How to Buy Wholesale to Start a Retail Business? 3-Simple-Steps Guide
As a supplying business, transport goods or stores are part of your service to the customers; you might feel it is necessary to provide quality packaging solutions you can trust. With enormous arrays of product-packing in the market, it can pay to acknowledge that your business owns a constant source of everything that you need at the best affordable price.
As you might not know, most retailers do not create and sell their merchandise. Hence, where do they find sources for their products? That is the reason why wholesalers are jumping into the game. Wholesalers are not only a great source of merchandise but also support your business for a long-time running when your businesses grow. This can make them become the right partner in your success.
This article will show How To Buy Wholesale To Start A Retail Business: 3-Simple-Steps Guide.
Table of contents
- What is buying wholesale and Why you should do it
- How to buy wholesale products to resell with 3-steps-guide
- What to consider when buying wholesale?
- Best places to buy cheap wholesale products
What is buying wholesale and Why you should do it
Purchase wholesale and retails are two different things. As you purchase merchandise from wholesalers, you are going shopping from any middleman among your manufacturers and retail store. Wholesale purchases are made in bulk; therefore, you can pay discounted prices for your purchasing. You can also take those items and sell them at your store at higher prices. This higher price will be called the retail price, and customers, or end-users have to pay for that price if they buy at your store.
You can see the difference between the wholesale price and the retail price, which is called the margin. While the retail price can vary among businesses, there exists a variety of pricing strategies that can be made used to decide the best retail price. When you do this, you can easily decide on your gross profit.
For those who might not know, Gross Profit = Revenue - Cost of Goods Sold (COGS)
In the formula above, revenue will be equal to retail prices you are charging your customers. Hence, COGS is known as a high-level metric that covers all the variable costs linked to manufacturing and selling cargos. Also, fixed costs will not be accounted for in the calculation of gross profit. The benefit is simplicity. You can estimate COGS - the price you pay for product that you purchase from a wholesaler rather than manufacturing by yourself.
This means gross profit is the amount of money you can make off for sales. Retailers might raise the goods price they bought from wholesalers so that they can have profits. A perfect example is when you buy a T-shirt at a wholesale price of USD2 and then sell it at USD 10 in your store.
Take note that the prices you propose to your customers must be consistent with the market price. If not, you are running out of your chances since customers will not be choosing your products. Customers find it easy to look for alternative online stores. Prices are among the only ways that help you can stand out and gain customers’ loyalty.
Pricing is an element for wholesalers, and many will own a minimum of order requirements set before you do your business. Minimum orders are the minimum quantity of products that a retailer can buy from wholesalers to help support your business. Besides, minimums let wholesalers reach their profitability and their own revenue.
In brief, wholesale suppliers are generated to serve the trade. When different companies supply other businesses, wholesalers like Transpack purchase goods at low cost and high volume. That means the savings are passed into the business. Purchasing in bulk at the trading price is the most cost-effective method to source the products your business might need on regularly and make sure that you obtain your cargos from a trustworthy supplier.
How to buy wholesale products to resell with 3-steps-guide
Step 1: Find wholesale suppliers
How to find wholesalers
Looking for wholesale suppliers can appear to the difficult task; however, it can be completed if you know where and how to look. There is a fact that networking is known as one of the greatest ways to meet the business owners and work well should you acknowledge the events where retailers can gather too. You can search for industry events and trade shows that can happen in your area. Your local commerce chamber is always a perfect way for you to start with. In case you look for manufacturers or suppliers overseas, Alibaba is considered one of the most common online marketplaces with lots of manufacturers, wholesalers, and retailers.
Likewise, there remain lots of manufacturers on some sites like Esty and eBay. While these marketplaces can serve well for various kinds of audiences, there is an overlap, and they feature messaging platforms, then making it easier for people to keep in touch with suppliers in the world.
Keep in mind that not every wholesale supplier serves all markets. It is better to know whether your business matches the supply chance to help you come closer to the right suppliers. This can make it easy to opt for wholesalers to do business with them as well as save time for your searching.
How to choose wholesalers
As you are making decisions on what wholesalers you want to work with, you should take good care of your business. As you can see, wholesalers can become varied as well as specialized as the retailers so that opting for which wholesaler to cooperate with is challenging. In case you have not worked with any wholesalers before, you can be confusing when getting started. There are many things you had better remember as selecting wholesalers to work with to make the whole process less daunting:
What merchandise are you selling?
If you sell various products or if you intend to plan on keeping your businesses specific, you need to select wholesaler suppliers distributing what you need. You can choose how many wholesalers you want to make your store what you wish it to become. There is no limitation on the requirements. But, you have to make sure that merchandise that wholesalers give the aligns with the kind of your store you are running so that your brand can become consistent.
What is your price point?
The merchandise you are selling from your wholesale suppliers is whether it can bring money into your business. It means the amount of money you are spending will aid in deciding how you profit as you sell. As selecting suppliers, you have to ensure that you can get the affordable pricing that lets you reach your desired profit margins.
Are the wholesalers reliable?
This question is obvious; however, it is vital to say that you should not work with people you cannot depend on. Wholesalers delivering merchandise or consistently turn up with damaging goods are not suitable for your business.
Will their customer service meet your requirements?
You should make sure that any of the companies you are working with consists of reliable customer service teams you can reach when you need it. In case you are asked to jump through hoops to get your questions answered, or the customer service is not around as you need them, you may look for new wholesale partners.
How much do they know about products?
Your wholesaler partners should understand the products they are selling. This can not only share the information with your customers, but it also provides you with the opportunity to ensure that you know you are having partners standing by the performance and the quality of what they sell to you. Hence, wholesalers who cannot answer your questions of any specific products might be aware of their merchandise is not the best. Instead, a perfect business partner can answer your questions accurately and quickly.
Tips to find wholesale suppliers
Wholesalers are also businesses to purchase goods from suppliers or manufacturers, then selling them to another business. Wholesalers do not need to operate stores. Instead, they can supply your business with the inventory you are selling to the customers. No matter you are running eCommerce stores or brick and mortar businesses, wholesalers delivery plays such a crucial role in connecting store owners and manufacturers.
Working as a small business, you might have to with more than one wholesale supplier. However, looking for the right wholesalers to work with can be very tricky for you. You will have to find a wholesale supplier that:
Connects you with manufactures as well as items your own business needs
Includes affordable prices
Serves your geographic region
Be trustworthy and easy to cooperate with.
Before finding the right wholesale suppliers to work with, you have to have a clear idea of what your products you will sell. When you know what you are searching for, you can start looking for the right wholesale distributors to support your small businesses.
Here are some handy tips to help you find good wholesale suppliers:
1. Understand your industry’s distribution channels
There are several ways that an item can go from a manufacturer to a retailer. As you might not know, not every wholesaler is serving the same market. Getting better ideas of your own industry’s distribution channels, then supplying chain will aid you in finding the right and good wholesale distributors for your own online or retail business. Each industry is loaded with unique distribution channels that vary by region, country, and even products.
2. Try manufacturer first
Paying for wholesalers might put your profit at risk. To delete middlemen from equations, you can begin at the source.
If you sell branded products, you can go to the manufacturers directly. They can sell to you, relying on the minimum order requirements. In case your business is too small for them, or they sell through established distributors, you had better require a list of trustworthy distributors you can work with. Take note that the fewer middlemen you go through, the lower cost you will have, then allowing your business to become competitive in your marketplace.
3. Own a productive first contract with a wholesale supplier
To keep in touch with wholesale distributors, you can use the list you received from manufacturers, a wholesale directory, and phonebook listings. You might wish to find out:
Their minimum order requirements
Their wholesale unit prices
The supplying area
You are allowed to make your first contact by email and phone; then, you can follow up by mobile phone or phone should you need extra information or want to move ahead. To find the best match for your own business, you should be honest about what you are seeking.
4. Get specific in online searches
If you are doing online searches, you should not just search for the general distributors and wholesalers. However, you need to make sure to insert keywords from your niche and products. Let’s try the product’s title, brand names, and model numbers. Should any potential distributors you are following do not use phone numbers and email addresses, you can apply a WHOIS search to find out the site owners’ contact information. Take note that the more powerful wholesalers you find, the better you can compare shops, then getting a feel what the normal industry price is and receive the competitive quotes.
5. Seek for wholesale on eBay
As eBay focuses on retail consumers, the wholesale selections you find are suitable for low volume retailers. However, if you just begin, eBay can be an easy start; you have to spend more time on eCommerce. People selling directly to the customers on eBay likely have their business-to-business side of the business. You can find it easy to make contact with them on eBay to see if that is a case or not.
6. Check major B2B marketplaces
Many big B2B markets online are now available to help you purchase many items at meager prices. Alibaba.com is known as one of the biggest B2B marketplaces of the manufacturers, wholesale distributors, and importers. Another B2B marketplace might have:
Buyer Zone (USA)
Global Sources (USA)
E.C. Plaza (Korea)
Busy Trade (Hong Kong)
You can search for marketplaces serving your region or country. Also, there remain industry-specific B2B marketplaces, and they serve a single country and global retailers populations.
7. Take part in industry groups, forums, and professional networks
Taking part in online forums can be a good source of free information as well as support other people with experience in your industry and market. You can develop your own Linkedin profile, then subscribe to the industry newsletters, and take part in your chamber of commerce or the small business networking groups to help build up your professional connections.
8. Subscribe to your industry’s trade publications
As you can see, trade magazines are also free of information about relationships and businesses in your industry. Each advertiser in the magazine is a product distributor and manufacturer reaching to you. Besides magazines, subscribe to some online blogs or newsletters. Those are the best way to catch up with daily or weekly industry updates and news.
9. Join a trade show
Trade shows are among the most promising ways to develop, then growing your own business. Those events are tailored for any retailers to help manufacturers and distributors get connected. Trade shows enable you to meet as well as speak with many manufacturers and wholesalers in one day. Those face-to-face conversations will help avoid misinformation or difficulties in communication, such as getting people contacted online.
10. Making mistakes is not a big problem
Your initial wholesale suppliers might not become your vendor to work within the long-term. Generating your perfect supplying chain is known as an evolution getting involved in lots of trials, along with error. Your first purpose is to try to ship out products. After that, you can enhance your bottom line by striving for another wholesale distributor when you keep building and let your business grows continuously.
Step 2: Purchase products from wholesale suppliers
Wholesale businesses are known as volume-based. Their requirement to get a large number of products sold at a quick pace means low prices and more savings. There are, in fact, many chances to purchase everything at the wholesale price so that getting started will become much easier. Whenever the contact list of sellers starts to rise, you can find successful reselling wholesale products.
1. Choose items to purchase fitting your needs
If you really need specific products for you at wholesale prices, then your choice becomes much easier. In case you wish to get a product resold, you have to think of what you can store as well as sell. As starting, you should stick to some products you know very well. Chances appear when you have an easy time getting what you need and sell the products for a good value unless you want to keep it.
For example, you tend to purchase beauty items at wholesale prices before selling them to customers. You can start with laptops rather than beauty products if you have a good knowledge of computers more than beauty items.
2. Compare prices from different sellers
It is better to look at more than one seller if you want to find out products to purchase. You can find the same items at various places for even less money. This is since the price will increase for each broker handling the merchandise. Taking products from their own source will help you save a large amount of money.
Manufacturers are selling at a very low price. They own regional distributors selling items in certain areas. Wholesale businesses usually purchase from their distributors, then selling to retailers.
You will hear of brokers or jobbers. They are wholesalers selling items to businesses in small areas. You can get a better price by talking to their distributors.
You also need to consider branching out to the same items. Should a kind of laptop is expensive to buy; you might need to find different brands.
3. Require discounts and other perks from wholesale distributors
As for deciding to buy, let’s ask for discounts from sellers. Sometimes, you can find out amazing products at discounted prices. Sometimes, you can save money since suppliers can compete for your business and try to turn you into their repeated customers.
Sign up for the newsletters and email lists. Closeout, liquidation, and discount offers are listed there very often.
You can have better luck when asking for some discounts after setting several orders with the same suppliers. But, you might find out good deals for your new customers.
4. Choose an inexpensive way to get items shipped to you
If you tend to look for a way to ship out products from suppliers, you can stick to a trusted name in the field of freight business. One of the cheapest ways to get shipments is by lands through trains and trucks. Sea freight is considered an affordable but slow way to bring about larget shipments overseas; meanwhile, air transportation is the fastest but the most expensive way.
To find a trustworthy freight name, you had better researched this company’s reputation online first. Then, you can use some sites like the Better Business Bureau in America and ask other wholesale shoppers what kind of shipment companies they are using.
Shipping costs rely on how far you are from suppliers. You might end up paying less if you find suppliers in your own area.
Also, you can to opt for how fast you might need to get products delivered. Fast shipping can cost you big money. Sellers will be able to get the deal finalized.
If you do not place big orders, your items will end up in trucks with other products. Then, the shipping costs will be split by everyone placing orders.
5. View the return policy before setting an order
When most wholesale merchandise is sold out, you have to clarify sellers’ return policy. Let’s ask them if you are unsure. You have to make sure that you can understand the order cost, along with the whole processing, with shipment times. You also need to know all this so that you can get the product returned and get the cost recouped.
In case you think offers are not good enough, let’s negotiate. Suppliers will improve their return policies many times or lower the overall cost, typically if you can get better deals somewhere else.
Step 3: Start your wholesale buying business
1. Get business licenses if you plan on reselling wholesale items
In every area, you have to have your business license and valid tax IDs before buying wholesale items. To apply for licenses, you can talk to your government’s licensing board. Besides, you will have to fill out applications to explain your business, like what you are purchasing; followed by your plans to help resell products to other customers.
You are able to apply through your government’s site. Some organizations, including the Small Business Administration in the United States, can support you this.]
Regarding tax purposes, you can get a federal employee ID number. You are allowed to perform this by getting your business registered with your government’s tax department. For instance, you can visit the IRS website, in case you are in the U.S., then filling out forms describing what your business is specializing in.
Should you buy wholesale products for your own, you do not need a license. You might also be fine without licenses in case you don’t purchase lots of products or sell them very often.
2. Apply for a resale certificate with your government to avoid taxes.
Let’s drop by your government’s licensing board, along with their sites to begin your application. Besides, you need to supply your tax I.D., business license, and business description. With resale certificates, you can avoid paying for sales taxes. All you need to do is showing the certificate to sellers.
Without certificates, you can pay the sales tax as buying wholesale items. In case you have licenses, your own customer will need to pay the sales tax as they can purchase the items from you.
Like with business licenses, you don’t have to need a resale certificate if you do not plan on reselling wholesale items. Should you plan on running a business, then getting a certificate will help save you money.
3. Find a place to store what you buy
Buying wholesale goods can occupy lots of space. If you are planning on reselling merchandise, along with making frequent purchases, you might soon find you overwhelmed. Let’s clear out some space in your home, like in your attic or basement, so that you can keep the products.
Several items might not sell right away. You can count on having enough space to get items stored for a few months at a time.
Many professional resellers will rent out storage warehouses. Hence, you can find out some empty storage buildings in your own area.
4. Start off with sample units until you want to buy more of a product
You can ask your source for sample order or just order a small number of the products.
You should stick to small quantities, which is useful unless you have lots of extra cash or storage space; however, you have to remember that wholesaling is regarded as a volume-based business.
Should an item sell such as hotcakes, you can buy more of it easily. If it is sold poorly, you will not be stuck with lots of costly junk.
5. Order items in higher quantities to save money
In wholesale, the volume plays an important role. Companies can give you lower prices as you purchase units in bulk. Lots of commercial wholesale businesses are known as “volume-centric,” then making money by purchasing lots of items will be quick at reduced prices. There are several manufacturers as well as distributors who will not sell to you if you don’t order a specific amount of their own product.
You can balance your own supply, along with physical needs with the inventory constraints. For instance, a deal on 2,000 computer laptops will not do you much good should you have no place to help them store.
Large bulk wholesalers will maintain purchase minimums, like asking you to get orders placed over $5,000 USD. Those kinds of purchases can work well for retail stores.
Light bulk wholesalers can operate in small quantities, like by selling an item or by accepting orders that are less than $500. Working with those sorts of sellers is very helpful as you are just a beginner.
6. Require an itemized list of what is on the pallet or truckload
A listing describes the goods, quantity, approximate retail value (ARV), and item number that are assigned by the manufacturer or retailer. This information is helpful for you to recordkeeping and research items.
Inform the seller you would like an itemized listing as you are placing your own orders. Furthermore, let’s ask the shipping service for their records.
You can find out this information by entering a product’s UPC barcode number online.
7. Inspect shipments to make sure you received what you have paid for
Kindly take your time to check the merchandise as soon as you get it. You can make use of the manifest, in case you request it, as guidance. You need to make sure that you received the full order and the merchandise is not damaged. Sometimes, miscommunications can happen, so you should stay vigilant to avoid any nasty surprises.
The return policy is this time important in case you have not received what you want. You can read it carefully before agreeing to place an order.
You are able to research your sources online to help find out reviews from another buyer. In case you feel unsure about a source, you can ask other wholesalers for their choices.
If you cannot return orders or get back your money, you will surely know how to avoid purchasing from this source in the upcoming time.
What to consider when buying wholesale?
Currently, you already know that before deciding to choose to work with what kind of wholesalers, you should consider some factors. Of course, pricing is among those factors, but it is not enough. You also need to consider how your items you will purchase from your wholesalers or when you buy for your business; you have to think of buying products in bulk. Hence, in case you are not buying various products at once, you might overestimate how much you are buying and have much merchandise than you think of.
That is the reason why organizations are important. Owning a storage room, along with adequate shelving, will make looking for different parts of the inventory easier. Keeping those things labeled will ensure that you do not lose track of anything. You had better make plans and prepare your budget on how much money you can plan to spend.
Bear in mind that your budget you are spending on merchandise and stick to it means the price can be negotiated if necessary. You need to know the value of what you really want to purchase and get a price point you are ready to pay using your own researched knowledge of products. Figuring out the way to purchase wholesaler merchandise is known as one of the most necessary steps in finding out how much you can make each sale.
One of your main considerations is centering the price when you begin your wholesale for your business. Let’s keep accurate records, then reviewing them frequently to get your costs and the prices you plan to sell your items tracked. Stability only exists as average prices are definitely constant over time, or as they are increasing at a low and predictable rate. The retail price of a product is known as the cost as it is totally sold to the buyer for the consumption and not for reselling through any third-party distribution channels. Costs are a priority of concern; meanwhile, there remain other items you might need to consider too.
Take a closer look at the leasing space for the goods selling to your consumers. Regarding business, retailers will have an overall goal, which is selling merchandise and hopefully, at a profit. That is why they are concentrating on sales floor space, a whole image that draws in consumers, and adequate parking for them. You can think of your times of operation for your business. Since it is the time for the operation, the retail store is widely open to the public for goods purchasing.
2. Shipping Options
Shipping is known as the cost to the customers when items are delivered. Basically, retail outlets will be shipped by UPS, FedEx, and USPS. The cost might vary by production size, location, and how fast the customers want their delivery. Several upscale boutiques will messenger goods.
3. Customer Payment and Conditions
Let’s take a look at how convenient your own payment system will be and in case you ask for a policy for processing refunds as well as returns. In addition, you should think of any terms you might set for higher-priced products like lay-away. Those plans had better be clear to your consumers as they are to you.
4. Customer Service
No two retail stores own identical customer service. In order to offer amazing customer service, you might need to take the desired item into the customer’s hand, then giving them the tools they really need to make them decide to buy quickly and allow them to do without effort.
5. Handling Returned Merchandise
There are returned goods that will be resold by a similar retailer for the full cost, however, many will not. You can try to avoid returns in the first place by performing everything you are able to ensure the customer is totally satisfied.
Best places to buy cheap wholesale products
There emerge many Ecommerce websites nowadays. Here are some best places for you to help buy cheap wholesale products.
Alibaba was established in 1999 and it is now a big household name, not only in China but also in other countries. Its platform aims to bring millions of business owners selling and purchasing items together. Companies are encouraged by seeing around a world where their business can be flawlessly completed at any place. To have this in place, Alibaba will prepare several tools allowing suppliers to meet the audience’s requirements and for buyers to help them meet the targeted suppliers.
The general outcome is a mutual gain for the buyer and supplier. All the products you require will be found. It will qualify to become the one-stop-shop for all wholesale needs. This is since those websites boast more than 40 categories of products. Basically, the platform has witnessed massive success with more than 190 countries bringing together to do their business.
This platform has been bringing the world outside the abilities where with just some clicks from your smartphone or PC, you can own the items you really need to be shipped right to the warehouse.
Chinabrands is known as one of the leading global dropshipping wholesalers from China. They own their global reach servicing consumers in over 200 countries.
As you can see, Chinnabrands provide you with full catalogs, consisting of cheap bags, clothes, shoes, accessories, jewelry, lace wigs, 3C products, beauty, household necessities, and more than the total of over 500,000+ SKU. Also, new and trendy arrivals will be added daily.
Chinabrands can provide you with additional valuable services, including SEO-optimized product descriptions. You can also download as well as upload to online stores such as eBay, Amazon, or other online shopping platforms. This will help you save much time to write your product descriptions, then improving your stores rank.
Besides, it is also loaded with professional teams to select trendy items that will sell effectively. Most store owners might be crazy and own no idea which kind of items should be sold. Chianbrands’s team will do the market search, then adding those data-proved hot sell to their site frequently.
This might have poor quality issues, unlike Alibaba, which is known as a third-party platform for thousands of suppliers and manufacturers. Chinabrands already has highly trained Q.C. teams to ensure the quality of products produced by main brand suppliers.
DHgate.com is regarded as one of the most sought-after sites to purchase cheap items for resale. It gives you over 30 million products in virtually all of the categories you wish for. No matter it is beauty products, computers, or toys, you can purchase them. There is only one good thing with DHgate.com is that products are known as ideal and cheap for reselling.
In fact, some might have a whopping 50% off. The payment process is effective and you do not really have an opportunity to lose the money. In many cases, even though products you are ordering can be faulty, there is also an option for a free refund and return of the money. You can feel no worries about the deliveries since they do it quickly. The items can be tracked when you order so that you can know the shipping status.
As with your personal details, they might be kept safe by this site and only used for your interest. There are no chances for third parties.
Kole Imports is another site that provides you with cheap wholesale products. The company exports its items to over 100 countries globally. To be consistent in this promise, they might first have to get products imported. And they can do importing only from the top manufacturers.
For this reason, they have been working with reputable manufacturers to source what the high quality is. This partnering also makes sure that they can get their items cheaply to shift the same advantages to you. They also get better ideas that you are buying items to resell and then giving you amazing deals. The whole process of setting an order is completely flawless.
Hence, all you have to do now is that the company will do the delivery to you. And when you get an order placed, they will immediately package and ship. No matter what quantity you are ordering, you will receive them. Any product you need will be given and even pharmaceuticals.
5. Wholesale Central
Wholesale Central is known as a directory for any business to the business connection. It is the platform where suppliers can meet their buyers, and where buyers can meet sellers. This directory will not enable you to help source customer products. Rather than that, they provide wholesale products only. When you visit the website, known as a buyer, you will help search for suppliers who are selling products you will be looking for.
When you identify the one you like, you can click to visit their website and place an order. This will help you complete your business with the sole suppliers who can propose you the deals you want. This is since you are a buyer, you can store all the information from the suppliers to help you choose the ones exciting you. It is trusted that Forbes once already highlighted Wholesale Central among the best B2B directories.
6. The Wholesaler UK
As you might not know about, the Wholesaler UK is another site that has been placing itself a place at the top of the world of e-commerce. The Wholesaler UK was established in 1999, and it tends to celebrate its 20th birthday in the huge industry. Besides, its presence is in the industry long enough to find out exactly what you need. And then, they can provide you with the solution.
The Wholesaler UK will help you connect with your own suppliers who are selling cheap wholesale items for you to resell. There is a fact that you are about to resell those products. This means that you had better sell them at very affordable prices. You are ensured to meet a supplier selling any product that you really need, even if you ask for in huge quantities, you will receive that.
You can feel no worries about the quality since it is quite is impeccable. It is the work of the directory to ensure that those suppliers you are associated with are reselling genuine items.
We hope that with our complete guide on how to buy wholesale to start a retail business with three simple steps guides, you can complete your mission. Don’t get so discouraged this time since it might take some time to research some vendor negotiations to find out the best merchandise to help sell in your retail store. If you find this article helpful, kindly help us share on your social media.