Hi Damon,
I notice that you mention you are getting products drop-shipped at wholesale price, there seems to be some confusion here. Wholesale price and drop-shipped price are very different. Wholesale price is set on volume purchasing, not drop-shipping, you essentially get a better price per item because you are spending more cash on stock.
Drop-shipping doesn't give you the same price because you aren't spending the same amount of cash to buy stock upfront.
Now some wholesaler suppliers may offer a drop-ship service as well as wholesale, but that service with be at drop-ship prices, not at wholesale prices. The only way to secure wholesale prices is to purchase wholesale, not drop-shipped.
You mention that this is a SaleHoo approved supplier. If this supplier is assuring you they are providing you with a wholesale price on items they are drop-shipping on your behalf, can you forward me the supplier's name and any communication you have from this stating that is what they are doing and I will have that followed up for you.
Drop-shipping has many advantages over wholesale, for example the low to no cash flow required to get into the market and not requiring storage space to hold stock, as well as not have to do any of the packaging or shipping yourself, but perhaps one of the biggest advantages is that it's low to no risk,
Wholesale is a much higher risk supply model to use because you do need to spend cash flow up front to secure stock. So if the market slows in your particular market or the market in general, then you can get caught sitting on stock that isn't just hard to move, but may well not be worth what you paid for it upfront.
Then of course you have to have the storage space to hold the stock and do all the packing and shipping yourself.
So that is why there is a big difference between wholesale and drop-ship pricing. The lower the risk, the lower the potential reward (profit) The higher the risk, the more potential reward (profit)
This has flow on effects into the general market of course and is most noticeable in multi-seller markets like eBay and Amazon. What it does is put drop-shipper's in direct competition with wholesalers and of course those using wholesale as a supply source are always going to have more margin in the products to shut drop-shippers down.
Then you add in another couple of factors like wholesale suppliers themselves using these platforms to sell direct to the public at prices that those buying wholesale to resell struggle to compete against. Then of course you get loss leading causing chaos in the market, where sellers are selling products at cost or below cost to use as a marketing tool to generate traffic flow.
On top of all of that, you then have desperate drop-shippers cutting their already small margins down to virtually nothing in an effort to just make something.
It all ends up pushing the entire market prices down and makes it a super competitive place to try and do business, especially for someone without a seriously well thought out plan of how to compete.
The entire online e-commerce market is a very complex beast to understand, but it's vital to understand the forces at play within the market that dictate the prices if you want to stand a chance of really competing within that market.
So it's simply not a matter of just finding the right suppliers that can give you a price to stand out from the crowd, if they existed, then everyone would use them and then it would be very quickly back to the status quo once more. Standing out from the crowd is the challenge for every seller on these platforms, but you have to find a way to do that yourself, because the market is at a point where a supplier isn't going to be able to help you unless you are in a very fortunate position where you are cashed up and can afford a very large bulk shipment of product that you can then move in and dominate a particular market segment with.
I hope that sheds some light on how it all works for you. .
