Should I buy inventory or use a drop ship supplier when first starting out?

Question: Should I buy inventory or use a drop ship supplier when first starting out?

Answer: When first starting out it is better to use a drop shipper or manufacturer who packages and ships the products for you. There are literally thousands of distributors who are eager for the opportunity to sell more of their products. Drop ship relationships have many advantages over stocking your own inventory. Stocking inventory and making it ready to ship is expensive. It requires upfront investments, a place to store shipments, inventory tracking, shipping labels and could even require extra employees that were not planned for in your eBusiness plan. Having a drop ship supplier take all these burdens and out-of-pocket costs out of your hands can save you time and money when first starting out. In addition, most good drop shippers will use your shipping labels or send the packages with no branding of their own so your customers will not know the difference.

The disadvantages of using a drop shipper are few, but there are some. With a drop ship supplier you can expect a lower profit margin and there may even be a small fee for each shipment. The other disadvantage is you are not running the customer service aspects all yourself and most small drop shippers do not have great customer service to provide. As you can imagine, stocking inventory would give you control over both of these disadvantages and may even provide a higher profit margin. Weigh out your options, look at the pros and cons of each and figure out which way works best for your eBusiness.