Dropship Program

Written by Kathleen Gagne
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Find a Dropship Program Online

Hundreds of online vendors are working with dropship wholesalers to keep their business growing. Dropship wholesalers often offer dropship programs that allow the vendors to eliminate any need for a product inventory. By taking advantage of a wholesaler's dropship options, many vendors are actually able to sell their products online at the retail prices they establish before they even purchase the products from the wholesaler.

This can be a distinct advantage to the vendor whose cash is not tied up in inventory costs which include warehousing and insurance as well as the money spent for the products. The wholesaler carries all of the risk as well. For example, if the vendor decides that a new, improved widget will sell and buys a thousand of them a week before a rival manufacturer presents an even better widget, the vendor will be stuck with the inventory. Using a dropshipper means that the dropshipper would have purchased the inventory and would be responsible for any financial loss if the widgets don't sell.

Dropship Programs 101

A good dropshipper wants to work with vendors who will advertise and sell his products. Working with online vendors, the wholesaler's products have a better chance of selling than they would if they were just stacked in his warehouse. In fact, some wholesalers offer discounts on widgets they weren't able to sell and sometimes recoup a portion of their investments.

As a vendor, you should look for a wholesaler who will represent you well to your customers. It's a good idea to ask them about how their business stands behind the products and services they provide. Make sure your name is on the shipments and your bill of lading is in the box; your customers should never know that the products were shipped from somewhere else. Determine in advance how and when the wholesaler expects to get paid. Get a price list and find out how long the prices will be in effect. Ask to see their last three price increases.

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