Buying wholesale may seem like navigating a maze if you’re doing it for the first time. Where do you find wholesale suppliers? Is a license required to make wholesale purchases? What are the different types of wholesalers? In this post, we share some tips about buying wholesale in 2022 to help you better understand the wholesale buying process.
What is Wholesale Purchasing?
Wholesale purchasing occurs when a company purchases things in bulk at reduced rates and resells them at higher prices to customers or other businesses. Most companies work with wholesale distributors instead of approaching individual manufacturers directly to save time and trouble. You can find things like wholesale headphones at TechXpress.
What is Wholesale Pricing?
This is the price you pay to purchase goods from the manufacturer, wholesaler, or distributor. As you’re buying in bulk, you’ll be entitled to discounts – the larger your order, the bigger the discount you get. You may be tempted to buy a higher volume of goods since this means greater discounts. However, you have to be mindful of how you want to store the goods. Warehousing costs can be expensive so be sure to take that into account. After purchasing your goods at discounted prices, you can sell them at a higher price to generate profit. This is the retail price that your customers will be paying when they shop from you.
What Are the Benefits of Buying Wholesale?
The most important reason is you can decrease the cost-per-unit! Bulk purchases allow you to enjoy lower shipping prices. You’ll also make fewer purchases and further decrease shipping costs. Another advantage is having a wider selection of products. Say you own a luggage store. Working with a wholesale distributor that carries various luggage brands lets you offer different choices to your customers. No one product fits every customer so it’s always good to have varieties they can choose from. People are more likely to visit you than your competitor who carries only a few brands.
One more benefit of buying wholesale – you can easily scale up when your business expands. When you decide to open a new branch of your luggage store, you just need to make a bigger order with your distributor. Or, if a certain piece of luggage is popular and demand increases, the good relationships you have built with your distributors will help you to replenish your inventory quickly.
How Do You Find Wholesale Suppliers?
You’re eager to get the goods for your business but don’t rush into a purchase too quickly! You shouldn’t just talk to one supplier. Do your research, gather information from other friends in the industry, and hear what they have to say about suppliers they’ve worked with. You’ll know who to avoid and who you can approach. Also, compare quotes from different companies to make sure you find the best deals.
There are many ways to find prospective wholesale suppliers you can work with. The fastest way, of course, is through the internet. You’ll find many suppliers that offer an extensive catalog of products at wholesale prices that are 40% to 90% lower than retail prices. Once you’ve shortlisted a few potential suppliers to work with, simply drop them an email or give them a call to find out more.
Your local chamber of commerce is another great place to start. Approach them to see if they have any suitable contacts. Networking sessions organized by the commerce are also a good way to get in touch with suppliers.
Do You Need a License to Buy Wholesale?
It seems like anyone can buy products at wholesale prices and sell them to others, right? Well, not exactly. It depends. If you want to buy something wholesale for personal use, there’s no need for a license to do that in the U.S. However, if you want to buy products wholesale and resell them, you’ll need a wholesale license. Otherwise, you’ll be breaking the law! A wholesale license is a business document that permits you to lawfully purchase items in bulk and resell them. It indicates to the government, material suppliers, and merchants that you are a legitimate goods reseller. Your wholesale license might also help you save money on taxes in the long run.
Depending on which state you’re in, the laws might be different. Bear in mind to do the necessary research before you make a wholesale purchase.
What Are the Different Types of Wholesalers?
It’s important to know the differences between the types of wholesalers so you know who to work with for your business. Here are 3 major types of wholesalers:
- Retail wholesalers: They make bulk purchases at discounted prices from manufacturers as well as their distributor network and sell the products to retailers.
- Merchant wholesalers: They buy goods directly from the manufacturers and sell them to consumers and businesses.
- Manufacturers: They are at the beginning of the supply chain since they produce the things they sell.
So, which type of wholesaler should you purchase from? Here’s a tip: It’s recommended to buy from retail wholesalers and manufacturers. Why? Because merchant wholesalers are selling similar products to consumers hence you probably want to avoid the competition.
Find the Right Supplier for Your Business
Buying wholesale may be daunting at first but it’s a critical step to increasing profits and inventory. It’s definitely worthwhile to conduct your research and get in touch with different suppliers. This will help you determine which supplier can provide top-quality products and great prices. Also, remember to do a check on what are the licenses and documents you need before you buy goods in bulk and resell them.
Lastly, you don’t always have to agree to the first offer you receive. Look around, compare quotes from different suppliers and a better deal might come along. Or if a supplier you’re keen to work with doesn’t offer you an attractive price, let them know your budget and see if they can match it. Learning about the wholesale buying process may be challenging but it’ll be worth it when you find the best supplier for your business.