Dropshipping for growth: A smart strategy for both manufacturers & retailers

Channel conflict is an ongoing battle for manufacturers, wholesalers and distributors so they are often loath to open a direct-to-consumer channel and potentially damage relationships, or lose business, from their retailers/resellers who they are looking to support.

However, like any business, they are always looking for new ways to increase their revenue. One mutually beneficial idea, continuing to grow in popularity, is offering dropshipping on behalf of those retailers and resellers.

What is dropshipping?

So, what do we mean by dropshipping? Dropshipping is a fulfilment method where an online store sells products without physically keeping them in stock. Instead, when a customer places an order, the retailer purchases the item from a third-party supplier—such as a manufacturer or wholesaler—who then ships it directly to the customer. This allows retailers to offer a wide range of products without managing inventory, reducing upfront costs and logistical complexities.

A typical dropshipping set up looks like this

Why tradeit/Red?

Manufacturers and wholesalers looking to expand their reach and support their retail partners need an advanced ecommerce platform like tradeit to efficiently facilitate dropshipping. Managing a dropshipping operation at scale requires seamless integration between product data, stock management, order processing, and retailer storefronts, ensuring that products are accurately listed, stock levels are updated, and orders are fulfilled directly to customers without delays

tradeit provides automated workflows, real-time data synchronisation, and flexible order routing, allowing manufacturers and wholesalers to streamline operations, eliminate manual inefficiencies, and offer a superior dropshipping service. This not only enhances their relationships with retailers/resellers by providing a hassle-free fulfilment solution but also opens new revenue streams, enabling them to scale their business without the complexities of direct-to-consumer selling.

Benefits for the dropshipper

Lets' look at the an example of how this benefits a dropshipper using tradeit in the real world.

Tropicana Wholesale are the UK's Leading Health & Sports Nutrition Supplements Distributor so were looking for further ways to grow and cement their position as the market leader by offering their ‘TropShip’ solution to customers. Without launching their own B2C channel and risk upsetting their suppliers, their dropshipping solution still provides them with several key benefits:

1. Increased sales & revenue

They gain access to a broader customer base without investing in direct marketing or selling directly to the consumer themselves. More resellers selling their products means higher order volumes.

2. No need for direct customer acquisition

Their resellers handle customer acquisition and sales, reducing the need for extensive marketing efforts. This saves on advertising costs but still enables them to reach new customers.

3. Reduced inventory risk

They no longer rely solely on in-house sales channels—products move through multiple resellers so there is a steadier order flow helping to manage stock levels more efficiently.

4. Streamlined operations

As the focus is on fulfilment and logistics rather than retail operations, there is less of a requirement to manage customer enquiries, returns, or front-end sales.

5. Lower overhead costs

There is no requirement to run a retail ecommerce store or invest in front-end retail infrastructure. This helps avoid any costs related to maintaining physical storefronts or customer service teams.

6. Scalable Business Model

They can easily scale fulfilment operations by working with multiple resellers. This provides them with the flexibility to expand into new markets without direct investment in B2C sales.

7. Increased Loyalty

By providing a dropshipping service to their customers, those who adopt it are more likely to remain loyal to them as a supplier due to the extra value they are providing.

How it works

There are two different options for using Tropicana Wholesale's dropshipping service:

Basic

The basic option is easy to set up and use, making it ideal for smaller retailers, or personal trainers, looking to take advantage of their dropshipping service. Firstly, the retailer registers online with Tropicana Wholesale for a dropshipping account, which if approved enables them take advantage of the ‘TropShip’ service. This removes a few options around delivery, currency, and their loyalty scheme but still gives them access to the entire product range and any special offers that Tropicana Wholesale are running.

They would then receive a stock feed (containing product information like Tax Rating, Barcode, Nutritional Information, Expiry Dates etc…) to display those items on their own website or to their customers. They are also asked to send a company logo to Tropicana Wholesale which is applied to packing slips so they appear as if they’re coming from the retailer directly rather than Tropicana Wholesale.

Once a customer orders from them, they can then take that same order and place it via their dropshipping account on the Tropicana Wholesale website. Although this process is quite manual it’s a good place to start for a small business.

Advanced

The advanced option applies the same initial set up process with account application, approvals process, and the retailer's logo and stock feed, but the ordering process becomes automated through the use of an API.

Once their dropshipping account request is approved, the retailer can access details of the API in their online account meaning they can set up the automation at any time and can route orders directly from their website to Tropicana's for fulfilment. These orders are flagged and tradeit runs a scheduled task to collect them and process them. Checks are automatically carried out to ensure that the delivery location is valid, products exist (and are live), any quantity restrictions applied to the product are met, and payment can be processed. If the criteria is all met the order is processed and Tropicana Wholesale ship the order out directly to the customer.

Both options give retailers/resellers access to as many of Tropicana Wholesale’s products as they want to sell without holding a single item in stock, whilst also being able to take advantage of any promotions that Tropicana Wholesale are running.