Most people think there are just two prices for an item – wholesale and retail.
Not true.
First, there’s the price a manufacturer charges wholesalers who buy massive volumes of product.
Then, there’s the amount wholesalers will charge for selling sizeable volumes of the same item to a retailer. This will be quite a bit less than he’s going to charge for one-off sales to you as part of a drop shipping operation. But because he’s going to be doing a lot of those one-off sales, he can still sell them at a discount. Which is how you make your profit.
In between, some wholesalers will sell small or ‘light’ bulk lots. For low-priced items you can often buy in bulk and still make change out of $500.
Then there are liquidation wholesalers, who dispose of manufacturers’ stock, often big brand names, at rock bottom prices, and importers who are moving new lines that have just arrived on our shores.
You can find all of these levels explained at Worldwide Brands, the leading source for contacts with drop shippers and wholesalers.
Where you plug in to the price point depends on the degree of risk you are going to take as a seller, in terms of the volume you’re prepared to buy. Generally speaking, the more you buy, the less you pay per item.
Although wholesale prices through drop shipping may be higher than if you bought in bulk, the key advantage is that you are taking little or no risk with this route. Your only outlay may be a listing fee for an online auction. If the item doesn’t sell you’ve learned an interesting lesson, but at least it wasn’t an expensive one!
