Important Things To Remember In Wholesale Buying
A reseller's profits are largely dependent on the best prices that he can source and sell his wares
, all the while keeping his sales costs to the minimum. While selling prices are dictated by the market realities, the buying prices are often a function of a reseller understands of the supply chain. This article talks about some important things to remember in wholesale buying.
1. Wholesale buying implies a marginal advantage that accrues to the reseller on account of quantities picked up. It is therefore important to understand and work with the minimum order requirements as well as any other sales guidelines that the wholesaler may have. In case you are being allowed to pick up single items then you are in all probability not dealing with an actual wholesaler but a middleman who is buying from a wholesaler. While this may seem advantageous, it also means that you are not getting the best possible price leaving you at a competitive disadvantage as compared to your peers.2. Margins can range from as much as 20-30% when buying wholesale. Most wholesalers have a bigger margin from which they can well afford to pass on this benefit to resellers who will need to spend it on marketing and listing costs. In case you are getting only a 5-15% margin, you are in all probability, not buying wholesale.3. There are manufacturer authorized wholesalers and then there are wholesalers. There can be as many as 2-3 wholesalers in a supply chain especially if it cuts across continents. The closer you are to the original supply source the better it is in terms of pricing, quality as well as reliability of supply. Be sure to find out which link in the chain you occupy.
Wholesale buying often requires picking up and storing large pallets which in turn, require investment in warehousing, storage and security. New resellers can bypass this huge investment by investing in a wholesale purchase model called drop shipping. This allows them to buy wholesale and sell retail but without the hassle of either storing or shipping.
It of course, means a small risk of sharing your database but that is usually not that big an issue when starting out. Try searching for drop-shippers that are actually company authorized or manufacturers themselves. These are genuine since they have a vested interest in expanding the retail base and don't charge for single item shipments also. Their objective is to build reach without using expensive middlemen and pass on this saving in the form of sales support and free shipping.
Because of the increasing popularity of this model, many middlemen are also posing as drop-shippers. Do not agree to any recruitment or processing fee. Also, insist on marketing collateral, original pictures and other sales tools. A genuine drop shipper will be more than willing to supply these at no extra cost. You could also ask for a stock list so that you can focus on products `in stock'
Important Things To Remember In Wholesale Buying
By: Jane M Dawson
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