It is a process to describing the path for a product takes to go from this approach through manufacturing and at the end, finally into the hands of a customer. If we were talking with hard-core supplier, they’d insist a product’s supply chain reaches all the way to the mining of the materials used to manufacture an item. But that’s a little intense.
For the purposes of this guide, we don’t need to get quite that detailed. You simply need to understand the three most applicable players that make up the dropshipping supply chain: manufacturers, wholesalers and retailers.
So Here We Go:
Manufacturers – Manufacturers is the creator of the product and but mostly not sell directly to the public. Instead, he sells out to their product in bulk to the wholesalers and retailers.
To purchase the product directly from the manufacturer is the cheapest as well as with good margin to the retailers but most have minimum purchase requirements you’ll need to meet. You’ll also need to stock and then re-ship the products when selling them to customers. For these reasons, it’s often easier to buy directly from a wholesaler.
Wholesalers – Wholesalers is a term, which works as mediator in Manufacturers and retailer, to buy products in bulk from its origin place, mark them up slightly and then sell them to retailers to resale the product to the public. If they do have purchasing minimums, they’re generally much lower than those required by a manufacturer.
Wholesalers will usually stock products from dozens – if not hundreds – of manufacturers and tend to operate in a specific industry or niche. Most are strictly wholesaler operators, meaning they sell only to retailers and not directly to the general public.
Retailers – A retailer is anyone who sells products directly to the public at a markup. If you run a business that fulfills your orders via dropshipping suppliers, you’re a retailer.