Reselling VS Dropshipping - What's Different

anwebservices Level X⁵

October 16, 2018, 2:18 pm

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Reselling VS Dropshipping - What's Different

Reselling and dropshipping are two very similar types of business, but you may need to understand their differences so read following:

How reselling works?

You find a product which can be sold at a higher price, but as reseller you need to buy it first then sell it, to make a profit. So investment is required. Plus you have to be sure that your customers will be satisfied with that product. If your buyers for any reason want to return the product and get a refund, then you can be in loss if you can't return the same product to your supplier and get your own money back. In this case, you may lose money on transactions or even on shipping costs if it's a physical product. So you must be experienced and sure which products or services you buy for resseling and keep in mind this risks.

Is reselling legal?
If you have an agreement buy your supplier to resell their products or services, then it's absolutely legal, do not worry. Btw, any business would like to sell more, even if you adding your own profit on top of it, they still selling to you at their own price, or even discounted.

How dropshipping works?

Very simmilar to reselling. But for dropshipping you may need special agreement by product supplier. So dropshipping is when you find a customer for a product and sell it at your own price as you wish, then when it's sold, you passing details to your product's supplier and supplier send the product directly to your customer. So you are here just middleman. Almost no investment is required, because you will receive money from your buyer, keep your profit then buy the product for rest of the money you already received, plus you not need to provide or ship it your self, it's done by your supplier. How good is that? Well... Awesome In most cases, it's easier to work then reselling and it's much less investments and risk involved.

Hope this comparison helped you to understand this two types of business and it's differences.

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amelia88

amelia88

This is a really helpful summary. I'd heard of dropshipping as a bit of a buzz word recently, as a way of making money - but to be honest I didn't really know what it was until reading this thread. Thanks for clarifying!

6 years ago

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Youngshark

Youngshark

It has also been a bother for me and it is great that I have gotten the clarification I needed. The Dropshipping though seems like it is meant to make one a broker which is not that bad if you have an expertise in a specific field.

6 years ago

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Corzhens

Corzhens

If you are into Facebook then I’m sure you have friends there that are into drop shipping. I have more than 10 friends in Facebook who are posting regularly of the products that they are selling and it looks like they are earning good money because it’s already more than 3 years that they are doing that. Drop shipping is just being a broker for a store that the store will handle the delivery.

6 years ago

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stbrians

stbrians

Very vital elaboration here. It will make us understand reselling and drop shipping. Actually the best pointer here is that both business deals are legal. Another fact is that in all you get profit. That is what we all seek, to gain from our efforts

6 years ago

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NerdIndeed

NerdIndeed

Thank you for the wonderful insights. It does help shed light on differences between the two. So to summarize, it's best to do drop shipping as you will not need capital upfront. One quick question, with this business model in mind, will you as an entrepreneur be open to accepting returns?

6 years ago

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superlicca

superlicca

Great information for selling items online. I used to work as a Virtual Assistant for a dropshipping business. And I think those who have dropshipping business can earn a lot. I can say that it requires a lot of tasks since before selling a product, there are criteria that you need to meet to choose a product to sell. There are research and listing tools that you will use which are very helpful too. If your dropshipping business is growing then you may want to hire Virtual Assistants who can do the listing and researching.

6 years ago

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theresajane

theresajane

This made me realize that it's better to do dropshipping than reselling. Actually, in my observation, dropshipping is more common in America. In our country, on the other hand, reselling is the trend. This thread made me think that I should enter the world of dropshipping, less effort, less headache, less hassle.

6 years ago

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NerdIndeed

NerdIndeed

You're right. Drop shipping or merely being the "middleman" does make more sense as you don't need to have a physical inventory of your products stored in your location anymore. And it costs less to run as there is no need to buy the products initially and be resold.

6 years ago

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jaymish2

jaymish2

I think that both terms are very clear. I don't think that they are confusing at all. Any adverts or person that promotes drop shipping always specifies what it is and specifies that you don't have to handle the goods. All you have to do is get the client/customer direct them to the goods and let the supplier handle the rest. I think reselling requires handling of the goods. These terms are not confusing. A simple search on Google will clarify the difference.

6 years ago

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overcast

overcast

I think in reselling you are allowed to do the white lable. As in you can rebrand the product. You can't do that with dropshipping. You just give people what you have. And that seems to be the way for the dropshipping to work around. Not all the time it works though. Some of the time you have to work with the products properly. And make sure to sell them through the PPC.

6 years ago

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Barida

Barida

All depends on the agreement that you have reached with the seller. If it is a buyer that doesn't give you the opportunity to do so, you can't do it without the permission. So, ensuring that you get that consent from them is something that is important.

6 years ago

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overcast

overcast

I think aliexpress has the option to ask the seller for the white label. The way it works is that you can add your own logo on the product. And then sell it to the public when they do the dropshipping. The quality remains good if you can handle things. I personally have learned that it can be a bit tempting to not try white label. People make serious money through that.

6 years ago

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Kakashi2020

Kakashi2020

Reselling is safer for everyone because you have total control on the quality of the product and also it's shipping. I've done both in the past and doing Dropshipping gave me a lot of problems. A lot of Dropshipping companies are not trustworthy. You'll send them the order and they would deliver a different item. There are also instances in which items are missing. I would then be blamed by the customer while the Dropshipping company earns a lot.

6 years ago

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Barida

Barida

I have always wondered the difference between drop shipping and reselling and I believe that this thread settles everything! For me, the reselling aspects look a bit of a risk than what we have with drop shipping. For the later, you are just a middleman and your work is not to invest, but to facilitate selling of products.

6 years ago

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theresajane

theresajane

I agree with you. Though I have a limited knowledge about these two. This thread really helped me better understand their concepts.

6 years ago

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cmoneyspinner

cmoneyspinner

I prefer drop-shipping, although I've never been successful at the endeavor. When my husband and I decided to try to earn income working online, he found this site that said all we had to do was advertise the products and direct people to the site where the products would be purchased. We didn't have to maintain inventory. We didn't have to buy anything. We didn't have to worry about shipping the product. We set the price. All we had to do was send customers to the site. It sounded easy enough. We tried. All I can say is it's not as easy as it sounds. However, I would still recommend drop-shipping as opposed to reselling.

6 years ago

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jayjaydimson

jayjaydimson

Reselling is when you buy bulk orders to the producer and you will be the one who will sell it. And about the dropshipping, I don't have an idea about that.

6 years ago

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vhinz

vhinz

In dropshipping you just have to set up an online store, find suppliers, grab their products and post it on your online store. When the customer placed on order on your online store, you just have to take their information, purchases, and payments, and then fill it to your suppliers purchase form. There's a plugin that does automatically this for you in just a click of a button. When your supplier receives the order, they will prepare the item and ship it directly to your customer. You don't have to have stocks of the products you are selling and the shipping and handling will be done by your supplier. So managing the inventory is not your problem. The biggest thing you need to do is to market your online store to reach as many as possible customers. You can do dropshipping any part of the world but of course there's country that the delivery time takes longer because of the available courier. Like for example, we are in the Philppines, some said that if the supplier is from China, it takes longer to deliver to the Philippines than to US or Europe. That's why dropshippers from the Asian countries their target customers are from US/Europe.

6 years ago

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thejoyrevolutio

thejoyrevolutio

Wow this really helps. I am not really how dropshipping works until now. I think I would prefer dropshipping now that I know how it works. If the the priduct is faulty you will not be held responsible because you are just a middleman. Also you would bot have to invest because unlike in reselling you have to buy the product first before you sell it again.

6 years ago

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vhinz

vhinz

I think in dropshipping, you are still responsible for the faulty products because the customer will order from your online store. You are not actually going to tell to the customers that you are doing dropshipping and you are just the middleman. What the customer see when they arrived at your online store is that you are an online seller. Any issue that will arise in regard with the product that they've purchased from your online store will be taken care of by you and not by your supplier. That's why you have to know the return policy of your supplier so that when a customer returns their purchased product you know what to do to avoid losing money. What's great about dropshipping is that you don't need big capital to start your online business and you don't have to worry the inventory and shipping of the products.

6 years ago

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superlicca

superlicca

I think dropshipping is great since you don't need to invest in the products. You just need to find a good supplier who will take care of the shipment. Although there is a lot of dropshipping business out there the task is easier and all you need to do is sell the products and contact the supplier to have it shipped to the customer.

6 years ago

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conniemac

conniemac

Thank you for giving an insight to dropshipping. And that's true reselling needs careful monitoring of products, requires investment. Packaging and shipping is also done by the resellers. From what i've read, i can say dropshipping entails less work and more income, and no investment at all. How great is that?! I hope to learn more about dropshipping.

6 years ago

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vhinz

vhinz

There's still investment in dropshipping, it's not just too big to start with. What you are going to do is buy your own domain for your online store, set up and configure your online store, find reliable dropshipping suppliers, and grab their products info and place it on your store with your preferred selling price. In order your online store to reach many potential customers, you also need to invest in promoting it. SEO and paid ads will help your online store reach lots of customers.

6 years ago

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Corzhens

Corzhens

As you had explained, reselling is like flipping that you have to buy the product in order to re-sell it for a profit. We call that scheme “buy-and-sell” which is usually the work of the unemployed. They will buy used items like small appliances and sell it for profit. Drop shipping is better because it has no investment of speak of. All you need is to connect to a willing supplier and there you go with your business of selling. Maybe that lack of investment is what makes drop shipping a hit with the millennials.

6 years ago

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allyn2017

allyn2017

I agree with you, it is called buy and sell in Philippines, but it is not a work for unemployed but work for business minded.

6 years ago

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jayjaydimson

jayjaydimson

Reselling is where you buy bulk orders to the supplier and sell it to the customer one by one, and this technique is good especially when you buy bulk orders on a rural area and sell it to an urban area.

6 years ago

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allyn2017

allyn2017

I lack at knowledge in this department so I was looking for an article that would help me with the basic of buy and sell, thanks for this one. This is very helpful.

6 years ago

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theresajane

theresajane

This forum has helped a lot of people. Glad that you have found this thread and helped you as it also helped me too.

6 years ago

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Mediagrowth90

Mediagrowth90

Drop shipping business mostly depends on website traffic, If you fail to drive traffic for a product to your website, you will be loss, So you must think about traffic source which is paid or free.

6 years ago

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Tehilah27

Tehilah27

Dropshipping is a low cost easy to setup business. The logistics, shipping and everything else is handled for you. All you have to do is setup your store and advertise. This is not to say it is without risks.
If you do not have the right supplier you could run into a lot of problems. Also, shipping sometimes lasts for weeks which could result in cancelled orders. All in all, dropshipping is profitable but there are pitfalls that need to be properly researched and avoided.

6 years ago

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totolh

totolh

Very helpful, thank you. Love this article. Very clear to me now....

3 years ago

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