Buying from a wholesaler may seem relatively easy but it does come with a caveat. If you are not strategic and wise in the process of buying from a wholesaler, you can end up losing money on the business instead of earning a profit. How to buy from a wholesaler entails knowing the steps and applying them based on the type of business model that you have.
Ways on How to Buy from a Wholesaler
Understand the business model
You have to realize where you stand in the product movement of the industry. Since you are asking how to buy from a wholesaler, you are most probably a retailer. Retailers buy items from wholesalers. You buy products from a middle man. Wholesalers are the ones who deal with manufacturers while you are the business owners who go into contracts with wholesalers.
Knowing your part of the product flow will give you two aspects of the business. On one side, you will have to set up a price that is higher than the manufacturing cost. And you also have to consider the cost that wholesalers incur throughout their part of the product movement. You will definitely spend more than the wholesaler and the manufacturer.
Another aspect of the business that can be good for you as a retailer is setting the price for your products. Because you are the one dealing directly with consumers, you can dictate the product price based on the demand.
Check the market
You should look at the market and analyze the current price for the products that you will sell. It is easy to know this information. You can go to your local market and check to see the average product prices. You can also check online shops to know more information about brands and prices.
Take note of two details when you do your research. Make sure that you look at data that caters to the same market that you are targeting. If you want to sell products in a specific country, research the prices that are local to this area. If you are aiming to sell globally, it is best to have an average price common to the most popular online stores around the world.
Pick the right wholesaler
The best wholesaler is basically that one that can offer the highest quality product at a competitive price. This does not necessarily mean that you should buy locally. The international market is open to resellers and retailers. And these online shops can provide the lowest prices because manufacturers are also located in their country.
Know which type of wholesaler can give you the best price. You can go directly to manufacturers that also act as wholesalers. You can ask retail wholesalers that cater to retailers only. You may also ask for price quotations from merchant wholesalers. They are the ones that sell products to retailers and end customers.
One of the most convenient places to look for products is the business-to-business wholesale stores. The prices listed on their websites are wholesaler prices. You can gain profits of 30 to 100 percent depending on the demand for the products that you sell.
Combine and analyze your data
Ultimately, choosing the right wholesaler lies in the amount of profit and the convenience that you get from dealing with wholesalers. The decision that you make will be based on the quality of service that the wholesaler provides, the guarantee of delivery, and the price point that the wholesaler offers to retailers.
Knowing how to buy from a wholesaler is one of the key factors that can affect the success of any business. The initial steps that you take in the first year of your store will determine the direction of the next three to five years in the industry. Make sure that you do the necessary research to identify the sections in the industry and make definite connections and partnerships.