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Blog / Beginner's handbook / Beyond the Buzz: Dropshipping vs. Reselling Unpacked

Beginner's handbook

Beyond the Buzz: Dropshipping vs. Reselling Unpacked

Beyond the Buzz: Dropshipping vs. Reselling Unpacked
Sarah Reilly

By Sarah Reilly

10 min read

In an evolving ecommerce landscape, entrepreneurs are constantly looking for trending products to boost their revenue. For example, custom t-shirts and custom hoodies have emerged as some of the latest best-selling print-on-demand products. But how does one capitalize on these in-demand items? Plain and simple: dropshipping.

This model allows sellers to offer a diverse range of products without the need for inventory, making it an enticing option for those interested in selling on-trend products or even dropshipping products with high profit margins.

But this approach isn’t the only way to cash in on the print-on-demand wave. Many have also turned to reselling, seeing potential in buying products at a lower cost and selling them for a premium.

With both models offering particular advantages, especially for those eyeing custom apparel, it’s essential to understand the nuances of dropshipping vs. reselling if you want to get into the online selling game. 

Which one might be your ticket to ecommerce store success? Let’s dissect both approaches.

Dropshipping decoded

At its core, dropshipping is a retail model where sellers don’t hold inventory. Instead, when a customer places an order, the seller purchases the product from a third-party supplier and has it shipped directly to the customer.

Dropshipping is great for. . .

  • Low start-up costs: this is major as there’s no need to invest heavily in inventory.

  • Flexibility: you can easily test and add trending products, like those best-selling custom t-shirts or must-have custom hoodies.

  • Scalability: with the right supplier, expanding is a breeze. Partnering with a provider that offers a global network of facilities is key.

On the flip side, dropshipping means. . .

  • Less control: you don’t oversee product quality or shipping times, which can be tricky.

  • Lower profit margins: third-party suppliers take a cut, which will impact your profits. 

  • More competition: the low barrier to entry means the market can get crowded. 

While the dropshipping business model offers an enticing way to jump into ecommerce, especially with popular print-on-demand items, it’s not without its hurdles. Balancing its pros and cons is crucial to leveraging its potential.

Read also: Dropshipping vs. Ecommerce: A Beginner’s Guide to Selling Online

The rundown on reselling

Reselling is the art of buying products in bulk, storing them at your home or a storage facility, and then selling them to customers, item by item. 

Some great things about reselling are. . .

  • Higher profit margins: you control the pricing, which maximizes your profit per sale 

  • Quality assurance: you’re directly handling and inspecting each product before it’s sent to customers

  • Brand control: you manage the packaging, promotions, and product presentation 

The downside includes. . .

  • Upfront costs: you’ll need initial capital for bulk purchasing

  • Storage stress: warehousing can be costly and challenging

  • Excess stock: unsold items can become an expensive problem very quickly

Although the hands-on nature of reselling offers a greater grasp over product quality and brand identity than other business models, it also comes with its set of issues. Understanding its limitations and liabilities can pave the way for a more informed decision in the ecommerce arena.

Comparing dropshipping vs. reselling

In the realm of ecommerce, 2 approaches are at the forefront: dropshipping and reselling. Both have their merits and drawbacks, but what sets them apart? Below, we unpack the key differences to help you choose what’s best for your ecommerce business.

To invest upfront or not?

Part of dropshipping’s appeal lies in its modest initial costs. You’re mainly investing in low-cost operational tools, like an ecommerce platform or marketplace, rather than tangible goods. This means more budget flexibility, which is especially beneficial for newcomers. 

Conversely, reselling demands purchasing products in bulk upfront. This requires a heftier capital injection at first, so not everyone can easily get started in reselling. Plus, that capital is tied up in the product long-term, which means your reseller business has low profit margins and less cash flow for other things like marketing. The decision boils down to considering your budget constraints.

The question of risk aversion

With dropshipping, your financial exposure is minimal. For example, if you’re working with an on-demand supplier like Printful, there’s no need to buy products upfront, so the risk of being stuck with unsold stock is eliminated. It also allows for flexibility and adaptability regarding your product selection, sizing, colors, etc., and is especially reassuring for those cautious about overcommitting resources. 

Reselling, however, involves a more pronounced risk factor. Since products are bought upfront and in bulk, there’s the ever-present worry of what if they don’t sell? Unsold inventory can quickly translate to financial losses and cash-flow issues. For risk-averse folks, this low-risk business model requires careful market research and strategic planning to mitigate potential losses.

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Solving the storage dilemma

The dropshipping model exudes simplicity in terms of inventory management. Suppliers shoulder the burden of storage (and shipping products to customers), alleviating major operational concerns for your business. It’s as simple as that.

With reselling, effective inventory management becomes paramount. This could involve personal warehousing or aligning with a third-party warehouse space logistics company to store your product. Although the latter spares you the need for personal storage, it can be costly and it’s another fixed expense to consider. Plus, you’d have to work out how to ship products to customers if you store inventory elsewhere.

Quality control concerns

Dropshipping relinquishes your control over product quality checks since items ship directly from the supplier. As a result, it’s important to choose the right supplier so you’re confident that the products being shipped out under your brand offer consistent quality. 

For example, all Printful orders go through our 3-step quality check, ensuring everything is up to par. (And our 0.24% reshipment rate means it’s working.)

On the other hand, reselling through wholesale suppliers provides a more participatory approach since every item is personally vetted before shipment. This guarantees higher quality assurance: relying on a hands-on fulfillment method that’ll enhance your brand’s reputation through consistent positive customer experiences.

Supplier dynamics

Navigating supplier relationships in dropshipping tends to be more straightforward, often with fewer hurdles and complexities. If you choose a full-service provider like Printful, you’ll work with one company that handles everything from production and fulfillment to shipping—start to finish. 

a screen shot of a clothing rack

Source: Printful

Alternatively, reselling tends to involve direct interactions with brands and other retailers. This means you may have to show an established business history or meet certain criteria to be able to resell particular products. The upside? Direct dealings with brands and resellers often yield better pricing and exclusive deals. 

The competitive landscape

In the dropshipping arena, there’s potential for carving out a unique brand niche, especially if you’re interested in customizing generic products. But if you simply want to dropship popular low-cost products, there’s already a good amount of market saturation, making differentiation challenging.

Learn more: How to Grow Your Brand with Product Personalization

Reselling presents its challenges. Dealing with name-brand products, for example, often means vying for customer attention in a sea of similar sellers. This includes competing against product manufacturers who, wielding production control, can often undercut you on pricing. 

Similar to dropshipping companies, the key would be to find a way to focus on customization, making the products you’re reselling stand out from others on the market.

Automation and tools 

Dropshipping stands out for its rich ecosystem of automation tools. There are cloud-based dropshipping platforms available that are designed to help businesses manage orders, monitor stock levels, and stay on top of product prices. And if you go with a full-service provider like Printful, you can do all that and create custom product designs. 

Reselling, while not as tech-tool enriched, grants other operational advantages. For instance, the hands-on nature of inventory management can offer in-depth insights into customer preferences—you have more of a bead on what people are into and what they aren’t.

Combining dropshipping and reselling: a viable strategy?

Many entrepreneurs wonder if they can blend the best of both worlds by combining dropshipping and reselling. The short answer? Absolutely. And many sellers already do. 

Why it works

Dropshipping allows merchants to list products without holding any inventory. As we’ve covered, this virtually eliminates upfront costs and reduces potential risks associated with unsold stock. However, reselling can offer greater control over product quality and potentially higher profit margins if you source bulk items at a significant discount. By integrating these strategies, you can take advantage of both. 

Try it out

One way to do it: test the waters with dropshipping to identify trending or popular products without any significant upfront investment. Once a product proves to be a consistent bestseller, you can buy it in bulk for reselling, leveraging the cost benefits of dropshipping supplier bulk buying.

In fact, you can save up to 55% on bulk orders with Printful. Once you know what’s selling well, you can order 25+ items for less money per unit. 

a stack of clothes on a conveyor belt

Source: Printful

Be aware that blending these business models requires careful management. You have to stay on top of what products and designs are thriving to make sure you’re not left with excess stock. While combining dropshipping and reselling can be a smart business move, it requires a well-organized and informed approach.

Making a decision

Each model, be it dropshipping or reselling, offers unique benefits and challenges. Understanding these differences empowers entrepreneurs to go with the strategy that aligns best with their vision and resources. Your choice should reflect your goals, financial position, risk tolerance, and appetite for hands-on involvement. Let your entrepreneurial journey be guided by an informed long-term vision of where you want to take your business next.

Choosing dropshipping

Dropshipping is your best bet if you’re just dipping your toes into the ecommerce waters or have limited capital to start. This business model is made for those who prefer a hands-off approach to inventory management and value flexibility over absolute control. 

Are you keen on frequently switching up your product selection and jumping on trends? Check.  What about trying out eclectic niches without worrying about a steep starting investment? Double check. Verdict: dropshipping’s for you.

Plus, if the idea of eliminating the hassles of storage and shipping logistics sounds appealing, and you’re okay with thinner profit margins for the sake of reduced risks, then dropshipping aligns well with your aspirations. 

Remember, succeeding at dropshipping is about creating a brand that stands out among the competition, leveraging your unique selling points, and delivering value. Partnering with a provider like Printful that facilitates custom designs can help get you there.

Printful logo
man with jacket
Printful logo
Create and sell custom products online
Let’s go

Choosing reselling

Venturing into reselling signals your confidence in certain products and desire for greater hands-on control. If you’ve got the capital, and the idea of bulk buying plus higher profit margins is where your head is at, then reselling may be your arena. 

It’s a good fit for those who take pride in quality checks, personal touches, and direct customer interactions. Additionally, if you’ve spotted a product or niche with consistent demand and see an opportunity to buy at substantially discounted rates for bulk, then the reselling model can be highly rewarding. 

Keep in mind that this path does come with the major risk of unsold inventory and costly storage challenges. Still, with proper market research, reselling can be a goldmine.

Take your pick

By now, we’ve trekked the intricate terrains of both dropshipping and reselling. While both paths beckon with the allure of profits, they also come with specific sets of challenges. It’s important to note that ecommerce isn’t just about choosing a business model—it’s about exploring your passion for business, connecting with potential customers, and enjoying the ride.

Think about your long-term vision. Are you looking to rely on already-established products or interested in exploring trends? Do you have a penchant for hands-on management or prefer to focus on strategy and growth?

Whichever route you decide, be ready to adapt, keep learning, and stay connected with your customers’ evolving tastes. Both dropshipping and reselling are as much about understanding human behavior as they are about selling products.

author

By Sarah Reilly on Jan 16, 2024

Sarah Reilly

Sarah is a Senior Content Writer at Printful with experience in editing, translation, and teaching. She holds a Ph.D. in International Relations and is passionate about language.

Sarah is a Senior Content Writer at Printful with experience in editing, translation, and teaching. She holds a Ph.D. in International Relations and is passionate about language.