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Dear Supplied Customers,

Each year, our factory partners shut down operations in celebration of Chinese New Years (CNY).

Any order placed today will be delivered at the earliest March 15, depending on the severity of FedEx backlogs post-CNY.

You should still place your order, because your order will be at the front of the queue, once we resume operations again.

Please plan your inventory-shopping accordingly. We are always here to help if you need us!

The Supplied Team

Drop Shipping vs Buying Wholesale: Pros and Cons

November 15, 2020 08:35

 

All of us here at Supplied like to think of this time in history as the golden age of e-commerce. The rise of platforms like Shopify, Etsy, Facebook Shops, and so many other platforms make it easier than ever for ANYONE to start a successful boutique online. 

 

But with all of those resources come A LOT of decisions. Choosing to start your own online boutique is only the beginning – next, you’ve got to figure out what platform you’ll use to sell your stuff, your marketing strategy for reaching potential customers, and where you’ll get all of these items from in the first place.

 

Drop-shipping and buying wholesale boutique items are the two most common ways small boutique owners source the items they sell. The best method of sourcing for you depends on your budget, your business goals, and your marketing strategy. We’ll go over pros and cons of each to help you make a more informed decision.

 

What Is Drop-Shipping?

Stores that drop-ship don’t keep any of the products they sell in stock. Retailers who go with this method work with manufacturers or distributors to sell and market those products. Then, when a customer purchases a product, the manufacturer sends that product directly to them.

 

Drop-Shipping Pros:

  • Don’t have to worry about fulfillment – the manufacturer packages and ships all orders
  • Requires less of an investment up front – you’ll have almost no overhead since you don’t have to purchase inventory
  • Flexible location – you can run a drop-shipping business from anywhere in the world
     

Drop-Shipping Cons:

  • Lower margins – with such low startup costs, drop-shipping is very competitive and usually has much lower margins than buying wholesale does
  • Shipping hiccups – if you work with multiple suppliers, shipping can be difficult to price and manage
  • Supplier errors – sometimes, suppliers will make a mistake sending the wrong order or unexpectedly running out of inventory. You’ll have to own those mistakes. 
  • Less customization ability – you’ll have less opportunity to customize packaging and the product itself
     

What is buying wholesale?

Buying wholesale is a more traditional retail method. Retailers purchase inventory from a wholesale supplier at a highly discounted rate. Then, they sell that inventory directly to prospective customers at marked-up retail prices. 

 

Buying Wholesale Pros:

  • Higher margins – you’ll usually make more money per sale if you buy wholesale.
  • More control – no need to rely on overseas suppliers for fulfillment and keeping your customers happy.
  • More customization ability – make your packaging as cute and personal as you’d like.

Buying Wholesale Cons:

  • Higher startup costs – you know what they say… you have to spend money to make money! You’ll have to buy your inventory upfront. 
  • Less flexible location – if you have a great team, you can still run your boutique from anywhere, but being in charge of inventory and fulfillment gives you a little less flexibility.
  • Fulfill your own orders – you’ll be in charge of packaging, shipping, and fulfillment.

 

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