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How vertically-integrated retail brands can use wholesale dropshippers

Written by Spencer Durrant on June 16, 2015 in How to Sell Products Online

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Successful retailers understand that brand management is an important part of running a business. In today’s social media age, maintaining a positive, helpful, and active brand image is one of the most important things a company can do.

This need for intensive brand management is a large part of why the vertically-integrated brand retailer model has exploded in popularity lately. While entering the retail world with this model presents a significant cost barrier, it allows a business owner total control over every aspect of production.

With how brand-conscious vertically-integrated brand retailers can be, it might not make sense to suggest that these retailers use wholesale dropshippers. As it turns out, though, a few good reasons for this exist. Let’s take a look at how wholesale dropshippers can help vertically-integrated brand retailers.

Offers strategic brand partnerships

Remember when Apple bought Beats? That move perfectly illustrates how a third-party can create a strategic brand partnership for a vertically-integrated brand retailer, especially one as proprietary as Apple.

Before buying Beats, Apple had been selling large amounts of their headphones, both online and in physical stores. According to extremetech.com, Apple sold $1 billion worth of Beats headphones in 2013 alone.

By acquiring Beats, Apple can clear even more of a profit on the headphones, selling them in bundles with other items without the additional cost of producing an Apple-branded product.

Smaller vertically-integrated brand retailers can easily take advantage of this business model. By identifying other relevant products in your niche that you may not produce due to cost reasons, you can find a third-party supplier to bring those items to your customers. Offering the third-party product bundled with your proprietary product is a great way to expand your catalog without taking on additional production cost.

Seasonal and long-tail products

While most vertically-integrated brand retailers sell in a very specific niche, some retailers could benefit from selling seasonal products. Keeping seasonal products, like Christmas lights or Halloween decorations, in stock year-round isn’t cost effective for most retailers.

But listing these products during the times of year when they sell, and shipping from a wholesale dropshipper is simple and adds value for your customers, as well as additional revenue.

Along those same lines, long-tail products fit in this model as well. They may not sell in high enough quantities to make stocking them in your warehouse viable, but they sell enough that it’s still worth it to offer them to customers.

Even with the proprietary nature of vertically-integrated brand retailers, wholesale dropshippers can add value and increase the revenue of the companies who are willing to use them.

You can find more information about wholesale dropshippers and vertically-integrated brand retailers by downloading the free whitepaper, The Retailer’s Guide to Dropshipping.

retailer's guide to dropshipping

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