With the spread of COVID-19 and many shoppers preferring to buy online, e-commerce is booming. Some used this trend to their advantage and claimed a piece of the market by launching new business ventures. Working with suppliers to buy wholesale items and sell them online for cash is a lucrative business opportunity. And, with many more people already working from home, it has become a popular way to generate a secondary income. If this sounds like your kind of gig, here’s what you need to know about buying and selling wholesale.
What Is Buying Wholesale?
Whether you are opening a brick-and-mortar shop or an online store, you need inventory. When shopping for items to resell, you can either buy retail or wholesale. However, if you buy wholesale, you cut out the middleman to buy items directly from the source. It will save you a ton of money and boost your profit margins since you purchase items from the manufacturer and bypass stores completely.
The driving factor to buy wholesale is because when you buy in bulk, you receive a discounted rate. Then, you can then sell the items in your own store for a higher price. The lower the cost of your merchandise, the greater the profit margin will be when you buy wholesale items and sell them online.
Tips for Buying Wholesale Items to Sell Online
If you have a fledgling retail business, here are some tips from the experts to help you get started.
1. Find Your Niche.
First and foremost, you will need to find your niche. Ecommerce sites and marketplaces are oversaturated since people can literally buy and sell anything online. The oversupply and overabundance of competition mean you need to have a targeted strategy. To do this, you should look for a niche market that is undersupplied, and focus advertising on these demographics.
Not every idea is a winner, so it could take a few attempts to find the right market or get your business off the ground. Then, once you start attracting customers, you will need to decide if you want to continue to fill a single niche or build a portfolio around it with related products and services.
2. Buy in Bulk.
Anyone who knows how to live on a budget will tell you to buy in bulk. Even if you are only grocery shopping for your household, it can save you a ton of money. So, if you are shopping for inventory, buying items by the pallet gets you a lower price per unit which improves your profit margin. Although, be careful that you don’t buy things just because they’re cheap. If you fall prey to buying discounted junk, then you’ll be stuck with merchandise you can’t move. Therefore, you want to be very selective when choosing to buy wholesale items and sell them online.
3. Look for the Right Supplier.
The quality of your products and the relationship with your suppliers could make or break a fledgling business venture. So, you will need to find a supplier that has high-quality items at the lowest possible price.
The first option is to find wholesale suppliers. Although their increasing prices make it harder to earn a profit, you can still find good deals if you know where to look. And, wholesalers are willing to be more flexible with long-term clients when it comes to terms of payment, offering better prices, and providing more shipping options.
Liquidation companies are another source for low-cost items. Since they typically deal with customer returns, overstock, and refurbished items, they can sell merchandise below the wholesale cost. However, they enforce strict rules for the quality of their products. Furthermore, they often partner deals with large retailers like Amazon, Target, and Walmart. So, they can pass the savings and quality items on to you.
Before entering into any contracts, be sure to research who you plan to do business with. You will need a supplier who is reliable, knowledgeable, and has good customer service. Check for online reviews to see what kind of reputation they have in the small business community.
4. Be Patient When Selling Off Your Stock.
Nothing worth having comes easy. So remember, it may take some time and patience before you see a return on your investment. Rarely is any new business an instant success. You must build up your customer base and know your market.
Another common mistake you want to avoid is undercutting your sales and your competitors. Setting your prices too low could backfire and affect your profit margins. Not only might potential customers suspect it’s a scam, but they may also doubt the quality of your products. Therefore, make sure to do market research and set a competitive price point.
5. Create a Marketing Campaign.
Once you find your niche and get your supplies, it’s time to get to work. Create a marketing campaign tailored to your demographic. And, look for new and creative ways to reach your audience. Take advantage of free advertising by creating a social media presence and look for new channels to bring in customers.
Don’t forget more traditional approaches as well, such as taking out ads in local papers and circulars. It never hurts to post flyers advertising your products at venues your demographic frequents either. Seasonal sales and incentives also grab people’s attention and clear out your stock so you can buy new merchandise.
Where Can You Find Wholesale Items to Sell Online?
Wholesalers
If you are looking for wholesalers near you, your city’s chamber of commerce can provide a list of local businesses. Also, try networking among local business owners who can provide references and reviews. There are plenty of domestic suppliers advertising on sites like Etsy and eBay. However, Alibaba is a popular marketplace if you want to work with international manufacturers, wholesalers, and retailers.
Liquidations Companies
For those looking for liquidation companies, a Google search will bring up a lengthy list of sites that connect you with companies that are going out of business and selling their stock. Many links are sponsored advertisers, but these are currently the highest-rated liquidation sites.
Paid Services
However, you can cut down your search time with paid services like SaleHoo that will do it for you. They identify which suppliers best suit your needs and have more than 8,000 verified wholesalers, manufacturers, and shipdroppers in their network.
Finding the right products and suppliers is an important step towards increasing your profits. You should never choose products based on personal preferences or make decisions because of emotional attachments. Think of who you are selling to and only buy items that appeal to them.
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Jenny Smedra is an avid world traveler, ESL teacher, former archaeologist, and freelance writer. Choosing a life abroad had strengthened her commitment to finding ways to bring people together across language and cultural barriers. While most of her time is dedicated to either working with children, she also enjoys good friends, good food, and new adventures.
