5 Things You Need to Know when Buying Wholesale Products to Sell Online

You have decided to be your own boss and start your own business; however, you want an easy and quick way to do it. Selling online through platforms such as Amazon or eBay are certainly options to consider, as is creating your own website.

Although these are quick options, there are some rules and regulations you have to follow to make sure you stay within the legal framework of your state as well as on websites like eBay and Amazon themselves.

1.  The Rules and Regulations

When you are starting a business online, either through the above platforms or through your own website, there are certain rules to follow, the first of which is that you have to form a company for your business and register a business address at your post office.

The business name you chose has also to be registered with your local clerk and get a federal tax ID number. You must also register for all state and local taxes related to your business.

You will also need to familiarize yourself with the accounting and legal side of the business or hire an accountant and a business lawyer. Research and see whether you need a license to sell online. Also, familiarize yourself with deductible expenses and learn to use a bookkeeping software program.

Once you have understood and sorted all the legal requirements it is time to do market research and find the merchandise you will list and sell.

2.  Researching and Sourcing Wholesale Products

Finding the right market is half the job when it comes to securing success for your online business. Firstly, you must decide what are the products you would like to sell and then find a market within that product group that is undersupplied. This will ideally give you the opportunity to sell in a niche market with limited competition and a healthy demand.

Looking at the most attractive markets, you will hardly be able to miss the electronics category, that probably is the most attractive to most sellers, who will feel more familiar with it than other areas. However, it will also be one of the most competitive markets you can find.

Although you will always find a great deal of supply as well as demand for electronics as a whole, as noted above, there are niche markets within the electronics segment which might still be undersupplied. For example, the biggest sellers are smartphones and laptops, and it’s not too hard to specialize into certain brands of these items.

Away from electronics Maybe you are into buying and selling seasonal goods as you only have time during the summer maybe and you specialize in selling summer clothing. Books are also some of the top selling items online, and these are areas within which it may be easier to specialize.

Whichever market you chose to enter, it is essential to buy at the right price, as well as from a reputable supplier. If you compare the prices of the products you are interested in selling to products already being sold on eBay, you will see that these prices are closer to wholesale prices. This means you need to buy merchandise at wholesale prices or even below, to be able to compete with established sellers already in the market.

Finding a reputable wholesale supplier will get you access to items to purchase in bulk at wholesale prices. This will give you a slim margin for profit on each individual item, but the profit should be counted once you sell all the items you bought in a wholesale pallet.

Another option to find cheap wholesale merchandise is to buy through online liquidation auctions. These auctions will offer overstock merchandise, customer returns, and refurbished products.

If you buy through a reputable liquidation auction, which is something you should always do, you will get top quality merchandise from top tier brands. This is due to the fact that reputable liquidation auction companies have exclusive contracts with top retailers and manufacturers.

An additional positive is that some products can be bought even below the usual wholesale price, leaving you with more room for profit, and a better chance of being competitive in such a tough market.

3.  You Need to Consider Customer Returns and Refurbished Products

If you think that buying customer returns or refurbished items bring you lower prices at the expense of quality, you are wrong. At least 30 percent of items bought online get returned to the seller, but very often these products are returned unopened since buyers can’t test the products they buy online and only realize they made a wrong choice when the product is delivered.

However, the buyer can’t sell the item again as new but has to label it as returned. Even items that have been returned due to certain faults are tested thoroughly once repaired, to ensure they are back to the condition they were in when sold. This is why you will get a 90-day warranty on products you buy from our liquidation auctions.

4.  Wholesale Pallets Should Come with Manifests

Another advantage of dealing with a reputable wholesale supplier or a liquidator is the fact that you can avoid buying salvage items unless you want to. Every wholesaler or liquidator which cares about its customers will go through the purchased items, review, grade and sort them, filling a comprehensive manifest of the what is inside a pallet.

It is not unusual to find wholesale suppliers having incomplete manifests for the pallets they sell, or even no manifests at all. Some will even go as far as misrepresenting their merchandise or showing the pallet to contain high-quality items when in reality the goods contained in a pallet are damaged or not working.

This is why it is important to read through the manifest and stay away from any suppliers that might not reveal the full contents of a pallet.

5.  Don’t Forget Pallet Shipping Costs

This is a something many forget to factor in when deciding on their budget. Shipping costs have to be factored into the price you are paying for a pallet. You should be well aware of the shipping costs as well of the shipping and delivery services your supplier may or may not have. In any case, to help you out with understanding the matter, check out our comprehensive shipping guide.

So, with the steps and requirements shortlisted, make sure you know what you’re getting into before plunging into the online selling world.

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