Buying wholesale merchandise to stock your online resale business is probably the best option when it comes to securing the best mark-up profit margins.
When purchasing wholesale merchandise, you are buying in bulk, getting a lower price per unit, which roughly translates as ‘more for less’. Increasing the price by a certain percentage gives you the chance to profit, but you can maximize this by taking full advantage of the reduced prices and the timing of your sales.
Here are a few tips you should follow.
The Cheapest Wholesale Sources
Buying from retailers will not get you far unless you are buying seasonal goods during closeouts or at the end of the season when retailers are looking to get rid of the “old merchandise” to free up space for the new incoming collections. However, buying in such a way requires careful planning and enough storage room to keep your merchandise stored away for long periods before it is in season again.
Here we will focus on the wholesale suppliers that offer you the chance to buy merchandise in bulk, usually in wholesale pallets. The variety and availability depend on how well the supplier developed business relationships with retailers, manufacturers and other sellers.
Firstly, if you are looking to enter the electronics market, you are in for a tough time, because it is one of the most contested market segments online. It is very competitive and securing the right products at the right price is essential. More often than not, you will find that products sold online are already near wholesale prices, leaving you no clear margin for profit.
If you wonder how such prices are possible you should look into the sellers. The most experienced ones will have the best prices usually, and this is because wholesale suppliers will reward loyalty. Long-term customers often get offered better, more flexible terms, lower prices, and very often better shipping terms.
However, if you are not able to find the best deal with the wholesale suppliers, there is a way to buy wholesale merchandise even cheaper. Online liquidation auctions are becoming more and more popular with online resale business owners. The main reason is the price – usually even lower than wholesalers.
Although there are a lot of refurbished items on offer at the liquidation companies, the standard set by the liquidators when it comes to products that are eligible for listing in the auctions or buy now sales is set very high, guaranteeing quality. Larger Liquidators who refurbish products even give a warranty on these products.
As a note of caution, always look for the most reputable liquidators, because they will be able to provide the best products and best services. Simply buying merchandise at the first auction you find online could lead you to purchase a pallet of mislabelled, missing or undeclared faulty merchandise, so keep your eyes open, and do some research into the businesses prior to making any investments.
One important way to choose a company is based upon the information it supplies. For you this means complete, accurate manifests. This way you’ll know exactly what you’re buying, and know exactly what to expect loaded onto the pallet. While reputable wholesalers and liquidators will include comprehensive manifests, some may provide no manifests at all, or ‘estimated’ manifests – this means one of two things; either the company is lazy, or they are actively trying to hide what you are buying, being as vague as possible, to hide the true value of the lot.
Either way, you want to stay away from these companies. Buy with confidence from suppliers who provide complete openness and clear, full manifests for every lot they sell. This is particularly important for mixed goods pallets, which have a variety of different products mixed together. You always want to know what you’re buying, that’s your right, and the only way you can reliably plan your sales.
Making Profits from Wholesale Goods
Buying wholesale merchandise from liquidation auctions gives you a great opportunity. Buying at prices below wholesale enables you to stay competitive on websites such as Amazon and eBay and undercut much of your competition.
The online sales market is growing and with it your competition. But with a potential customer base of over 220 million online shoppers in the United States alone, it is likely that with competitive pricing, quality products and some effort to market your online store, you will grab a share of that customer base.
The safest way to secure your place in the market is to target undersupplied segments. This should be uncovered through research that should be done prior to making the investment in wholesale merchandise. Finding undersupplied markets will direct you towards the products you should be looking for, instead of going directly to the markets that you find most attractive, or feel impulsively drawn to.
The truth is, everyone wants a piece of the most attractive market due to the potential profits, however, many neglect the fact that these markets are the most competitive, and many newcomers come and go overnight as they are unable to claim their share of the customer base.
This is why it is important to build a customer base and your own reputation in an undersupplied market, by providing competitive prices and quality products while gathering positive reviews in the process. In addition, undersupplied markets will have less competition, making it easier for you to reach potential customers and build your reputation.
This will be helpful not only in terms of generating profits but also if and when you decide to branch out into other markets that are tightly contested, you’ve got a huge advantage of having built up such a reputation, and hopefully grown in size so that you can work with higher volumes of stock turnover, and lower individual mark-ups.
Once you have built up your reputation and a customer base, it is easier to start introducing new products and branching out into new market segments. By the time you make that step you will have built a business relationship with your wholesalers and liquidators, and know which you can trust.