How to Determine the Most Profitable Products for Your Business When Buying Wholesale
For your company to be successful, you need to have the right products available for your customers. Of course, those who are just starting out, and even those who have been in business for a while, may have difficulty when it comes to choosing the best and most profitable products for their business model.
Before you can choose the best products that will be the most profitable, it is important to know your customer. The types of products that you are buying wholesale will be based on the niche you choose, but you also need to be certain that those are the types of products your customers will want to buy. How do you know this? You need to know your customer.
Use customer data to get a better understanding of who they are and what they want. This includes examining past purchases, behavioral data, web analytics, and looking at the types of products your competitors in the same niche offer. What are their bestsellers? If you have the same type of customer, it stands to reason that the same or similar items can sell just as well for you.
Work to understand the psychology behind what the customers want and how certain products can benefit them, just as larger companies do. Demographics are important, so you have a good understanding of the gender, job status, and age of your ideal customers, but you need to know more.
Learning about the psychographics of the customers can help immensely. They can tell you more about the lifestyle and behaviors of the customer, which can give you a better understanding of how they spend time and money.
Once you have a solid understanding of your customers, you can then look at the products you are considering buying wholesale. Utilize the information you have learned about the customers to help you determine whether certain products would be a good solution for their needs.
What Is the Right Niche?
While it is true that some niches are more profitable than others, the one you choose should include products that you understand and are passionate about. This will help make the marketing and blog writing easier for you. Of course, you could always hire outside writers to help you if you need to have material written about products with which you are not familiar.
Some of the niches that tend to be the most profitable, and that you might want to consider include:
- Automotive parts and accessories
- Consumer electronics and accessories
- Jewelry and similar accessories, such as watches
- Toys and games
Of course, you can find plenty of other types of items when buying wholesale. As long as you know the types of items that most interest your customers, you can find those that can be profitable for your business model, whether you have a thrift store, a boutique, or an online only shop.
What Is the Profit Margin?
Another one of the huge factors to consider when you are buying wholesale products to sell to your customers is the cost and the potential profit margin for those items. Naturally, businesses want to make as much profit as possible, but you still need to keep those prices in line with what your customers expect to pay.
Again, looking at the competition that is selling similar, or the same, products can give you a better idea of what you could charge for those items and reasonably expect your customers to pay.
You will then need to look at the price of buying wholesale and determine whether the current price will allow you to make a good profit from the sales. The following chart illustrates the various pricing strategies that you can utilize.
You need to take the time to get an idea of how much profit you could make when buying wholesale goods, and be sure to factor in other potential costs, as well. This will include things such as paying for warehousing space, as well as shipping from the wholesaler.
When it comes to buying wholesale, one of the biggest benefits is that you can find fantastic bulk deals. This helps to drive down the cost of the products individually, which means it tends to be easier to turn around and sell them for a profit. Just make sure that you put in the time and the effort needed to understand the true value of those products for your customers first. After all, you can only sell them for what the customers are willing to pay.
Make Sure You Are Ready to Sell
One of the other things you need to consider when you are marketing your products is just how and where you will market them, and how much the marketing will cost you. Factor this into the cost of the products to make sure you are still capable of making a profit on them.
The steps taken in marketing often vary by the size of your business, as well as your niche. To maximize your sales and profit, you need to have an online store where people can buy. This is true even if you have a brick and mortar store. With more and more people buying on the web today, you do not want to cut off part of your potential customer base.
Your site should be mobile friendly, too. Many people are buying right from their tablets and phones, and you want to make it as easy as possible for them. Your website needs to be SEO optimized, easy to navigate, and the items you have for sale should have accurate descriptions, along with photos.
Having a blog along with your site can be quite helpful when it comes to improving your SEO. This will give you a higher ranking in the search engines, and if you provide quality content in the posts about the items you are selling, it can help to capture and improve relationships with potential leads.
Never buy on impulse, even when a deal appears to be great. Put in the work first and make sure that buying wholesale in that instance can still make you a good profit.
Jordan currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Jordan is here to help you grow your business.
View Jordan’s Bio on YouTube.