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How Does Wholesale Dropshipping Work? A Detailed Guide

How Does Wholesale Dropshipping Work?

Wholesale Dropshipping has become a booming business.  This business is global in nature because everywhere in the world there is some Dropshipping taking place.  It is a very simple process that retail businesses enjoy using.  The wholesale Dropshipping business has one primary function and that is to move merchandise from warehouse to customer for the retail businesses.  Because of this wholesale Dropshipping business, people all over the world can enjoy merchandise from any other part of the world.   Before the start of wholesale Dropshipping, the same merchandise was shipped by the wholesaler and again by the retailer before the customer received it.

In other words, the retail company used to order from the wholesale and then have to ship to the customer.  With the use of wholesale Dropshipping service the retailer can simply send the name and other customer information to the Dropshipping company and the wholesale Dropshipping company will send the merchandise directly to the custom.  Dropshipping has become as common as going to the post office.  Profit by the retailer is made on the difference between the wholesale price and the retail price.  Every other company at one time or another uses a Dropshipping company to deliver goods to a customer. The Dropshipping business has helped many small business owners to stay afloat.  The expenses of a company are considerably less when Dropshippers are used.

The complete shipping process for the retailer is modified and the wholesale Dropshipper redefines the shipping process.  Many jobs have been reclassified because of Dropshipping.  Some personnel have found it necessary to do other jobs than what they have been accustom to doing.
Just about every other business uses a Dropshipper to move merchandise to customers.  If you have an online business or a catalog business Dropshipping is one of the best way to get merchandise to your customer.  Dropshipping is easy and a friendly process that can be used and enjoyed by all businesses.  Dropshipping has enhanced the bottom-line for many large and small businesses The two most important things that Dropshipping helps the retailer with are, it cuts down on paperwork and it cuts out the shipping steps.

With wholesale Dropshipping a whole new world economy has become available.  The retailer can find customers all over the world any items anywhere in the world that you may have a need for or a desire for can be found online and dropshipped to you. What ever you wish to sell can be found in one form or another through the wholesale Dropshipping process. Dropshipping has become a quick and easy way to get started in e-commerce.  Two other advantages of Dropshipping are in the case of a small business no money is invested up front; and the second advantage is that there is no danger of having unsold merchandise in you inventory.  After all when you use the Dropshipping methods you purchase merchandise only when you have sold merchandise.  Therefore you do not have to worry about an oversupply of one item and an undersupply of another item when you go the wholesale Dropshipping way.

How Dropshipping Helps a Business?

Dropshipping can add to the bottom line of any business large or small. Many businesses thrive off of dropshipping because it cuts down on their overhead.  Services can be cut out and staff also when a business is dropshipping.  For that reason, businesses find it economical to dropship to most of their customers.  Dropshipping gives businesses flexibility in their day to day operations. A limited number of staff members can be used to get a large volume of work done.  This adds to the bottom line at the end of a year.

Dropshipping also cuts down on staff training and orientation.  There is no need to train personnel how to ship merchandise when a dropshipper is used.  If it is proprietorship business, and the proprietor works from home, there is a tremendous savings in the gas bill alone.  One room in the home can be set up to operate a successful business if a dropshipper is used.  So there is no need to buy furniture and expensive equipment.  The average home operation can survive and thrive off of a few pieces of office equipment.

The computer is one of those pieces of equipment that is a must have for the average small home business.  In addition in order to dropship it becomes necessary in many instances to have access to a fax machine.  And of course you must have ma bell to call your dropship company from time to time and your customers.  Most of the dropship companies that have been in business for a while and know their way around will give you a quick turnaround on all of you orders.  When you use a dropship company there is no competition fold good-quality help. 
When you compete for help that increases your expenses because good help has to be paid a decent salary and you have to factor in benefits such as insurance, sick leave and paid vacations.  Drop shipping is a wonderful tool for small businesses with limited staff and limited resources. For many businesses it is hard to see a difference between expenses and income that equals profit.  So choosing a dropship company is of uttermost importance.

After all businesses are in business to make a profit.  But by using a dropship company, the chances of making a profit is more of a reality.  When you factor in all of the benefits that have been deleted by using a dropship company and all of the expenses saved by working out of your home, chances are great that you will have success in your business. Drop shipping is a great way to cut corners when you are in business.  You don't even have to keep up with the changes in shipping rates and rules and regulations.  We all know that they are constantly changing especially since the 911 event. 
Dropshipping helps a business to become more efficient and gives the customer a quicker turnaround.  All customers want a quick turnaround when an order is placed you sometimes start looking for the item the very next day or two after the order has been placed.  Drop shipping gives one of the fastest turnaround of all methods of ordering and shipping. Let's face it they have the tools and the necessary staff to do the job right.  Drop shipping is an asset to any business.

How Much Does Drop Shipping Cost in 2024?

The cost of Dropshipping is determined by the Dropshipper.  It is very important for you to know the cost of Dropshipping before you start Dropshipping.  You need to thoroughly research and look for companies that offer Dropshipping service.  Some wholesale companies as you no doubt know will not dropship for you. There are others who will dropship for an additional fee.  It will enhance your bottom-line if you find a company who’ll dropship at no cost other than shipping and the cost of the merchandise.  Some companies will charge a small membership fee at the beginning nevertheless this membership fee will be given back to you after you have made a certain number of purchases.

If you sign up with a company that charges a monthly fee you could end up giving away your profit for a month or two. You need to know all the cost of Dropshipping so you can accurately calculate your profit.  Be sure you get an itemized list of expenses from your Dropshipper.  You need to know the cost of the item, the charge for shipping, and taxes if any.  Be reminded that some states charged an additional tax on purchases.  If you are paying a monthly fee to a Dropshipper you have to also prorate that fee into the total cost.

Remember there are always scams lurking to take advantage of beginners and others in any situation.  You can always check with the Better Business Bureau to see if there have been complaints about the business dealings of any one of the Dropshippers you find.  Check with your Dropshipper also to see how your account will be calculated.  It is important to know whether you will be charged piece by piece or whether you will be charged on a monthly time table.  Find out if the company accepts returns or what the return policy is.

If the company does not accept returns, then you may have to factor into your records a loss for that month.  So that you will be able to adequately determine the cost for Dropshipping, get all this information in writing before you start working with a company.  Drop shipping can be a very efficient way to start a business it can enhance the bottom-line of any business but you need to know all the facts up front before you start.  Even more so you need to let your customers know the return policy because eventually this can define your bottom-line.

Don't forget to get the company’s policy for damage merchandise. Some companies will accept returns on damage merchandise and some companies will not accept returns on damage merchandise.  Wholesalers that dropship sometimes are reluctant to accept merchandise that has been opened and damage.  So make sure you get in writing the policy the company will adhere to for damage merchandise that has been opened.  Damage merchandise that the company will not accept as a return will be part of your Dropshipping cost on the bottom.


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