As online shopping trends continue to develop, more and more business opportunities can be exploited, for example, dropshipping and reselling. They are two very similar types of business, but many people don’t know the differences between dropshipping and reselling. In this article, I will show you 5 differences between dropshipping and reselling.

 

1. Different ways of work

The first difference between dropshipping and reselling is of course how it works. For dropshipping, if there is an order, the dropshipper can purchase the order from the supplier, then the supplier will ship the package to the customer directly, no need to have stock to warehouse. The most significant thing for dropshipping is marketing and getting more sales.
Unlike the resellers, they need to purchase from the supplier firstly, then they will pack the orders and ship to the customers themselves. For resellers, they need to do the marketing work, also need to purchase from the supplier and manage the stock.

 

2. Capital

Judging from the way they work above, of course, the capital needed is also different. A dropshipper doesn’t need to prepare much capital, what they need to pay is opening an online store and marketing activities. Even with the dropshipping system, they can receive payment and take advantage in advance. 
For resellers, they not only need a lot of capital to stock products and the warehouse cost, but also the fees for packaging, shipping and marketing activities. 

 

3. Profits obtained

Talking about the profits, of course, many factors influence. If we depart with the assumption that both of them conduct transactions in the same amount, then the reseller is more profitable.
Resellers usually buy stock in an amount, so the purchase price obtained will also be cheaper than the purchase price of the unit. Whereas the dropshippers only purchase products after they have orders from customers. In other words, the purchase price obtained from the supplier is the unit purchase price. If both of them sell at the same price, obviously the resellers are more profitable. 

 

4. Assured Risk

Every business model has risks, including dropshipping and reselling. The risk of dropshippers is far smaller than that of resellers. The most common risk of dropshippers is that no customer purchases items from their store, you may spend much on advertising or marketing activities, but do not get any results.
Resellers meet more risks, because in addition to marketing costs, they also spend much on buying products to stock. If the products are not sold, the loss will be greater than dropshippers.

 

5. Service to customers

The last difference between dropshipping and reselling is the service provided to customers. After receiving an order, the reseller needs to pack and deliver the package themselves. And dropshippers only purchase orders from the supplier and supplier will ship package to the customer's address directly.