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Wholesale Buying: Steps for Your Business

Whether you own a retail storeor a construction company, knowing where to get the most products/materials for a discounted rate can help you meet your business and financial goals. Wholesale buying is a widely used method that you can benefit from. Read further to learn more about wholesale buying, the potential benefits for your business, how you can participate in the wholesale buying process and additional information to help you navigate the process.

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What is wholesale buying?

Wholesale buying is the process by which retailers and commercial, industrial or professional businesses purchase goods for resale from wholesale companies. Wholesale can be defined as the process by which one party sells a large number of goods to a business at a low price. Once received, a business may raise the price of each individual good to maximize their profits.

Benefits of wholesale buying

Here are some potential benefits of wholesale buying,as mentioned by Direct Liquidation.

Allows for maximum profit thanks to discounted pricing

Because buying wholesale products means buying at a discounted price, you have the potential to maximize your profits from retail sales. This is because the discount you pay for wholesale products allows you to create a market price that entices the consumer without limiting your profitability.

Offers a diverse selection of products and materials in one place

Some wholesalers sell a variety of goods that allows you to order everything you need from one place. For example, a wholesale company that sells slabs of stone, wooden beams, plaster and building tools allows a construction company to purchase a variety of materials all at once and in one order.

Creates an opportunity to sell name-brands

Some name brands sell their products at a wholesale price to smaller retail businesses. Independent wholesalers may also have partnerships with name brand companies to sell their products to retailers at a discounted price. By having the option of selling name brand products within your business that customers already love, you potentially boost your business’s credibility by associating yourself with them.

Reduces shipping costs

In most cases, buying from wholesalers helps your company reduce its shipping costs. This is because ordering products in large pallets often makes them easier to ship than shipping in multiple small orders. On top of the discounted pricing, this can help you save money for your company in the initial buying phase.

Gives an edge against competitors

By selling name brands and receiving discounts on pricing, you elevate your business and potentially have an opportunity to sell those name brands at lower prices than major retailers.

How does wholesale buying work?

According to 3dcart, wholesale buying entails the following process.

1. Identify the types of products you need for your business

Think about the products or materials that you need to operate your business and satisfy your customers. If you own a cafe, you may identify your inventory needs as follows:

  • Premium coffee beans
  • Ceramic mugs, plates and bowls
  • Silver eating utensils
  • Takeout cups, containers and utensils
  • Paper straws and napkins
  • Food products

You can determine the types of wholesalers you need to look for to meet these needs.

2.Map out your stock space for inventory

Think about the amount of storage space you have for inventory items. This helps determine the number of items you can order each time and that your storage space and retail area can accommodate.

3. Create a price point (budget) to spend on inventory

Different wholesalers have varying price ranges for the same types of products. By establishing your target price point, you’ll narrow your choices while also making smart financial decisions.

4. Evaluate wholesalers that fit your criteria

Conduct a search to find wholesalers who sell the products you need at the price range that meets your budget. You may also want to seek reviews to determine if their service and product quality align with your criteria.

5. Contact representatives and establish needs

Typically, you find contact information on a wholesaler’s website. You will most likely be contacted by a sales representative who can tell you more about the company, the discounts they offer, shipping methods and partnership terms and conditions. You may be able to place an order through them during your phone or email communications, or you may gain access to their full website to order products from there.

7. Maintain a business professional relationship

Make sure you stay in contact with your wholesale partners to ensure their business in the future. Establishing a good foundation with wholesalers could potentially increase your chances of getting speedy delivery or priority over other orders.

Types of businesses that offer wholesale products

According to The Reseller Network, here are a few examples of the types of business and suppliers that typically wholesale products:

  • Wholesalers
  • Distributors
  • Dropshippers
  • Merchants/agents
  • Manufacturers
  • Vendors
  • Tradesmen
  • Importers
  • Exporters

Types of wholesale products

Wholesalers can sell a range of products depending on your needs. Here are a few examples of the types of products that are popular for wholesalers to sell, according to Chinabrands:

  • Toys
  • Books
  • Clothing and accessories
  • Electronics
  • Beauty products
  • Supplements
  • Child safety equipment
  • Pet supplies
  • Travel accessories

Frequently asked questions about wholesale buying

What is the best place to buy wholesale?

The best place to buy wholesale may depend on your purchasing needs. For example, a restaurant typically needs different wholesale products than a clothing boutique. Conduct an internet search to read reviews and make a list of the top wholesalers within your specific industry.

How do I find wholesale vendors?

You can find wholesale vendors either by conducting an internet search, or by looking at wholesale products and their quality at trade shows. These events, typically at least a few days, allow you to interact directly with owners or representatives in a booth-style set-up. Further, you may consider the following:

  • Ask manufacturers if they offer wholesale services to decrease costs and quicken the delivery process
  • Subscribe to a professional network to engage with wholesale suppliers
  • Visit online B2B marketplaces to connect with wholesale companies

Can a business be both a wholesaler and a retailer?

According to Shopify, businesses can act as both a wholesaler and retailer. They can sell bulk products to other companies at a reduced price and individual products to consumers at a market price. For instance, some popular clothing brands have a website/store locations where the public can shop with them directly, while they also wholesale their products to clothing retailers.

What is the difference between dropship and wholesale?

Dropshipping is when a retailer receives a request from a customer about a particular product/quantity of product. The retailer then contacts their wholesaler and has those products delivered directly from the wholesaler to the customer. Once the customer pays the retailer for their order, the retailer then pays the wholesaler at the discounted price and keeps the profits.

In contrast, wholesale is the process by which a retailer pays for products in bulk at a discounted price with the hope of selling to customers. Further, dropshipping is a great method for businesses with limited or no storage space as they can ship products directly from wholesalers to their customers.

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