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Wholesale Electronics – Drop shipping of Wholesale Electronics Explained

Updated on November 23, 2009

A manufacturer manufactures electronic products which are ultimately procured and used by the end customer. But to formulating a product and manufacturing it is the focus of the manufacturer. The manufacturer researches the need for a product, designs it and manufactures it. The manufacturer restrains their operations to only this functionality, manufacturing.

While setting up an online electronics store for wholesale electronics, procuring the products for your store from a manufacturer is not a possibility. But selling online requires of souring products in a cheap way. Selling below the retail price is achieved only by cutting on certain overhead costs, which are a major savings for online stores. Selling cheap is the only option to remain competitive.

As previously mentioned manufacturers sell their products to distributors. Distributors buy the products from the manufacturer in bulks. Distributors need to make huge investments on this buying. But, since they procure it from the manufacturer in bulk the product price would be far low than the retail price.

Wholesale electronic suppliers pick up the product from the distributor. The wholesale supplier too picks in large numbers but not in the bulks as the distributor picks from the manufacturer. The wholesale supplier too benefits from this wholesale purchase of the product though the distributor has sold the product after including profits. The wholesale supplier in turn sells the product to the retailer after adding his profits to it. The end-user buys the product from the retailer. The retailer too adds his profits to the product pricing, which also includes the overhead costs he incurs like store rental etc.

By the setting up of online stores, saving are made on the overheads the retailer incurs like store rental etc. In the usual case the products are transported to the retailer by the wholesale supplier. As the transport cost too goes into the product the product price keeps ballooning.

Drop shipping is a process where the online wholesale store reduces the shipping costs by getting their wholesale supplier to deliver the product to the store’s customer directly. In the usual retail scenario the wholesale supplier delivers it to the retail store and then the retail store delivers it to their customer after a sale.

The online store could function as a zero inventory store. The store acts as a display front to attract buyers. They use clever marketing skills to bring in a flow of customers. Well written product descriptions help the customers to take a proper decision and the sale is made. The online store accepts payment from the customer through credit cards or their accepted forms of payment. The order is passed to the store’s wholesale supplier and the wholesale supplier drop ships the products to the store’s customer with the store’s name on the package.

Though the store collects shipping charges there is a considerable amount saved in comparison to a purchase from a physical retail store.


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