Wholesaler

Definition

A wholesaler is a business that buys products in large quantities from manufacturers and sells them to retailers or other businesses at lower bulk prices.

Explanation

In the dropshipping ecosystem, wholesalers often act as suppliers that provide products to online stores. Instead of selling directly to end consumers, wholesalers focus on supplying inventory to merchants, resellers, or dropshipping businesses.

Some wholesalers also offer dropshipping services, meaning they store inventory and ship products directly to customers on behalf of the store owner.

Key roles of wholesalers in dropshipping include:

• Sourcing products from manufacturers
• Offering bulk or wholesale pricing
• Maintaining product inventory
• Handling order fulfillment and shipping for retailers

Working with wholesalers allows dropshipping merchants to access a wide range of products without managing manufacturing or large-scale logistics.

Example

A wholesaler specializes in home organization products:

• The wholesaler purchases storage boxes in bulk from a manufacturer.
• A dropshipping store lists the storage boxes on its website.
• When a customer places an order, the store sends the order to the wholesaler.
• The wholesaler packs and ships the product directly to the customer.

The store earns the difference between the retail price and the wholesale cost.

Key Takeaway

In dropshipping, wholesalers supply products to online stores and may also handle inventory and shipping, allowing merchants to sell products without stocking them.