time, even with the best of intentions.

[trosky]

Jeff that is exactly my plan, find the best products from the wide variety I can offer and those I can buy bulk after testing the market and margins and making sure I will be able to sale them, are not seasonal etc. I think a combination is perfect like you said for the reasons you mentioned. And I agree with you I will only be drop shipping from long time suppliers that are and ship from the US and REQUIRE a resale licensed, that way I limit my competition and is more likely to be a reputable wholesaler.

The key is finding those diamonds in the rough items from each wholesaler that will become your main items for profit long term, and since market is always changing having other items and keep introducing new ones allows for more of those diamonds to appear

[jeffweico]

I would say, do your due diligence. Check the company's BBB rating and use Google to search for any reviews you can find. Pay attention to any reviews claiming they failed to ship orders or things like that which would be relevant to your situation.

Just because a company requires a sales-tax number (the usual requirement) it is not proof of their reliability.

[bananaappeal]

Originally Posted by trosky

I know that's one of the benefits of wholesale, I just don't think it's worth it at least in the beginning. What do you guys think about starting drop shipping that way I can deal with a wide variety of products and find the key ones with the best margin and wholesale those...is that a good strategy to start? Also I'm not doing this full time, have a good paying full time job but love this so want to do it seriously too and the extra money is great

defiantly pro's and con's.

something to consider is if dropshipping consumable products - alot of agents offering the service can leave a calling card within the package itself thus stealing business and contacts.

KNOW YOUR AGENT

[jeffweico]

Originally Posted by bananaappeal

defiantly pro's and con's.

something to consider is if dropshipping consumable products - alot of agents offering the service can leave a calling card within the package itself thus stealing business and contacts.

KNOW YOUR AGENT

That is an excellent point. This is one of the many reasons I generally don't like drop-shipping. You give up too much control.

[Dmshark25]

It's best to have your own inventory but if you find a couple nice items than drop shipping could work, but not for every product you offer

And it's always a good idea to purchase an order sent to yourself so you know shipping times and can see the actual item

And than once it starts to sell and becomes a hot item purchase in bulk, if it sells but not many items per month keep it as a drop shipping item

I only have 2 items I drop ship and in the description I make it known that it's coming from my supplier direct and may take 7-12 days , something along them lines, I don't use the word drop shipping, and make it sound like they are getting this great product at great price but may take little longer in shipping

This is something to do on established accounts and very few items I find it to be effective

[trosky]

A lot of great points here thanks guys!

So it's most likely possible to negotiate those wholesale prices even lower when buying bulk? What is a good percentage to shoot for? Varies by quantity and product I'm guessing, I've also seen some offer free shipping on order over $500/$1000 for example so that comes to play

[rsot]

Originally Posted by trosky

A lot of great points here thanks guys!

So it's most likely possible to negotiate those wholesale prices even lower when buying bulk? What is a good percentage to shoot for? Varies by quantity and product I'm guessing, I've also seen some offer free shipping on order over $500/$1000 for example so that comes to play

Percentage is never set - feel your seller out - see the market - make decisions

[bananaappeal]

Originally Posted by trosky

A lot of great points here thanks guys!

So it's most likely possible to negotiate those wholesale prices even lower when buying bulk? What is a good percentage to shoot for? Varies by quantity and product I'm guessing, I've also seen some offer free shipping on order over $500/$1000 for example so that comes to play

Depending on your Agent and platform used to purchase. Here in Australia we are very limited for small time retailers in regards to buying from liquidation sites etc etc.. but we are blessed with a outrageous mark-ups on brand name and trendy consumables as we eat it up like kangaroo steaks.

In regards to "me personally" dealing with overseas wholesalers/agents you basically build REP with them and go from there.

The only real negotiation on prices for said bulk items all has to do with your relationship with your agents - It never hurts to ask for a better price!

[jeffweico]

Originally Posted by Dmshark25

It's best to have your own inventory but if you find a couple nice items than drop shipping could work, but not for every product you offer

And it's always a good idea to purchase an order sent to yourself so you know shipping times and can see the actual item

And than once it starts to sell and becomes a hot item purchase in bulk, if it sells but not many items per month keep it as a drop shipping item

I only have 2 items I drop ship and in the description I make it known that it's coming from my supplier direct and may take 7-12 days , something along them lines, I don't use the word drop shipping, and make it sound like they are getting this great product at great price but may take little longer in shipping

This is something to do on established accounts and very few items I find it to be effective

That is actually how drop-shipping started. Retailers wanted to have a broader range of products, but didn't want to take a risk on higher-end inventory they were not sure if they could sell. So, manufacturers would give them a sample item, either for free or at a discount for their showroom. When they got a sale, the manufacturer would ship the product directly to the consumer.

Back in the day, this happened a lot with TV's, pianos, furniture, grandfather clocks and the like. It was meant for additional sales. Drop-shipping as a stand alone business is a more recent development, maybe 30 years old.