4 Myths About Wholesale Buying
Starting my first business was exciting but at the same time a confusing process. It has proven to be very profitable for millions of people in the past, and I was hoping it would be for me too. However, I had to master wholesale buying to make it so.
But, have no worries, as it’s not rocket science. Anyone can learn it with a bit of attention and effort.
In this article, I’ll go through several important things you have to know about wholesale buying. You’ll become a lot more competent by knowing the best wholesale products, how to find them and where they are best to sell. I’ll also debunk a few myths about wholesale buying and tell you the truth.
What Is Wholesale Buying?
The difference between buying commercially and buying in wholesale is the number of products I’m purchasing. Buying in large quantities from a supplier will reduce the cost of each unit being sold. Whether I’m buying from a brick-and-mortar store or an online shop, the same principle applies.
Buying products in wholesale will always get me products at a much lower price. Wholesalers usually get their products directly from the distributor or manufacturer. This cuts out the middleman and lets me land a much better deal. I don’t have to pay their marketing costs, employees’ wages and any other fees involved.
The Main Benefits of Buying Wholesale
The greatest benefit of buying wholesale is saving a great deal of money. In any other case, the prices I pay have to cover:
- Employees’ wages
- The shop fees of online stores
- Shipping and management fees
- Packaging fees
- Marketing costs
Wholesale purchases allow me to get my products in bulk at heavily discounted prices. The amount I save increases my profit margin by a great deal.
I always have to work on building relationships as well. The better relationship I have with a wholesale supplier, the more superior deals I can make. It allows me to negotiate better prices, faster shipping, higher quality products, and more. The more you give to these suppliers, the more value you’ll get back from them.
Debunking Myths About Buying and Selling Wholesale Products
Myth #1: You Can Make the Most Money By Selling Wholesale Products
It definitely seems logical to sell your products in one of the world’s largest marketplaces. However, only later did I realize that a lot of people, including myself, are struggling to make money there. There were usually 100 other users selling the same products as I did. It’s easy to get into price wars and people will always flock to the lower prices.
In this case, large stores only buy more products to be able to sell them cheaper and make a greater profit. However, for small businesses, this can be deadly.
There’s just way too much competition online for popular categories like electronics, car parts, computer games and more. If you’re new, these territories can get really harsh because you can’t stand up against well-established businesses.
If your product does fall into this category, you should move to a less competitive one. Maybe you could move to local websites, newspapers and less crowded online marketplaces.
Myth #2: You Can Find the Best Wholesale Sellers Online
This couldn’t be further from the truth. Sure, you can find wholesalers like Pauldigo and plenty of other sites. Many of the wholesalers I’ve dealt with didn’t have an online presence I could rely on. However, I found them in other sources like trade magazines or Closeout News fairly easily. The fewer people try to stock up, the more likely I was to get an exceedingly good price.
Working well with wholesale is actually about building good relationships. The better your relationships, the stronger position you’ll have for getting better prices.
Myth #3: Researching Your Prices Is Unnecessary Because It Requires Too Much Effort
Everyone knows that research and planning are important, yet very few people are actually doing it. It really is boring to constantly sit in front of paperwork and your computer. But, that is the basis of running a lucrative business.
Somehow, a lot of people think that they “just know” the price of a wholesale product or how much profit they’ll have. Of course, reality kicks in when they see that the prices are constantly in flux. Doing proper research to keep yourself up to date is very important because:
- First and foremost, you should always make an estimate of how expensively you’ll be able to sell a unit before you get started. For very popular items like phones, computers, and video games, the profit margin is pretty low.
Sure, these things are insanely popular and the market is large, but that oversaturated market is what makes things harder. This means we have to put in a lot more work for a lot less money. I just don’t roll that way.
Nevertheless, I didn’t have a clue about which markets are actually oversaturated until I started researching. Diving into statistics, prices, and thinking things through helped me make much better decisions.
- Secondly, how you perceive value might be completely flawed. People usually believe that “wholesale” means buying at the fifth of the retail price. However, that’s as incorrect as it gets.
Some people actually think that a shipping container worth of plasma TVs will only cost them a few thousand dollars. They get a surprise when they find out its actually several thousands of dollars.
Buying products in wholesale doesn’t always mean that I get a huge return from a tiny investment. I can definitely find impressive deals, but only if I do enough research and build relationships.
Myth 4: You Can Buy Niche Items from Light Wholesalers
Everyone wants to find niche items that nobody has found at a competitive price yet. But don’t think that you’ll find an inexpensive wholesale deal for left-handed guitar necks after a quick Google search.
They are called niche products precisely because only a small group of people are looking for them. That is why finding a supplier will take plenty of work on your part. I only managed to find such items at independent wholesalers, and I even had to contact their manufacturers.
How You Can Find and Buy Wholesale Items Online
Even though I discussed that it’s not easy to find a wholesaler with just a quick search, you can still find good wholesale deals on the web. You only have to establish a few basic things before you jump into it:
1. Figure Out What You Want to Purchase and How Much
What kind of brand are you looking to build with what kind of products? Do you want to buy in higher sale volumes to make larger profits? Will you store the items yourself or will you have a drop shipping business model?
1. Get Yourself Licensed
Always check your local laws regarding wholesale purchases and retail. You don’t want to have your business shut down without warning. Moreover, if you’re living in the United States, you’ll need a federal tax ID even if you want to buy your wholesale items online.
1. Use Online Directories to Find Suppliers
Scouting around online directories is one of your best bets when it comes to finding wholesale suppliers. They provide you with the tools you need to decide where you should buy your wholesale items.
1. Connect With Wholesale Suppliers
Always seek to find out as much about your potential wholesale supplier as possible. The business relationships you build should be based on trust. Don’t be afraid to ask for discounts or perks. You might even get a free sample before you commit yourself to a large order.
The Best Wholesale Items to Sell
There are a number of popular items that are inexpensive in wholesale and sell for a good retail price:
- Consumable items, or items that always have to be replaced. This includes socks, underwear, cosmetics, oil filters, printer ink, and so on.
- Niche products such as collectibles, hobby gear or vintage items.
- Items like coffee mugs, umbrellas and sunglasses are always easy to sell because everyone uses them.