Dropshipping vs Wholesale Comparison Which is Best?

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We have some exciting news for you: now is the ideal time to open your boutique.

It’s easier than it’s ever been. You have all the power in the world to launch a successful online boutique that feels exactly like YOU, thanks to low startup expenses and a broad selection of quality boutique items accessible to source from all over the world.

However, if you’ve recently decided that you’re ready to open your boutique, you’re only getting started with the decisions you’ll have to make.

After that, you must develop a business model. You must plan how you will make money, locate consumers, and – perhaps most crucially – how you will source high-quality boutique items that your clientele will adore. After all, it’s all about what you’re selling and how much your buyers want it at the end of the day!

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shopify dropshipping store set up

Buying wholesale and Dropshipping are the two main methods that boutique owners like you obtain things to sell to their customers. Your budget, goals, and business strategy will all influence which boutique model is best for you.

We’ll go over the differences between buying wholesale and Dropshipping, as well as the benefits and drawbacks of both, and whether you should buy wholesale or drop-ship in your new boutique in this post.

Buying Wholesale vs. Dropshipping

While buying wholesale and Dropshipping include obtaining things at a low cost and reselling them to clients at a profit, the initial fees, fulfillment, and quality control are vastly different.

This terminology may be odd to you if you’re new to the whole owning-your-own-boutique thing, so let’s go over what these two options include in more depth.

What is Dropshipping, and how does it work?

Dropshipping is a type of retail fulfillment in which a store sells things without having them in stock.

On the other hand, drop-shippers engage with manufacturers or distributors to buy and sell things that they maintain in stock. When a customer orders a product, it is shipped straight to them by the producer.

In a nutshell, a distributor provides the goods, you (the retailer) find customers to buy them, and the distributor sends them to your customers.

The consumer pays the retail price plus shipping that you establish, you pay the wholesale price to the suppliers with the money you make from the transaction, and the balance is profit.

When you adopt a Dropshipping model, your main job is to sell, not to fulfill orders.

Because of the minimal initial expenses, Dropshipping might be an enticing boutique model. You have almost minimal overhead because you don’t need to buy any inventory to get started. You also don’t have to worry about fulfilling orders; your job is done once a buyer has purchased.

Having less control over the fulfillment process, on the other hand, can be a disadvantage. You have less control over the consumer experience and the quality of the things you sell due to this. Furthermore, because Dropshipping is so competitive, it frequently delivers lesser margins. Furthermore, about 90% of drop-shippers fail inside the first month.

What is Buying Wholesale?

Purchasing wholesale is a more conventional form of retailing. In this strategy, retailers buy inventory at a steep discount from a supplier, and the inventory is then sold straight to clients at retail rates marked up.

A wholesale supplier provides the inventory in this situation, and you (the retailer) order the inventory you require and have it delivered to your house or company. You then ship that inventory straight to clients when they make a purchase.

You’re involved in every step of the process: choosing things, ordering inventory, selling the items, and shipping them to clients. You are the beginning and conclusion of customer service.

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shopify dropshipping store set up

Buying wholesale can have a wide range of costs and processes from one supplier to the next — “wholesale” doesn’t always imply “best price.” On the other hand, a good wholesale provider might offer low wholesale rates, free shipping, excellent customer support, and no minimum order amounts. With the appropriate wholesale source, you’ll be able to earn significantly better profit margins than you would with Dropshipping.

Buying wholesale can be a profitable boutique strategy because it allows you to control the customer experience and increase your margins. It’s perfect for business owners that want to build a brand rather than make a quick buck. On the other hand, buying wholesale comes with higher upfront expenses and the requirement to fulfill your orders.

Pros & Cons of Dropshipping

Make no mistake: if you deal with the proper supplier, Dropshipping may still be a very profitable business strategy. However, because it’s so simple to get started and doesn’t require a lot of capital, it’s extremely competitive and frequently has razor-thin profit margins.

Here are the key advantages and disadvantages of Dropshipping to consider:

Pros of Dropshipping:

You don’t have to be concerned about the satisfaction

Your supplier will handle everything, so there will be no trips to the post office, no packing issues, and no need for a crew to fulfill orders, and so on.

Lower upfront costs

There’s no need to buy the stock before making a sale. You’ll only pay the wholesale price of things and any associated fees AFTER you’ve made a sale, which means you won’t have to pay any of those costs out of pocket as long as your pricing is high enough.

Do it from anywhere

You won’t have to worry about finding a place in your closet for all of your clothes because your supplier/manufacturer is the one who keeps all of your inventory. You can also sell from anywhere on the planet.

Cons of Dropshipping:

Lower profit margins

Dropshipping is particularly competitive because of its minimal initial costs, and it often has significantly smaller margins than buying wholesale.

Low success rate

Almost 90% of drop-shippers fail during the first month of operation — not the best chances!

Shipping hiccups

Shipping can be challenging to price and manage if you operate with different vendors. Furthermore, if your supplier makes a shipment error, your clients will still hold you liable.

Supplier errors

If your supplier makes a mistake and sends the wrong order or runs out of inventory unexpectedly, you’ll be held responsible – even if you had nothing to do with it.

Less customization ability

There will be no pleasant unboxing’s, branded packaging, or personalized thank-you notes because your supplier will handle all of the wrapping, which will most likely be generic. You also won’t be able to customize the products themselves.

You’ll never see the products.

When you drop-ship, you have no direct interaction with the products, so you won’t know how good they are, won’t be able to show them off on Facebook Lives, and won’t be able to honestly advocate for them to your audience. (Unless you order a piece at full price for yourself.)

Pros and Cons of Buying Wholesale Inventory

Purchasing wholesale can be extremely profitable, especially if you work with the proper provider. While some suppliers are only middlemen eager to sell their commodities at a hefty markup, others provide high-margin products at low pricing.

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shopify dropshipping store set up

Buying wholesale has been difficult in the past, especially for new enterprises with low funds. High pricing and big minimum purchase quantities for far too long kept new companies out of the game.

Supplied was created to help business owners buy wholesale at reasonable prices with free shipping and no minimum order sizes. Supplied even provides flexible payment arrangements, allowing business owners to defer paying for their inventory for up to six months.

On the other hand, buying wholesale merchandise usually necessitates a larger initial investment and more hands-on involvement in your company.

Here are some advantages and disadvantages of buying wholesale merchandise to think about:

Pros of Buying Wholesale Inventory:

Higher profit margins

You’ll normally make more money per sale if you work with the proper source and select reasonable, on-trend merchandise.

Increased control

There’s no need to rely on outsourced fulfillment. When you buy wholesale, you’re the one in charge of making sure orders are delivered on time, your clients are satisfied, and there are no mix-ups.

More options for personalization

Who doesn’t enjoy cute packaging? You may personalize your products, packaging, and even the charming little notes you include in the package when you ship your inventory. That way, it’s also a lot more IG-worthy — and more social shares Equals more prospective clients!

Quality control

To ensure that the things you’re giving out to your customers are worthy of your brand and clientele, inspect, feel, and even smell them.

Marketing assets

When you have your things in hand, you may utilize them to sell themselves through try-ons, themed photoshoots, Facebook Lives, and other methods.

You can sell online or in person.

You can sell it whenever the opportunity arises in a brick-and-mortar boutique or pop-up shop if you have your inventory. (This will save your customers money on shipping!)

Cons of Buying Wholesale Inventory:

Higher startup costs

You’ve heard it said that you have to spend money to make money. You’ll need to purchase your goods in advance, which means you’ll need to set aside some cash to invest in your business before you start making any money. (However, Supplied does offer more flexible payment arrangements.)

If you go that route, you can sell your products for up to 6 months and utilize the money to pay for your inventory!)

Less flexible location

Even if it’s only a storage unit or your closet, you’ll need somewhere to store all of your products. You can still run your boutique from anywhere if you have a fantastic team, but your business will be in charge of inventory and fulfillment.

Fulfill your orders

Packaging, shipping, and fulfillment will be your responsibility. (Or appointing someone else to handle those tasks!)

More risk

If you order 1,000 dog bowties but only sell 10, you’ll have to figure out what to do with the rest of the stock. (And how you plan to recoup your investment!) It’s a smart idea to reduce that risk by ordering a smaller quantity of inventory first and observing how your audience reacts to new products before making a larger investment.

This is our own Service Offered by the Blog Author.

shopify dropshipping store set up

Should I Buy Wholesale or DropShip in My Boutique?

There is no one-size-fits-all answer when it comes to determining whether to buy wholesale or dropship. Several considerations, including your budget, business goals, and marketing approach, will determine the optimal boutique inventory model for you.

Dropshipping is a wonderful place to start if you’re seeking to make some extra money on the side and don’t have much money to invest in inventory. It’s also inexpensive and simple to do on the side.

Just be prepared to do some major product and competitor research — while Dropshipping is less risky, it is highly competitive, making serious money can be difficult. To ensure optimum success, we recommend putting in the effort to discover a good supplier and the proper products.

Buying wholesale is better for the long run if you’re interested in starting a business, such as a boutique with its distinct brand. Sure, it necessitates some initial investment and risk… But every worthwhile business does, too! And, with the appropriate source and goods, your investment might soon pay for itself. (Giving you extra money to put back into your company!) Purchasing wholesale inventory allows you to increase your profit margins and have greater control over your company.

Start with Supplied if you think buying wholesale could be the best fit for your business goals. It’s the ideal place to start establishing a successful boutique business, with over 250,000 wholesale boutique items to pick from, flexible payment options, no minimum order quantities, and fast & free shipping over $150.

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