Is Buying Wholesale Merchandise to Sell Online a Viable Business Option?

A large number of people selling products on websites like Amazon or eBay buy their merchandise from wholesale suppliers. This has become a great way for many to make a living or just earn some extra money in their spare time.

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Buying wholesale merchandise means you are buying stock usually by the pallet, getting a lower price per unit, which leaves you room to earn cash on the markup. This is why buying wholesale merchandise is a viable business option.

However, there are some things one should have in mind in order to make the best out of wholesale merchandise.

“Buy Low, Sell High”

This is something every online reseller should run their business by. But simply buying the cheapest wholesale merchandise while disregarding the quality will not get you far. The goal is to find high-quality merchandise for the cheapest prices possible.

Buying wholesale merchandise from wholesale suppliers is the most popular way. However, getting the right prices from the wholesale suppliers that would allow you to stay competitive in the closely contested markets right from the start could be a bit tricky.

Long-term clients usually get favorable and flexible contracts, allowing them to sell single products at what seems wholesale prices on Amazon and eBay. The popular advice is to form business relationships with several wholesale suppliers, and there are several reasons for adopting such tactics.

First, if you are looking to have stock available at all times, you should have several sources at the ready. If one wholesale supplier lacks the merchandise you need, another one might provide it.

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Second, despite the favorable terms, wholesale suppliers offer to their loyal customers, it is not unusual for you to find out after making a purchase that you could have purchased the merchandise somewhere else for a bit less money. When you have a network of suppliers, you are the one in control, and you can pick and choose the supplier depending on whether the terms suit you or not.

Buying from Liquidation Platforms

pallets in warehouse

Another option that is becoming more and more popular recently is buying through online liquidation platforms, and there is one obvious reason for that: the price.

By working directly with liquidation platforms, retailers and manufacturers get to sell their merchandise directly to other businesses, avoiding the wholesalers and keeping the prices low.

However, in the minds of many people, liquidation immediately gets associated with refurbished products, customer returns, and worse, faulty items. This is not entirely unfair, considering the record of the industry. However, things have started to change, and the quality of the merchandise has gone up significantly.

While the majority of merchandise is still customer returns and used merchandise, reputable companies have started providing higher quality merchandise by partnering with major manufacturers and retailers. This is where you have to your investigation and research skills.

Finding a reputable liquidator will give you the opportunity to turn the “buy low, sell high” strategy into reality. There are several reasons for this being possible, besides the lowest prices.

One of these reasons is the fact that top liquidators have exclusive partnerships with retailers and manufacturers that guarantee not only low prices but also the higher quality of the wholesale merchandise. You will see that the likes of Direct Liquidation have formed ties with retailers such as Walmart or Target. This not only ensures you are getting higher quality merchandise but gives you an additional benefit.

With their reputation on the line, major retailers have dedicated departments dealing with customer returns. Products get reviewed, refurbished, tested and readied for liquidation. Some items are returned in brand new condition, but due to the legal constraints, these can’t be sold through retail again and have to be liquidated. And you can find such merchandise from Walmart and Target being liquidated. The advantages of this merchandise are its condition and market appeal, but also the fact that it gets a money-back guarantee and returns policy as well as extended warranty added to it.

And to find this merchandise all you have to do is check the manifest that is provided by any reputable liquidator. This is a packing list showing you the type of merchandise within a pallet, its quantity, the description as well as the quality. This not only allows you to buy brand new or as new items but also only the merchandise you want and need, or what your customers demand. And all this at a fraction of a wholesale cost of the merchandise, which leaves you extra room for profit on resale.

Selling for a profit

Now that you know where to source cheap, quality wholesale merchandise, it is time to learn how to sell it for a profit. Buying products cheap and marking them up is not as easy as it seems.

Trying to recover your investment in one big sale is not the way to go. The secret to making a steady and healthy profit is patience and market research. With over 220 million online shoppers in the United States alone, there is plenty of potential customers; every product will find its place at the right price.

Patience is crucial. You should calculate your profit after you have completed the sale of all the products in the wholesale pallet you have bought. Market research is essential because it will show you the market trends and the dynamic.

While sourcing the wholesale merchandise, you will have familiarized yourself with retail prices of single products. Doing some research on your competition will show you the prices you are competing against. This information will allow you to set your prices right to stay competitive and make selling wholesale merchandise a viable business option.

Additionally, you should look into undersupplied and niche markets that have a healthy demand for a certain product. With less competition and with the cheaper supply chain set up, you can be the one dictating prices and maybe scraping some extra bucks from the deal.

And these markets are not only good for making extra cash, but they are also a good starting point for any aspiring business owner hoping to learn the ropes of running a company at a slower pace and on a smaller scale, before jumping into something bigger, or simply deciding to expand the scope of their operation.

In any case, buying wholesale merchandise for resale is a viable business option, but as with anything in life, it takes time and hard work to make it a success.

Direct Liquidation is a goTRG company.

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