Dropship, 3PL or your own inventory
Updated · Vanta Foundry
Short answer
Should a research-supply brand dropship, use a 3PL, or hold its own inventory?
Dropship when you are proving demand: you hold no stock and pay only for what sells. Move to a 3PL once you know your best sellers and want a lower unit cost and control of your inventory. Self-fulfill only if you want to run a warehouse, because packing, lot records and returns become your job.
The three models
- Dropship. You sell; your supplier ships from its stock under your brand. You never own the inventory.
- Third-party logistics (3PL). You buy inventory and store it with a fulfillment partner, who picks, packs and ships your orders.
- Self-fulfillment. You buy inventory, store it and ship it yourself.
Cash
Dropship needs the least cash up front, because you pay for units as they sell. 3PL and self-fulfillment both tie cash up in stock before the first order arrives.
The trade is the unit cost. Buying in quantity usually lowers what you pay per unit, so the models that need more cash up front tend to cost less per order once volume is steady.
Control
With your own inventory you decide what to hold and when to reorder. With dropship you depend on your supplier's stock levels, so ask how out-of-stock items are handled before you list them.
In research supply, control also means documentation. Whichever model you choose, every shipment should record the lots inside it, so that you can answer a customer's question about an order with the matching certificate of analysis.
Risk
Dropship moves stock risk to the supplier. You can't be left holding units that don't sell. 3PL and self-fulfillment keep that risk with you, along with storage conditions and expiry dates.
Self-fulfillment adds operational risk: packing errors, missed lot records and delays when the person packing is unavailable.
A sensible sequence
- Start on dropship while you learn what sells.
- Move your consistent sellers to 3PL once their volume is predictable.
- Keep dropshipping the long tail, so the catalogue stays wide without tying up cash.
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