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Home > Blog > Should I Dropship or Wholesale? Making the Right E-Commerce Choice

SHOULD I DROPSHIP OR WHOLESALE? MAKING THE RIGHT E-COMMERCE CHOICE



Women’s clothing has still taken to the center of the fashion stage in recent years, and more and more people want to join this industry. If you are considering starting an e-commerce clothing business, one of the critical decisions you will come across is how to source women’s clothing. There are two popular methods of dropshipping and wholesale, and each model has its unique advantages and disadvantages, read this article to get an informed answer about whether should dropship or wholesale and find out what is better for your women’s clothing business.


Shoud I Dropship or Wholesale


What Is Dropshipping and Wholesale


Before we discuss the pros and cons of the two methods, let’s acknowledge what is dropshipping and wholesale:


Dropshipping: Dropshipping is often token by small businesses owing to minimal upfront investment. You establish a partnership with wholesale women’s clothing suppliers who hold the inventory and fulfill orders instead of you. You display their clothing on your online shop for resale, and when you receive orders, you need to make a purchase on their site, once confirmed, they will send the parcel directly to your customers. 


Wholesale: Wholesale makes a flexible choice for online or offline businesses and needs a higher initial investment compared with dropshipping in general. It requires you to purchase wholesale clothing in bulk from the manufacturers or suppliers and stock the products in your own wardrobe, meanwhile, you take full charge of managing inventory and processing orders including shipping and after-sale service.


Dropshipping VS Wholesale


You may get a base knowledge of dropshipping and wholesale, let’s explore the differences between the two models and find the answer of which one is more suitable for your e-commerce women’s clothing business.


1. Financial Resources


Dropshipping is popular among boutique owners who have limited capital owing to without stock inventory, you just pay for the clothing after you have sold it to your customers, which enables you to save a lot of money in the starting and maintain a positive cash flow for the marketing.


On the contrary, wholesale requires significant costs in buying clothing in bulk and stocking the inventory before you receive orders from your customers, which makes it not a recommended choice for those with limited financial resources.


2. Risk Tolerance


Dropshipping comes with low risk. As we mentioned above, there is no need to invest in inventory until you make a sale, then there is no risk of holding unsold products.


While wholesale offers higher profit with greater risk, if you have poor knowledge about the clothing market and make false forecasts, you may experience trouble with unsold products. However, this risk can be relieved by effective planning and research.


3. Control Over Inventory


Dropshipping enables you to get rid of inventory, which means you have minimal control over stocking at the same time. You completely rely on your suppliers to maintain stock levels and fulfill orders, this can lead to issues if the clothing is out of stock on your suppliers, potentially affecting your customers’ service.  To solve this, you may cooperate with more wholesale clothing vendors and avoid stock issues.


Wholesale gives you complete control over stock levels and product quality, which leads a more consistent customer service. However, there will be extra costs for inventory management.


4. Profit Margins


With the competitive nature of the women’s clothing market and higher clothing costs compared with wholesale, dropshipping usually brings lower profit margins, to make a substantial income for running your shop, you need to focus on how to sell a high volume of products.


Wholesale suppliers often provide extra discounts for wholesale orders, which enables you to compete on your own retail prices with quality and make an opportunity for higher profit margins. 


5. Branding Opportunities


With dropshipping, you may have limited to customize your own brands, on one hand, many products are sold by multiple retailers, which is challenging to differentiate your brand, on the other hand, customization service usually requires minimum quantities. However, you can still create clothing labeled with your boutiques through effective marketing and customer service.


It is more flexible for wholesale to customize clothing aligned with your boutique, in general, wholesale clothing suppliers provide wholesale blank apparel to design the patterns, and labels, which provide opportunities for those who are looking to establish a recognizable brand.


6. Time and Effort


It is easy and quick to set up a dropshipping business, you can launch the online store, select products and partner with suppliers in a short amount of time, and you can get the conclusion about which products is bestselling with offering a wide range of products.  And there is less effort in opening a boutique and shipping process.


Wholesale requires more time and effort than the whole process of online shopping should be concerned, such as sourcing reliable clothing suppliers, managing inventory, and fulfilling orders. On the other hand, you have complete control over your business.


Conclusion


In the end, whether you should choose dropshipping or wholesale for your e-commerce business depends on your specific circumstances and goals. Here's a quick summary to help you make an informed decision:


                                       Dropship VS Wholesale


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