How to Setup Dropshipping and Wholesale Channels for New Revenue Streams

by Ecommerce

Are you looking for new revenue streams as your ecommerce store develops? Wholesale and dropshipping may be the solution. With wholesale and dropship agreements, you can sell your products in bulk and rely on someone else’s store to do the work of making sales. 

It’s also a way to build brand awareness. If your products carry your brand name on the tags or on the product itself, then you’ll be able to build brand awareness and name recognition every time one of your items sells on a retailer’s site. 

What is Dropshipping? 

Dropshipping is a business model in which the business sells products that they do not keep stock of. When an order is placed, it is passed to a third-party supplier who ships and fulfills the order of the business.

A dropshipping business can set up a store with very little overhead and start selling right away. Instead of keeping inventory, these online stores will work with suppliers to fulfill the orders directly. That’s the biggest difference between dropshippers and traditional ecommerce stores — keeping inventory. Other ecommerce stores usually keep inventory in stock at their own warehouse or retail location. 

Dropshipping relies on product sourcing from suppliers that can ship the product directly to the consumer. To start dropshipping, you’ll need to find dropshipping products, add these products to your sales channels, and start building your ecommerce business from the ground up! 

What is Wholesale? 

Wholesale is a method of selling goods. When you wholesale your products, you sell the goods in large quantities to a retailer, who then sells your goods for a higher price. The wholesaler sells to a retailer, who then sells to the consumer. The wholesaler adds their margin and the retailer adds their own margin on top of that. 

What’s the Difference between Dropshipping and Wholesale? 

Dropshipping and wholesale channels are very similar, but the key difference is who has ownership of the inventory when the retailer makes a sale. The inventory stays in the possession of the dropshipper, and the dropshipper handles fulfillment whenever a sale is made. 

For a wholesale relationship, the retailer is responsible for the inventory. They purchase the amount they need from the wholesale store, then store the inventory in their own space or warehouses, and they handle fulfillment when an item sells. 

Is Wholesale or Dropship Right for My Store? 

In most cases, selling wholesale and dropshipping is another chance to get revenue for your store. However, there are some cases in which wholesale and dropshipping relationships won’t work for your business. 

Wholesale doesn’t work if you have low margins already. If you are stocking items that you purchase from someone else, you also aren’t a good candidate for wholesale, because the retailer can go direct to your supplier to get the products at the best prices. 

Wholesale works best when you manufacture and produce your goods yourself, so that your costs are low and your margins allow for a wholesale relationship with a retailer. 

Dropshipping requires that you have the infrastructure to fulfill the orders quickly and efficiently. You’ll need a way to sync orders from your retailers to your fulfillment centers, so that you can process and ship the orders. If you’re still importing by hand, then you may need to consider upgrading your system so that you don’t get overwhelmed when the orders start rolling in. 

Benefits of Dropshipping and Wholesale

Revenue

Who doesn’t want additional revenue? Dropshipping and wholesale orders provide additional revenue so that you can continue to grow. You’ll skip the marketing costs associated with selling direct to consumer, and instead just take your share of the sale. The retailer will work for the sales, and you’ll reap the benefits. 

Less Marketing Effort

While you still have to put in the time to find these dropship and wholesale relationships, the responsibility of selling falls on the retailer instead of you. The retailer is also working to sell and spending money on marketing, which you won’t have to do. You get to keep the revenue generated from dropshipped and wholesaled items, while the retailer has to spend the money to market these goods. 

Brand Awareness/Name Recognition

If you’re trying to build up your brand name, then selling in more places can help get your product into as many homes as possible. By including your brand name on the tags or stitched onto the clothes, you’ll build name recognition and create a loyal following, even if they didn’t purchase from your store.

How to Start Dropshipping

Sign up with Oberlo or another dropshipper. You’ll be listed on their website, where retailers can find you and negotiate the terms of your relationship. However, you’ll also be tossed in with a bunch of manufacturers. It’s hard to stand out in those conditions. 

Do It Yourself. The DIY approach requires nothing but elbow grease. You can reach out to the retailers that fit your products well and pitch them the idea of carrying your products. There are a few software solutions that can help you with importing and syncing orders, but you’ll have to do all the setup and maintenance for the relationship yourself. Or you can hire a manager to handle your wholesale and dropship retailers.

Try Carro’s Brand Partnerships. Carro’s partnership platform is built to seamlessly integrate with your store and your partner’s store so that order fulfillment is easy and simple. Carro’s Brand Directory also allows retailers and suppliers to easily find each other and get connected so that they can create amazing partnerships. 

Try Carro’s Brand Partnerships

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