Dropshipping companies are just like any other wholesaler out there in that they allow you to sell their products online. However, unlike most wholesalers who require bulk purchases, dropshippers allow resellers to purchase small amounts of an item. The dropshipper then ships these single orders directly to the customer who purchased the item from the reseller. Resellers don’t need to warehouse large amounts of product and ship them off individually per their customer’s orders. Dropshipping allows online business owners to sell products without ever handling the product themselves.

When online resellers first learn of dropshipping, the most popular reaction is one of incredulity. Dropshipping can seem almost unrealistic because of the flexibility and earning potential that it gives to online business owners. However, resellers should know that dropshippers must balance themselves out financially between their wholesale and dropship clients. What does this mean for dropshipping-hopefuls? There will most likely be a slight elevation in costs.

Here are a couple ways that dropshippers even out their costs:

1. Higher Prices. Dropshippers raise their reseller discount or wholesale price for dropshipping clients. The wholesale discount is usually offered at a certain purchase price tier, requiring the reseller to make larger orders. Although the dropshipper will offer a discount for smaller amounts, don’t expect it to be the wholesale price.

2. Higher Shipping Fees. Dropshippers also need to make up money lost on shipping. Shipping larger orders to one address is less expensive for the dropshipper than sending out individual packages. Generally, you can expect a shipping fee of an additional couple dollars per item or per address for dropshipping orders. Dropshippers pay more to have smaller amounts of items shipped, so they pass on some of this expense to the reseller.

Contrary to common knowledge, dropshipping is not a rarity, nor is it complicated. It is a genuine, increasingly popular reselling method that has taken the ecommerce world by storm. If you are interested in dropshipping products online, keep these pricing differences in mind so that you are not unpleasantly surprised when you receive your first invoice.