Have you ever been torn between deciding if you should buy wholesale inventory in bulk or start drop shipping instead? Are you kind of unsure what the difference even is between the two, let alone, which one is right for you? Well, I am about to walk you through it.
Okay. So let’s just break down the top three differences between traditional fulfillment and dropshipping.
Purchasing inventory
In traditional fulfillment, you purchase inventory upfront. This means you will source suppliers that have the items you want and purchase them in large quantities. So two questions you should ask yourself before you purchase bulk inventory are what if the items that you pick don’t sell the way you thought they would? How will you even finance this massive expensive purchase? With drop shipping on the other hand, you never buy inventory in bulk. Therefore, eliminating that risk factor and saving yourself a ton of upfront cash.
Needing a location
In traditional fulfillment, you are tied to a physical location. What this means is that inventory you purchased must be shipped to a location and then shipped from a location every time you make a sale. So be sure to consider where you want all that merchandise shipped to and how you will store it. What purchases will you even need to make beforehand to facilitate shipping your products? You may need printers. You might need labels or tissue paper, or boxes, or even a paid support staff to help you get it all done. As a drop shipper, however, you are never tied to a physical location. Yeah. Your entire business can be run from anywhere in the world as long as you’ve got wifi. Remember drop shippers don’t store, inventory, package, or even ship their own products. That entire process is handled by our suppliers. It is amazing.
Storing Inventory
with traditional fulfillment, we discussed that you have to buy your inventory up front and in bulk. So your next step is figure out where to even keep that inventory. Most owners will purchase a large storage unit or even a warehouse. So this is just necessary for their business model, but it does come with a lot of risk. Firstly, the price. You haven’t even made a sale yet, but you’re already paying costly storage fees? Next, you must do all the shipping, which takes valuable time away from the process of actually growing the business. Or if you don’t do the shipping yourself, you have to pay to outsource that help. Either way, these are funds most brand new business owners just don’t have yet. With drop shipping, there is never a need to pay for warehousing or fulfillment centers. These costly services are simply covered by your suppliers and built to your business model.
So which fulfillment method is right for you? Let me know in the comments, are you team boxes stacked up to the ceiling or team making money from your cell phone? I know what I’m choosing. If you want more help deciding, click here to watch my free two hour dropshipping training. It goes way more in depth on each one of these touch points to give you the best chance at getting started as a successful drop shipper.
