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The different roles in a drop shipping business

Submitted by nhogugu on Wed, 08/15/2018 - 08:38

Most people who joined drop shipping business has the confusion about what does a drop shipping order mean and what is a drop ship order. If you have the same question, I’d tell you that you come the right place and I’ll introduce the whole process for you in this article.
Simply speaking, a supply chain is a technical term that describes the path that products need to go from the manufacturer into the hands of customers, which usually includes wholesaler and retailer in the process of drop shipping business module. But who are they and what is their function in drop shipping business. Are the dropship manufacturers, wholesalers, and retailers the same? We’ll share you the detailed information.
The different roles in a drop shipping business
1. Manufacturer
In our traditional view, manufacturers major in creating products but do not sell their products to the public directly. They sell goods in a large amount to wholesalers or retailers more often. Although it’s known to all of us that buying directly from the manufacturers is the cheapest way to getting products for sale, but most of us usually have a too small amount of demand to meet their minimum shipment requirement. And even if we bought a large amount of cheaper goods for sale to make money, we need to rent and manage a warehouse to stock and then wait for customers’ orders day by day. For all we mentioned above, it’s easier for us to buy goods from a wholesaler even with a higher price.
2. Wholesaler
Wholesalers are those people who can afford the money to buy goods in bulk from manufacturers and hold the stock. Wholesalers will often stock products from many different manufacturers (but in a similar industry) and tend to operate in a specific niche. They appropriately raise goods price and then sell them to retailers or customers in a smaller amount. Their purchasing minimums are much lower than the manufacturers’. Of course, some of them are strictly wholesalers, which means they only sell to retailers but not to the general public directly.
3. Retailer
Retailers are the kind of businessmen that we are familiar with most. Because they can be anyone that sells goods directly to the public at a market. If you have a store, online or offline, that fulfills your drop shipping orders through supplier, you can be named a retailer, too.
The fulfillment of drop shipping order
Now, we have understood the function of roles in the process of drop shipping, let’s learn how a drop shipping order gets processed in this business model. It’s assumed that you have an online clothing drop shipping store on Chinabrands.
Related: how to start a dropshipping business

Step 1: You list your clothing products on your online store or your website.
Step 2: A customer wants to buy a dress listed on your store, so she placed an order.
Step 3: The new order is automatically caught by the store software in Chinabrands’ system, so you get an email confirmation of this order with your customer.
Step 4: After the customer completed the $200 payment to your bank account, you placed this order with your supplier, a large clothing manufacturer who are settling in Chinabrands. (This process is usually as easy as your customer placing the clothing order to you.)
Step 5: If this dress is in stock, then your supplier will box up the order and send this dress directly to your customer. (In this process, your supplier will charge you at a wholesale price, $150.)
Although the shipment is from your supplier, your name and address will show on the return address label and the invoice and the packing slip. When this shipment has been finished, your supplier will email an invoice and a tracking number to you.
When you received the tracking number, you could send it to your customer via an email. Then your customer has informed the tracking information and can check the logistics information of her dress. With your customer received the dress she wanted, the whole dropship process is completed. And you earn the price difference between your customer and your supplier, that’s $50!
You may have the thought that this order turnaround twice, it must be slow to deliver goods for manufacturers. Actually, it’s not all right. Often, the shipping time on dropshipped orders is much faster than you'd think. Most reliable and quality suppliers will be able to get an order out the door in a few hours, allowing retailers to advertise same-day shipping. For example,, whose delivery rate within 24 hours is high to 95%.
Also Read: wholesale jewelry china