When it comes to buying wholesale for resale, there is a lot you should consider. To help guide you, read and keep these 11 tips in mind!
It’s impossible to open a store, stock it with products, and have customers roll in. If it were that simple, everyone would be doing it. Many factors create a successful retail business, like choose from over 826,000 wholesale companies in the United States alone.
We’ve created specific tips on what you need to know to buy wholesale for resale. Following these tips in the order below may help you track progress and stay organized during the process.
1. Understand the Purpose of a Wholesale Company
Wholesalers are like middlemen between your retail business and a manufacturer. They are a link in the chain between the manufacturer and your customers. Wholesale buyers purchase large quantities of products from the manufacturer at a discounted price. The wholesaler then marks up the price to meet their desired profit margins, then sells them to you.
The higher the quantity you buy, the less cost per item you pay. You get bulk pricing that allows you to mark the items up for resale to reach your desired profit margins.
2. Know Your Desired Profit Margins and Your Budget
Knowing your numbers prevents overstock issues, leftover products, and spending over budget. Profit margin is the difference in the amount you spent on the products and what you sold them to customers. Your budgeting strategy can help you determine how many products you need to buy to receive the highest margins.
3. Pick Your Target Customer
Who do you want to see walking through the doors of your boutique? Before you purchase products, you must understand your customer base. You want to think about your customer’s age, average income, location, gender, and trends within those groups. If you’re going to sell clothing to middle-aged, professional women, you don’t want to stock your store with prom dresses.
4. Pick the Right Products
Find out what your target customers want. Look on social media sites and see what’s trending with your customers. Start an online group for potential customers and ask them directly what they want to buy locally. While you’re asking questions, ask them what price ranges and brand names they prefer. Taking time to research your customers eliminates guessing.
5. Understand Your Storage Options
Ordering in bulk is great unless you don’t have a place to store all the products. Small boutiques are often limited in storage. Buying in bulk could create a bigger problem. Knowing how many products to display and store will help you feel confident when placing orders for products to wholesale for resale.
6. Choose the Best Point-of-Sale System
How you order products from a wholesale company affects the process of buying wholesale for resale. Here are some things you must be able to do quickly and efficiently:
- Centralize payment processing
- Track inventory
- Create sales and accounting reports
- Manage customer databases
- Accept different forms of payments
- Complete payroll
- Vendor management
- Easily connect with the wholesaler
Shopify, Paypal, Speed, Clover, and Lightspeed are a few examples of systems used by retailers.
7. Create a Marketing Plan
Today, marketing is vital for selling products, whether you have a brick-and-mortar store or sell exclusively online. You have to find creative ways to entice people to leave the comfort of their homes, where they can order products online while sitting on their couch, to visit your store.
Marketing plans should include email, social media, videos, advertisements, sales, and promotional events, blogs, and more.
8. Find Wholesale Companies
The first way to narrow your search for a wholesale company is by choosing one that sells the wholesale for resale products you want in your store. You can also narrow the search by deciding if you’re purchasing from local artisans or large companies. You will get the best deals from large companies. Choosing an online wholesale company makes your job a lot easier than traveling to trade shows to meet vendors.
9. Pick the Right Wholesaler
Now that you’ve found a handful of wholesale companies with potential, you can take extra steps to help you finalize your decision. Read online reviews of the company or reach out to current or past retailers who have worked with the wholesaler. Call customer service to see how you are treated. Contact a company representative to ask questions about the products, shipping, minimum orders, price points, and deadlines.
The right wholesale company will meet all or most of your product needs. Buying becomes much easier when you deal with fewer wholesalers. They also follow trends and offer a great variety of products. The one that meets your standards gets your business.
10. Place a Trial Order
Worthy wholesale companies offer small batch orders because they know small business owners don’t have the money or space to purchase large orders. Small batch ordering lets you buy a few wholesale items for resale to see how your customers respond to them. If they sell out right away, you can place a larger order the next time.
Trial orders also give you insight into the purchasing, billing, and receiving processes. It helps you see if the wholesale company is reliable.
11. Don’t Be Afraid to Negotiate
There may be times when wholesale companies are overstocked on products or want to move seasonal products. Negotiating for a better price or reduced shipping costs is never out of the question with the right wholesale company. The key to negotiations is to be fair and make sure the wholesaler can still make money.
Wholesale for Resale Success!
By implementing these tips for buying wholesale to resale, you are setting the foundation for success. You will also be building a solid foundation with a wholesale company. As your business grows, so will your relationship with your wholesale contacts. There are benefits to quality relationships, including insider information on trends and upcoming discounts.
Taking the proper steps at the beginning of the process can save you time and money in the long run. It prevents mistakes that can cut your profits. Do the hard work now, so you can sit back and enjoy the rewards later.