The Impact of Using Wholesale Dropshippers to Your Profits
The Impact of Using Wholesale Dropshippers to Your Profits
Using a wholesale dropshipper for your supply chain management can impact the way you price your products as well as how you profit from a sale. The process of dropshipping in itself can save you big in several ways.
First, you can save by not hiring people to manage your inventory physically. ">Dropship suppliers let retailers pick up which inventory they want to display from an online catalogue, then this goes directly into the online storefront. There's no need to ship the product to the retailer first and keep it in a warehouse until the sale is made.
Next, there's savings in terms of order fulfillment. There is no need to hire an extra person or to negotiate fees with courier to handle the shipping of items. Once an order has been placed, all the retailer has to do is collect the payment and correspond with the client. He or she then sends in the order to the dropshipping company, who, in turn, will send it directly to the recipient.
These two things will significantly reduce your operations costs (which should be frontloaded to your cost of sales when calculating for profit). But the biggest advantage offered by wholesale dropshippers is the difference in acquisition cost. They usually get the products in bulk and could resell it to retailers at wholesale rates. This gives you a better profit margin. You could then decide to keep the earnings for yourself or to reduce your selling price to be more competitive in the market and capture more sales