What is a Wholesaler? and What is a Dropshipper?

This question has been asked thousands of times

People have been distributing products since the beginning of time, for barter and or for coin.

Here is how Wholesalers work

Let us say XYZ Manufacturer makes a product called Widgets. We.ll say that Widgets has been around for years. It is a very well known brand name product. It will without a doubt give you the shiniest widgets on your block, and everybody wants some.

XYZ Manufacturers makes Widgets, but they do not sell it directly to the public. They.re a manufacturing operation. They.re far too busy making widgets to go around building stores all over the place. They need wholesale distributors; companies who will take their product and distribute it to the places that will sell it.

For years, XYZ Manufacturers has sold Widgets to a company called SWP Distributors. The founder of SWP Distributors knew back in the old days when Widgets were made by hand, out in the chicken house.

Today, SWP Distributors buys Widgets by the truckload. They pay $5.00 a case for it, which is a very good price. It is such a good price, it has It is own name: the Manufacturers' Wholesale Price.

However, SWP Distributors does not sell it to the general public either. They are a distributor. They distribute Widgets.

SWP Distributor Wholesale works with a chain of retail stores called Widgets R Us. This place was founded by a retail business visionary that saw the incredible potential of Widgets a long time ago. Today there are Widgets R Us retail stores on every street corner in every major city in the country. Widgets R Us buys truckloads of Widgets from SWP Distributors for $10.00 a case.

So, SWP Distributors makes $5.00 on every case of Widgets they sell to Widgets R Us retail stores. This makes SWP Distributors very happy.

Cases and cases of Widgets arrive in the stockrooms of Widgets R Us stores everywhere. The Widgets R Us employees open those cases, and pull 12 cans of Widgets out of each case. With their pricing guns, they stick a price of $4.50 on each and every can.

Widgets R Us stores make a total of $44.00 on each case of Widgets. (12 cans x 4.50 per can = 54.00, minus the 10.00 they paid for the case = 44.00).

Widgets R Us is even happier than SWP Distributors.

However, the happiest people of all are the people who can stroll into Widgets R Us and purchase a can of Widgets for only $4.50. They think this is a great price, and they.re walking around with the shiniest widgets in town.

Remember: The manufacturer sells to the distributor wholesale, the distributor wholesaler sells to the retailer, and the retailer sells to the end user (the customer). The manufacturer, the distributor and the retailer all make money because the customer is willing to spend money for the product.

Drop Shipping has been around for a long time, too. Probably as long as mail order catalogs; maybe longer. If you want to use a buzzword to impress a corporate type, call it .second party addressing.

Above, we talked about the manufacturer-distributor-retailer relationship. When you use drop shipping to sell products on the Internet, (or anywhere else), YOU become the RETAILER in that relationship.

It should be noted here, if only to keep the Punctuation Police happy, that if you use the method of drop shipping in your business, YOU are not the drop shipper. The company(s) who supplies the products to your customers for you is the drop shipper. YOU become a .Stockless Retailer.

Here is how dropshipper works.

1.) You open an Internet Store, with a shopping cart and the ability to accept credit cards.

2.) You find a distributor who is willing to dropship the products you want to sell. The best place on the Internet for this is SWPCorp.com. This is our website, and our Drop Ship Source System are recognized as the best sources for legitimate Wholesale Suppliers and Website Designers on the Internet.

3.) You establish an account as a retailer with the Wholesale Drop ship Supplier you choose. We have many to choose from or you can use your own Dropshipper and add those products to your website.

4.) You receive images and descriptions of the products you want to sell from SWPCorp and from the Wholesale Dropshipper and post them on your Internet Store. We will put all the products in your store for you from our Dropshippers that we provide and we maintain the inventory for you.

5.) A customer surfs into your Internet Store, and falls in love with a product that you have priced at, say, $80. They purchase the item with their credit card, PayPal, Check or Money Order. Your Store charges them $80 plus your shipping fee.

6.) You turn around and give the order to your Wholesale Dropshipper Supplier, along with the customers name and address.

7.) The Wholesale Supplier sends the product directly to your customer, with YOUR Stores name on the package.

8.) The Wholesale Dropshipper Supplier charges you the wholesale price of, say, $45.00, plus shipping.

9.) Your customer gets a cool product from your store shipped to their door, and they tell all their friends about you, and you make even more money.

There you have it. You just made a $35.00 profit on one item. You did not have to buy a whole bunch of the product and keep it in your warehouse, hoping you would sell it. You did not have to pay to have it shipped to you, and then pay to ship it to your customer. All you did was give the order to your Wholesale Drop Ship Supplier.