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Buying in bulk for resale can be a smart strategy for entrepreneurs looking to increase their profit margins. Whether you're running an online store or selling products at a physical location, purchasing items in large quantities can help you save money and boost your revenue. However, buying in bulk requires careful planning and consideration to ensure that you're making a profitable investment. In this article, we'll explore some of the essential things you should know when buying in bulk for resale, including finding reliable suppliers, understanding pricing and logistics, and assessing market demand for your products.
Why should you buy in bulk
There are several reasons why people choose to buy in bulk. For B2C buyers looking for great deals on household supplies such as groceries, snacks, or other bulk foods to stock their pantry with, sustainable shopping and low prices are prime reasons.
But from a B2B viewpoint, there are even more reasons to buy wholesale, apart from finding ridiculously low prices on bulk foods.
- Cost saving: Discounts and better deals on larger quantities: Buying in bulk allows businesses to purchase products at a discounted rate, as suppliers often provide better deals for larger quantities of products. For example, a supplier may offer a 10% discount for orders of 100 units or more.
- Increases profitability: Purchasing input products at wholesale prices: Buying in bulk enables businesses to purchase input products at wholesale prices, which can result in higher profit margins on subsequent sales. For example, a clothing manufacturer can purchase fabrics in bulk at a lower cost and increase their profit margins on finished products.
- Provides great stock: For buyers that have decided to start a trading or business or want to engage in dropshipping, bulk buying offers excellent sourcing opportunities. Remember, buying goods for cheap does not necessarily mean that you’re getting low product quality. Once you find a seller with great products and even better prices, you can enjoy a steady flow of high-quality, low price goods.
- Room to scale at will: Lastly, due to the convenience it promises, bulk purchases can be an excellent catalyst for growth. If your business is at the stage where frequent growth spurts are happening, having a trusted bulk supplier will help you cope with increased demand.
Select the right wholesalers for your business
Although bulk buying can create a massive advantage for your business, picking the wrong supplier can wipe off those gains easily. A lot depends on finding the right supplier, including product quality, shipping, and the ease of the whole process.
Reliability - One of the most important factors to consider when buying in bulk for resale is the reliability of the seller. A reliable seller ensures that the products received are of good quality, delivered on time, and at a fair price. It's essential to check the seller's reputation by reading reviews and checking their background before making a purchase. One way to do this is by sourcing from established marketplaces like Amazon, eBay, or Alibaba, where sellers are required to meet certain standards and undergo verification processes. Alternatively, you can ask for referrals from other buyers who have dealt with the seller in the past. By taking the time to assess the reliability of the seller, you can make an informed decision and minimize the risk of any potential issues with your bulk purchase.
Review - Reviews are an indication of what previous customers think about the supplier’s performance. This helps you understand whether they have good customer service, know about the product, deliver on time, provide great shipping terms, or any other information you need to know.
Flexibility - While competitive prices are a huge factor in selecting a bulk supplier, flexibility is arguably more important. A supplier may advertise high prices initially, but if they’re flexible, you could potentially get lower prices, in addition to other perks such as flexible minimum orders, payment terms, etc.
Consider when buying in bulk
Now that you know how to find great wholesale suppliers let’s turn to tips that can help you buy successfully. Bulk buying is an art in itself, meaning you need to know the right strategies to make the most of the process. Here are a few tips that can help:
Contact the manufacturer: First, you need to know that the supplier may not always be the manufacturer. Thousands of businesses are listed on Alibaba.com, including manufacturers, wholesalers, and bulk suppliers. Sometimes it pays to contact the manufacturer directly instead of a wholesale distributor. With the manufacturer, you’re more likely to access the lowest prices possible. If they don’t handle sales, they will inform you and direct you to a wholesaler who can help.
Don’t be afraid to negotiate: The typical B2B buying process involves a lot of back and forth between buyer and seller. When you’re buying thousands of units of one product, you have more than enough leverage to ask for what you want. Suppliers also know that you’re making a big commitment, so they will be willing to bend in areas you don’t expect.
Get a sample first: It is essential to be absolutely sure that the products you are contemplating are right for your business. Requesting for and receiving a sample upfront helps you confirm this at almost no cost. With a sample in hand, you can be sure that you’re buying suitable goods that have a long shelf life.
Keep a close eye on shipping: There are various shipping options you can use to transport your products to your destination. Standard options include ocean freight and air freight. But depending on the size of the wholesale lot you’re buying, the option you pick can improve your profit margin or wipe out your gains. Ocean shipping is typically cheaper for a wholesale lot of relatively heavy goods. But air freight can make more sense if you’re purchasing lighter goods in large quantities.
Prepare sufficient storage: Finally, bulk buying implies that you have a secure place to store the products before sale or use. If you do not have adequate bulk stores, then there’s a risk your inventory will be damaged, or you may end up paying more to find proper storage.
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