Your days as an employee are almost over. For a while, you have been thinking about filing in your resignation and becoming your own boss. You are well skilled and confident in your ability. However, plunging into business ownership is not something you are willing to take lightly. Nor should you, since running your own business is not an easy job.
You have already decided that you are interested in purchasing wholesale merchandise from wholesale suppliers or liquidators to resell online as it would give you a chance to buy low and sell for a healthy profit. However, you are not sure what market to enter. You have some ideas about what you’d like to do but you are not sure if these are viable options or not.
What most experts will recommend in this case is to look for a niche market, an undersupplied segment that will have less competition but a healthy demand you can cater for. But choosing the right niche can be a bit tricky because at times the future business owners buckle under the pressure of choosing the right niche and hit the wall even before getting their venture off the ground.
Amazon’s most popular categories for sales. Via: Scrape Hero
However, there are certain steps that could help you ease your way into making the right decision, or at least point you in the right direction. Hitting the ground running on your first attempt requires many factors to align, together with hard work and a bit of luck.
So to get on your way, here are some steps to follow as you step into the business of buying and reselling wholesale merchandise.
1. Make a List of Products
Everyone will tell you that the first step is to sit down and list all the things you love doing, all the merchandise you love working with and all the markets you’d like to plunge into.
Many make a mistake of entering a market that could be not only oversupplied but full of experienced sellers with a strong customer base and prices that are hard to beat. Electronics market is such an example. Profitable, yes, but one of the most competitive markets you could enter, and one that reduces your chances for success.
So, instead of going in head first, take some time, make a list of interests and things you like and then consider your options.
2. Ask the Right Questions
You might have the list ready but it contains five, or 10 or even more interests and you are not really able to pick one. You’d want to deal with wholesale clothing, smartphones, laptops, even the odd wholesale pallet of kids toys. With all the options you might find it even harder to decide.
But, there are a few questions you have to ask yourself in order to narrow down your options even further. Questions like, are you good at anything you have on your list? You have to ask yourself for one simple reason, to determine your real talents and affinities, not something you’d like to be good at, but in reality, you are not.
Also, which one of the options would make you the happiest? Or which of your passions and talents bring you the most joy? Look at your list and only pick those that answer your question positively.
The next step is to see which of those options is in demand by the customers. Do some research online to see where and by how much you can utilize your talent and offer the option you selected to cater for the demand and secure healthy profit.
To secure the right profit, ask yourself one more questions. Which is the option, out of the ones that remain after the first three questions, that the customers are willing to pay a significant amount of money for?
Once you have all the answers, and you have narrowed your list further, it’s time to take the next step.
3. Research the Target Niche
This is not just to see what is being sold and what are the general prices. This research has to be as thorough as you are capable of. As noted previously, some markets are closely contested, with prices just edging slightly above wholesale. But there are profitable pockets or niches out there and you just have to find them.
Even if you see a large number of sellers, this does not mean you can’t make it in the niche, it just means you have to find the right way to stand out in the crowd. See what links are missing, what are your options of making a unique offer.
There are certainly few points you have to focus on in order for customers to take notice, namely, quality products and services, an open and welcoming approach and a bit of aggressive advertising.
4. Scout Your Customer Base
After looking into your competition, it is time to look at your potential customers. We briefly said that you should know what your customers might be willing to pay big money for. Here in this step, you should put yourself in their shoes.
Ask about, go online, find some customer forums and see what your potential audience really needs, what their concerns are and what a high-rated seller would look like in their view.
5. Find Your Wholesale Supplier
As you have decided to work with wholesale merchandise, it is time to find the right supplier. This is important since you will be doing some numbers crunching later on in this guide.
The previous steps have shown you the competition, the price range, the client’s needs and appetite as well as how much they are willing to pay for certain products and services. All this has to be taken into account when you are looking for a wholesale supplier or liquidator.
Going with the first supplier that has listed the items you need in their offer is not the way to go. Make sure you do more research, turn to the customers, see what they think of the wholesale supplier, read the reviews. Look at the services the wholesaler provides and check out the quality of merchandise they offer, as well as the prices.
A good wholesaler will be a reputable one, offering you high-quality products at prices that will enable you to stay competitive in the market while making a healthy profit.
A very important advantage when dealing with a wholesale supplier is your ability to stock up quickly, as you will be purchasing items in bulk, or by the pallet, giving you an even lower price per unit.
6. Do the Numbers
So far you have a good idea about the pricing and customer needs, as well as your wholesale sourcing options. Now it is time to do the math and see which of the niche markets you previously listed really gives you the targeted profit.
Some of your markets might not be as viable as you have hoped for, while others might look like the right fit already. In any case, the combination of the right wholesale supplier or liquidator, your hard work, and smart planning should do the trick.
7. Put Your Work to the Test
There is no point in waiting any longer and going over your options and ideas. You have made your selection of the market, you have lined up your wholesale suppliers that will provide you with the best overstock merchandise and all that is left to do is start testing the market.
Make your website, online store or join one of the online platforms like eBay or Amazon to sell there and start listing your products. As you have purchased your products by the pallet, your price per unit is lower and now the numbers game comes in. List your products one by one and set your prices just below your competition, but just enough for you to make a profit and see how things go.
8. Leave your Options Open
This is not as much of a step as an advice for those that have completed the list we made and have already started selling wholesale goods online.
You might have done all your due diligence but something is not right, the sales are not as you have expected and you have a feeling other markets would be a better option. But don’t jump to the new market immediately. It takes time for the market to get used to you, and for you to strike the right chord with the market and fine tune your offer. If you decide to branch out eventually, it is never late.
There are plenty of benefits from the work you have previously done. First, there is a high learning curve in the business, so make sure you are soaking in all the knowledge you get from the experience. Your goal should always be to create something bigger and strive for more, which is why you will be eager to try new markets until you find the one that will not only bring you bigger profits but also make you happy.
And over some time of doing business, successfully we hope, you will have created business relationships with wholesale suppliers and customers. This is a good thing because wholesalers and liquidators will reward loyalty and over time you might be getting better offers from the suppliers, cheaper services, advance notices of incoming goods, all of which will play in your hands and enable you to be more competitive and to crack into new markets that seemed too competitive for you.
So take your time, stay positive and search until you find the right recipe for your success.