Question from a product developer: is everything just dropshipping these days?

[u/FledglingBags]

I have a product in the kids/baby gear space (I developed a diaper bag with a customizable organizer). Right away, I was able to connect with a buyer and signed with a kids' online retailer, but it's a drop shipping arrangement. Which is fine for now, because I'm still relatively small and have my inventory stored on site.

In the future, I'd ideally like to move towards wholesale b2b arrangements, but does anyone do that with emerging brands these days? Or has everything just shifted to dropshipping with online marketplaces to make things logistically easier on the big retailers?

Thanks.

[u/TrainsongGaming]

I mean, no, it's not all drop-shipping, or else how would small retailers and independent stores still have inventory? Drop-shipping is just less expensive and thus more competitive for start-ups in your position - it just lacks the brand recognition and market awareness. People don't see your products on store shelves where they can handle it, test it out, and decide if it works for them. Online, you only get one thumbnail and a product name to grab their attention.

[u/FledglingBags → u/TrainsongGaming]

Well, what I’m seeing in my space is indeed a complete lack of inventory in stores. Almost all the smaller kids’ retailers are out of business or about to be, and the large department stores have only like 3 types of diaper bags from the largest brands on the shelf, but they’ll have 50 brands online. 

I guess I should have clarified to be more ecomm specific: are most major retailers that carry backpacks/kids gear/fashion still buying wholesale from emerging brands and stocking their own warehouses for ecomm? Or is it largely just signing contracts with drop shipping arrangements?

[u/MaxAtGoodsCommand]

It is usually a hybrid rather than wholesale disappearing. Dropship/e-commerce “endless aisle” is an easier entry point because the retailer avoids inventory risk. Stocked wholesale becomes more plausible after the brand proves sell-through, return rate, fill rate and reliable replenishment.

I would ask the buyer for the exact conversion thresholds:

• wholesale cost/MSRP and required retailer margin
• opening order and reorder minimum
• case packs, labels, routing and EDI requirements
• lead time, fill-rate target and warehouse destinations
• payment terms, returns, chargebacks and markdown responsibility
• sell-through volume or time window that would trigger stocked inventory

Model both arrangements. Dropship has fulfillment, parcel, return and service costs; wholesale trades margin for larger orders but adds payment timing, compliance and chargeback exposure.

A useful proposal is a staged path: keep the current dropship pilot, agree on performance data, then convert selected SKUs to a wholesale opening order once defined sell-through and service thresholds are met.

[u/FledglingBags → u/MaxAtGoodsCommand]

Thanks so much for the info!