To ease things up for you, we&#;ve put together the most important questions to ask your wholesaler .
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If you&#;re a newcomer to buying wholesale , chances are you neither have an idea where to start looking nor know what criteria to have in mind when the time comes to make a choice.
However, not all wholesalers contribute to these satisfying numbers. Therefore, it&#;s important to bear in mind a few things instead of jumping headfirst.
You can only imagine the number of sales made on a global level.
As reported by Statista , the US wholesaler sales have reached an estimated amount of around 670 billion USD with an increase of around 10 billion USD within one year .
The reasons behind this preference are numerous, but we won&#;t go into detail since the sales numbers can speak for themselves.
It&#;s no secret that wholesale is classified as one of the most preferred supplying methods among others, such as dropshipping .
How long have you been offering wholesale services?
The best way to verify that the supplier you&#;ve chosen to collaborate with is reliable and sells genuine wholesale products is to find out as much information as possible regarding their experience and work history.
Wholesalers who have secured a network of loyal clients and have been on the market for some time are certain to be more trustworthy and provide you with better wholesale service.
Of course, you can always do a full investigation by yourself by:
- looking at their website
- browsing the company&#;s name on Google
- reading reviews on Trustpilot.
However, it&#;s even better to ask them directly as they may share details that haven&#;t been published online which could end up being decisive information.
What merchandise do you sell?
Understanding the merchandise your wholesale supplier offers is crucial for aligning their inventory with your store&#;s needs.
When selecting a supplier, ask for a comprehensive list or catalog of the products available. This list should include detailed information like product categories, materials, sizes, and variations.
For instance, if your niche is high-end fashion, you&#;d want to know whether the supplier provides a consistent supply of luxury clothing, accessories, or footwear, and if they carry premium brands or focus on unbranded items.
Additionally, inquire about new product launches or seasonal collections to ensure your store can keep up with market trends.
Don&#;t forget to ask about quality control measures and how they ensure the merchandise is free of defects.
How do orders work?
Understanding the supplier&#;s ordering process is vital to maintaining efficient operations and meeting customer expectations.
Begin by asking if there is a need to create an account on the supplier&#;s platform. If so, this may require you to provide some business details, such as your name, number, address, business name, business permit, or business registration number.
Once your account is verified, you&#;ll probably gain access to their wholesale catalog, where you can browse the full range of products available.
in most cases, you can put products you want to order in your shopping cart and finalize your order by paying with card.
How often do you update your inventory with new products?
Besides making sure the supplier has sufficient experience, store owners should prioritize finding vendors for your business that offer new clothing arrivals on a regular basis.
For every store out there, the main source of success comes from keeping customers content which is best done when providing them constantly with the latest products.
This recurrent update on items will continuously draw their attention, making them keep coming back to your shop and eventually turning them into a regular clientele.
Do you offer diverse products?
It goes without saying that product diversity plays a crucial role in retaining customers and preventing them from checking out competitors&#; stores.
That&#;s why in your search for the finest wholesaler you should never forget to ask potential suppliers about the variety of products they have at your disposal and estimate if that amount would satisfy your customers&#; needs.
Therefore, don&#;t rush into choosing a supplier before confirming that they offer a wide-ranging portfolio of brands and products that&#;ll not only bring you happy and loyal customers but also assure you notable revenue growth.
If you are getting into the fashion industry, make certain your supplier of choice covers enough categories of winning products for both men and women to be able to meet shopping enthusiasts&#; expectations.
Are the products you&#;re offering authentic?
In case your niche consists of selling high-end fashion products, it&#;s of the utmost importance to verify their authenticity as there are many suppliers offering knock-off items that you may end up purchasing without realizing they&#;re counterfeit goods.
So, when browsing for wholesalers of luxury brands, remember to look for suppliers that stand behind their products&#; authenticity and would stock your store with genuine brands.
Could you provide me with a product catalog?
The product catalog is every wholesaler&#;s most significant part of their website, giving prospective customers a sneak peek into their inventory, enough to make a general evaluation of the items they&#;re selling.
However, many business owners may stumble upon wholesalers that offer an extremely limited preview of their catalog, making the rest of the products available only after one decides to use their services.
So, try to avoid these suppliers and stick with those who give clients access to check out their merchandise by registering for free like BrandsGateway and their catalog of the latest trending clothing items.
Is there a minimum order quantity?
The minimum order quantity can vary tremendously from one wholesaler to another but it mostly depends on the type of products being sold.
For instance, expensive products usually have a higher MOQ than those sold at cheaper prices because they&#;re high-quality authentic products that are obtained from authorized entities.
Thus, it&#;s best when clients are informed upfront about the MOQ in order to be able to calculate in advance their order expenses and see if they can fit them into their budget.
Where is the merchandise sourced from?
The location where the supplier&#;s merchandise is produced can say a lot about the quality of the products.
Although many suppliers source their goods from authorized vendors and then sell them to retailers, outlet owners, or eCommerce stores, an even bigger number source them from unreliable manufacturers, some of which are known to have significant disadvantages such as the cons of Chinese suppliers.
Because of that, it&#;s highly recommended to check where your wholesale supplier sources their merchandise from prior to buying a poor-quality bulk of items.
Where are your warehouses located?
The whereabouts of your potential wholesaler&#;s warehouses are another thing clients should take into consideration, especially because it can greatly affect the delivery time.
In addition to the price paid when purchasing the products, the buyer is also required to cover custom duties for exporting and importing merchandise from one country to another.
That being the case, try to opt for a wholesaler who has warehouses in several places around the world, such as BrandsGateway, which will not only reduce your expenses but also provide you with fast and convenient delivery services.
What is your shipping policy?
Another vital thing wholesale suppliers should inform you about is the approximate time it would take for them to deliver your orders.
You wouldn&#;t want to find yourself in a situation in which customers can&#;t make a purchase of a certain item because your store is out of stock.
Therefore, just like previously mentioned, when choosing a supplier, keep in mind both the location of the warehouses and the time it might take for orders to be handed over to you.
Can I track my orders?
In order for you to be able to keep an eye on your packages, ask your wholesaler if they offer the possibility for you to track your delivery.
In that way, you can be kept posted on the status of your order at all times and be notified almost instantly in the case of any shipping delays.
Hence, make sure to pick out a supplier that would provide you with a tracking number, as BrandsGateway does with its clients, so you could constantly be kept updated on where your order stands.
Do you ship worldwide?
Before trying to figure out delivery costs, order tracking, or shipping time, you need to find out if the potential suppliers you&#;ve been looking into ship globally or just locally.
If they don&#;t ship to your location, you&#;d only be wasting your time with them.
You shouldn&#;t be surprised if you ever come across wholesalers who limit their shipping abilities and offer delivery services only within the countries their warehouses are situated in and sometimes including neighboring states.
For that reason, always make sure that you work with a supplier that ships worldwide so that you can build an international eCommerce business.
What are your return policies?
Being aware of return and refund policies is crucial in the event of having to deal with damaged goods.
Thus, it&#;s important to have a clear understanding of how your supplier manages situations when clients wish to return products or cancel orders.
Some might offer monetary reimbursement, some may provide store credit, while others might give out coupons or discounts.
In addition, be on the watch for any hidden fees or additional charges that could be imposed by the supplier.
Who covers the costs in case of returns?
In most cases, suppliers rarely offer freight-collect services concerning the return of products.
In other words, the buyers are the ones responsible for covering the shipping costs when sending items back to the wholesaler.
However, there are suppliers that do bear those costs in the event of merchandise that is faulty, has been damaged, or wrongly shipped.
In order to benefit from a full refund in cases like these, suppliers are likely to ask you to provide them with photos of the products concerned.
After they&#;ve accepted your request, they&#;ll be able to reimburse you for your loss.
Therefore, have a good look at the terms and conditions of your wholesaler and take careful notice of the returns and refunds sections.
What payment methods do you accept?
One more key question to include in your list is regarding the payment methods of the wholesalers you have set your mind on working with.
Taking into account the pros and cons of various payment methods, depending on your preferences and possibilities, you might find some of them are less while others are more suitable for your business.
Thus, it&#;d be wise to opt for suppliers who present clients with the opportunity to choose among different types of payment.
In this manner, you&#;d have the freedom to determine which option would work best for you.
What do your payment terms involve?
To avoid any inconveniences, it&#;s essential to settle the payment terms with the supplier, meaning, to agree on when payments should be installed.
Usually, wholesalers have clearly defined payment times that clients are expected to respect.
However, for different types of items, there may be different payment terms to be met.
Hence, it&#;s important to inform yourself thoroughly about invoice deadlines so there won&#;t be any confusion or unexpected situations.
What are the anticipated profit margins?
Do you offer discounts?
When purchasing products in bulk, luxury brands particularly, wholesalers try to abstain from giving discounts.
It&#;s an industry standard that has been around for a long time and suppliers attempt to stick with it.
Nevertheless, during the holiday shopping season, chances are you&#;ll come across discounts for particular categories of products and brands.
So, stay in tune with your supplier so you don&#;t miss out on those opportunities.
Do you provide customer service?
You know that a wholesaler is worth doing business with when they not only supply clients with excellent products but also have at disposal exceptional customer service.
Whether it&#;s about the above-discussed delivery issues, merchandise troubles, or something else, clients should always be able to lean on customer support for any kind of problem that may arise.
In that way, they can keep steady communication with the supplier around the clock.
Are you interested in learning more about Rail Accessories Wholesale? Contact us today to secure an expert consultation!
Do you have customer reviews available?
Last but not least, customer reviews and references exert an astounding influence on clients&#; decisions.
In a survey conducted by PowerReviews, 98% of consumers said that reviews are an indispensable step when purchasing merchandise, thus, giving them a decision-making role in the purchase process both in the B2C and B2B marketplaces.
So, it wouldn&#;t be a bad idea to request from suppliers credible reviews. To illustrate, wholesaler BrandsGateway supplies interested retailers with such testimonials, furnishing them with evidence that BrandsGateway is legit.
Final thoughts
As your store grows and expands, you&#;re likely to constantly come across new wholesale suppliers.
Some of them might emerge immediately as the perfect match, while others might not be up your alley.
To be 100% sure that they are someone your store would benefit from working with, we recommend putting these questions to use when business talks are in progress.
Thus, we advise you to have this list on hand so you can come back to it whenever you need to evaluate new partners and verify the reliability and authenticity of their services and company.
When you start a retail business, one of the first things to figure out is where you&#;re going to find products to sell. This might mean buying from wholesalers.
Most retailers don&#;t make their own merchandise. Instead, they get their products from wholesalers. Not only are wholesalers great sources of merchandise, but as your business grows and evolves, they&#;re flexible enough to support you along the way.
Buying wholesale can seem a little mysterious at first, which is why we&#;re sharing our tips to help you get started, how to find wholesalers and how to get wholesale prices. We&#;ve been helping retailers do better business for over a decade.
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What is buying wholesale?
Have you ever wondered where do businesses buy their products? Buying retail and wholesale are two different things. When you buy merchandise from a wholesaler, you&#;re shopping from the middleman between your retail store and the manufacturer. A wholesale purchase is almost always made in bulk, and because of that, you pay a discounted price for the purchase.
After you buy products from a wholesaler, you can then sell them at your own store at a higher price to make a profit. This higher price is called the retail price, and it&#;s what customers will pay when they shop in your store. Customers are willing to pay the higher price because the retailer takes on the cost and logistics of buying and storing wholesale items (and delivering excellent customer service).
Buying directly from manufacturers can provide lower cost per unit as it eliminates the middlemen. However, manufacturers usually sell in very large quantities, which may not be feasible for smaller retailers. Also, they may not offer the same range of products that a wholesaler can.
Choosing between wholesale and retail depends on several factors including your business model, the nature of the products you&#;re selling, your target market, and your financial capacity. If you are a manufacturer looking to reach a larger market, partnering with wholesalers might be the best choice. If you have a unique product line and want to control how it is sold and presented to consumers, going retail might be more appropriate.
Pros and Cons of Buying from Wholesale vs Retail
Buying from wholesalers has its pros and cons. One significant advantage is the lower cost per unit compared to buying retail. This is due to purchasing in bulk, allowing businesses to benefit from economies of scale. However, a disadvantage of buying wholesale is the requirement to buy in large quantities, which may lead to overstocking or tying up cash flow. Retail buying, on the other hand, offers flexibility in purchasing smaller quantities but at a higher cost.
The difference between the retail and the wholesale prices is called the margin. It&#;s the amount of profit that a retailer gets from a sale. The retail price typically varies between businesses, and there are a few different pricing strategies that can be used to determine the best retail price for you. Once you do this, you can then determine your gross profit.
Wholesale examples
Wholesale is wholesale, but not all wholesale looks the same. You could think of it as an umbrella that covers a few different wholesale modes.
Let&#;s go over some examples to illustrate.
Traditional wholesale
Nike functions as a wholesaler by leveraging advanced technologies and strategic partnerships to supply retailers like Foot Locker.
Foot Locker orders from Nike with established accounts via Nike&#;s in-house B2B platform. Other retailers looking to place orders like Foot Locker does would need to go through an extensive vetting process to gain access to the platform.
In addition to facilitating ordering, Nike collaborates closely with their licensed retailers to enhance the shopping experience, creating &#;shop-within-a-shop&#; spaces to showcase their products. This partnership model allows Nike to optimize their supply chain, maintain product availability and support both their direct-to-consumer and wholesale operations effectively.
Online B2B platforms
Online B2B platforms aggregate multiple wholesale suppliers, providing a more convenient way to discover and order from new brands.
Estes Park retailer The White Orchid uses the B2B commerce platform NuORDER By Lightspeed to streamline wholesale operations.
NuORDER allows The White Orchid to shop collections digitally and enables seamless orders between the POS and platform. The integration with Lightspeed further enhances their operations, providing real-time data and improving overall workflow, ensuring a smooth and effective wholesale process. For The White Orchid, that translates to 90 minutes saved per order when buying wholesale.
How do I price wholesale items for resale?
Gross Profit = Revenue &#; Cost of Goods Sold (COGS)
In the above formula, revenue is equal to the retail price you charge to your customers. COGS is a high-level metric that covers all of the variable costs associated with producing and selling goods. Fixed costs are not accounted for in gross profit calculations. For the sake of simplicity, since you&#;re buying from a wholesaler instead of producing a product yourself, you can estimate that your COGS is the price you pay for a product.
This means that gross profit is the amount of money you make off of a sale. Retailers typically &#;markup&#; or raise the price of goods they bought wholesale so that they can make a profit. A good example is buying a t-shirt at a wholesale price of $2 and then selling the shirt in your store for $10.
In this case, the markup is $8, and gross profit of that sale is $8. Keep this in mind when buying inventory for your store. If your wholesaler&#;s prices are too high, it will affect the overall profitability of your business.
Likewise, the prices you offer your customers have to be consistent with the market you&#;re in. It&#;s easier than ever for customers to find alternatives online or in other stores. Pricing is one of the ways you can stay competitive and retain customer loyalty.
Pricing matters for wholesalers as well, and many will have a minimum order requirement set before you can do business. A minimum order is the minimum amount of products a retailer can purchase from a wholesaler to do business. Wholesalers set these minimums in order to hit their revenue and profitability targets. For wholesalers, MOQ ensures that they can sell their products in bulk, which optimizes their production and distribution process. Retailers need to consider MOQs when buying from wholesalers, as it could influence cash flow and inventory management.
Payment terms in wholesale purchasing refer to the agreement between the buyer and the supplier about when payment should be made. Terms can range from payment in advance to payment after delivery, 30 days after invoice date, etc. Understanding and negotiating payment terms is crucial to maintain cash flow and establish good relationships with suppliers.
Since you&#;ll need to order products in larger quantities to meet the minimum order requirements, it&#;s a good idea to order your top-selling items from wholesalers. You should be able to use your POS system to easily spot your best sellers and see what&#;s most profitable.
Can I buy wholesale from a manufacturer?
Generally, a product goes through multiple hands before it ends up on retail shelves:
The manufacturer creates the products
The distributor facilitates sales between the manufacturer and the wholesaler, and sometimes between the manufacturer and retailers
The wholesaler works with the distributor to buy in bulk
The retailer buys smaller quantities of the items from the wholesaler (or distributor) to sell individual goods to consumers
Some manufacturers are also distributors and wholesalers; in this case, you&#;d buy wholesale items directly from the manufacturer. Apple and Nike, for example, produce their own goods that are then sold in bulk to retailers (and also sold directly to consumers in their stores).
The Role of Distributors in Wholesale Business
Distributors serve as an important link between manufacturers and retailers in the supply chain. They are responsible for distributing the products from the manufacturers to the wholesalers or directly to retailers. Distributors buy in bulk from manufacturers, then sell to either wholesalers or directly to retailers. Unlike wholesalers, distributors usually have a closer relationship with the manufacturer, sometimes even exclusive rights to distribute their products within certain geographical areas.
Generally, though, a retailer will go through a wholesaler or a B2B wholesale marketplace to get goods. This is because manufacturers typically focus their budgets on manufacturing, not on marketing&#;that&#;s what distributors and wholesalers are for.
How to find a wholesaler
There are several ways to find a wholesaler. You can approach wholesalers or distributors individually, or you can work with a B2B wholesale marketplace to streamline the process.
What are the types of wholesalers?
Wholesalers aren&#;t one-size-fits-all. There are a range of wholesale businesses that work with retailers (and, sometimes, consumers). The type of wholesaler you work with will depend on the specific items you&#;re buying in bulk, the retail niche you want to fit in, the kinds of relationships you are able to build and the wholesale ordering technology you want to work with.
Manufacturers
Some, but not all, manufacturers also act as wholesalers. Because there are less middlemen, buying directly from a manufacturer may net you lower wholesale prices. However, buying directly isn&#;t always available as an option&#;and even when it is, it isn&#;t always the most convenient.
Advantages of manufacturers:
- Direct control:
manufacturers have direct control over the production and distribution of their products, ensuring quality and consistency when buying wholesale
- Cost savings:
eliminating intermediaries can reduce costs, leading to better margins and competitive pricing
- Customer relationship:
manufacturers can build stronger relationships with retailers and end customers, providing better service and understanding market needs
Disadvantages of manufacturers:
- Limited focus:
manufacturers may lack the distribution network and marketing expertise that specialized wholesalers possess
- Capital intensive:
setting up and maintaining a distribution network can be expensive and resource-intensive
- Scalability issues:
manufacturers might struggle with scaling their distribution to meet widespread demand without extensive infrastructure
Retail wholesalers
Retail wholesalers sell products in bulk to retailers at a slight markup from manufacturers. Buying through a retail wholesaler means you can purchase wholesale items from more than one manufacturer.
Advantages of retail wholesalers:
- Market expertise:
retail wholesalers often have deep knowledge of the market and customer preferences, which can help in better targeting and stocking
- Established networks:
they usually have established relationships with a wide range of retailers, facilitating smoother and faster distribution
- Flexibility:
they can offer a variety of products from different manufacturers, providing a one-stop solution for retailers
Disadvantages of retail wholesalers:
- Higher costs:
the added layer between manufacturers and retailers can increase costs, potentially leading to higher prices for end consumers.
- Dependency:
retail wholesalers depend heavily on manufacturers for supply and on retailers for sales, making them vulnerable to market fluctuations
- Limited control:
they have less control over the production process, which can impact product availability and quality
Merchant wholesalers
As opposed to retail wholesalers, merchant wholesalers sell to both retailers and the end customer. They generally have lower minimum order sizes in light of this, and are your direct competition while also being suppliers.
Advantages of merchant wholesalers:
- Inventory management:
they take ownership of the goods, manage inventory and assume the risks of storage, which can reduce the burden on manufacturers and retailers
- Bulk buying power:
their ability to buy in bulk can lead to cost savings and better pricing for retailers
- Service variety:
they offer various services such as packaging, labeling and logistics, adding value beyond simple distribution
Disadvantages of merchant wholesalers:
- Capital requirement:
significant capital is needed to purchase and store large quantities of goods
- Operational complexity:
managing a vast inventory and logistics can be complex and requires efficient systems and processes
- Market risks:
holding large inventories can be risky if market demand fluctuates or products become obsolete
B2B wholesale marketplaces
this is the most convenient option. Wholesalers and brands come together on B2B wholesale marketplaces like NuORDER, where retailers can browse and order products much more efficiently than the traditional -and-purchase-order format.
Advantages of wholesale marketplaces:
- Wide reach:
online platforms can reach a global audience, expanding market opportunities for sellers and buyers
- Efficiency:
streamlined processes and digital tools can make transactions quicker and more efficient
- Lower entry barriers:
they reduce the need for physical infrastructure, making it easier for small businesses to enter the market
Disadvantages of wholesale marketplaces:
- Intense competition:
the accessibility of these platforms means there is often intense competition, which can drive down prices and margins
- Trust issues:
building trust with buyers can be difficult, especially for new or lesser-known sellers
Where to buy wholesale products
Searching for wholesale items online can be a gamble. Not all aggregate sites thoroughly vet their wholesalers, and not all legitimate wholesalers have high-ranking or well-designed sites. You don&#;t always know if you can trust someone on some of the big marketplaces.
To look for legitimate wholesalers, your local chamber of commerce is often a good place to start. If you&#;re in touch with other business owners, crowdsourcing from your network is another great way to get info on which wholesalers you should look into and which ones you should avoid.
Trade shows and expos provide a unique platform where retailers can meet wholesalers and manufacturers face-to-face. Retailers can discover new products, negotiate deals, and forge long-lasting business relationships. These events are also beneficial for staying updated with the latest market trends and gaining insights from industry experts.
For trustworthy wholesalers online, try a B2B wholesale marketplace with strict standards for brands. B2B marketplaces make it easier to find wholesale items, as you&#;ll be able to browse catalogs online.
How to choose a wholesaler
Once you&#;ve compiled a list of wholesalers you&#;re interested in, Google them and read online reviews from other retailers who have worked with them. That will give you a good sense of whether or not they&#;re worth reaching out to.
After you&#;ve narrowed your list down to your top choices, here is a list of must-ask questions when choosing a wholesaler:
What merchandise do you sell?
If you&#;re selling a wide range of items or if you plan on keeping your store very specific, you have to choose wholesale partners that carry the products you need. You can work with as many different wholesalers as you need to in order to get the inventory you want. However, make sure that the kind of merchandise these wholesalers offer aligns with the kind of store you run so your brand is consistent.
What is your price point?
You&#;re selling the merchandise you bought from the wholesaler in order to make a profit. When choosing a supplier, make sure you can get pricing that allows you to hit your desired profit margins.
Is the wholesaler reliable?
Don&#;t work with people you can&#;t rely on. Wholesalers who deliver merchandise late, not at all or consistently show up with damaged goods aren&#;t good for business.
Do they have great customer service?
Make sure any company you work with has a reliable customer service team you can easily reach when needed. If you have to jump through hoops to have your questions answered or their customer service is never around when you need them, you may need a new wholesale partner.
How much do they know about the product?
The wholesale partner you choose should have a strong understanding of the products they sell. Not only can you share that information with your customers, but it also gives you the chance to make sure you know you have a partner who stands by the quality and performance of what they&#;re selling. Wholesalers who can&#;t answer your questions about their product may be aware their merchandise isn&#;t the best, or a lack of knowledge may mean they just don&#;t care. Either way, a good business partner will be able to answer your questions adequately.
Can they help you drop ship?
The rise of ecommerce has dramatically reshaped both the retail and wholesale industries. Online platforms allow retailers to connect with wholesalers and manufacturers from around the world, providing a wider range of products. For wholesalers, ecommerce offers an opportunity to sell directly to consumers, bypassing retailers altogether.
If you sell products online, it might be worth asking if your wholesalers can help you drop ship. Drop shipping is a fulfillment method where the wholesaler stores your inventory and handles your shipping. Dropshipping is a business model where the retailer does not keep goods in stock but instead transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer. It blends the wholesale and retail model by eliminating the need for retailers to stock or own inventory.
When someone places an order from your eCommerce store, you pass on their order information to your wholesaler, and they ship it directly to your customer. Drop shipping is a great option if you want to save on storage and shipping costs, but it&#;s a much more hands-off way of doing business.
If you decide to drop ship, make sure you ask your wholesaler to send you samples of every single product you sell to ensure that the quality is up to your standards.
Will you be buying wholesale items domestically or internationally?
Supply chain hiccups throughout the pandemic have many retailers looking closer to home for wholesalers.
A domestic supply chain can mean less disruption, certainly. And customers often like made-in-America or Canada goods. But not all wholesale items are available from domestic manufacturers or suppliers, and prices can be higher.
Meanwhile, while you&#;ll have a wider (and more affordable) selection from international suppliers, you never know when you&#;ll run into manufacturing or shipping delays.
Rather than relying too heavily on one or the other, it may be best to ensure you&#;re sourcing from a mix of international and domestic wholesalers.
Checklist for choosing wholesalers
As you ask your questions and do your research, fill out this checklist.
- Product quality and range
High quality products
Variety of products
- Pricing and discounts
- Reliability and reputation
- Minimum order requirements
- Payment Terms
- Shipping and delivery
- Customer service
- Return policy
- Technology and ordering system
How to buy in bulk for wholesale
The general process for buying bulk items for wholesale is:
Find a wholesaler. Check out your local commerce center, wholesaler sites online and B2B marketplaces.
Contact the wholesaler. You may be able to skip&#;or at least streamline&#;this step if you&#;re using a B2B marketplace. Otherwise, reach out to the wholesaler over and introduce yourself and your business.
Show your wholesaler your business licenses, if needed. Only merchant wholesalers will sell to the end user. Retail wholesalers may ask for proof you&#;re a legitimate business.
Sign an agreement with the wholesaler. Examine the terms carefully; have a lawyer look them over if needed.
Place an order with the wholesaler. The wholesaler will let you know how they prefer you to order. A B2B wholesaler marketplace will be the most convenient. Keep the minimum order quantity in mind&#;if you&#;re not ready to place an order that large, ask the wholesaler if you can order a sample first.
Determine your desired prices. Some manufacturers set prices for their goods&#;Apple, for example, requires resellers to price their goods similarly. Check your agreement for details.
Place more orders as needed.
Getting a wholesale license
Let&#;s clear something up: you don&#;t actually need a wholesale license to buy from a wholesaler. This is why the end customer can buy from merchant wholesalers.
However, without the right license, you pay sales tax on goods from a wholesaler.
Legal aspects and licenses for selling wholesale goods
You do need a license to resell items you buy from a wholesaler. Generally, this will mean you at least need a sales tax ID, and is how to get wholesale prices. Depending on your jurisdiction, there may be other permits and licenses you need to resell wholesale goods.
Having these licenses permits tax exemption on purchases made with the intent to resell. The permit indicates that you will collect the taxes during the sale of the goods to the end consumer. Businesses should ensure they comply with their local and national laws and regulations when engaging in wholesale buying.
Contact your state (or province) revenue agency for guidance on what they need from you. Be prepared to pay a small fee.
What are some additional factors to consider when buying wholesale?
It&#;s okay to negotiate
Don&#;t be afraid to negotiate the price of goods when you need to. Let the supplier know if your sales are doing well and how much business they can expect from you in order to get a better deal. Be honest and fair in your negotiations to form a longstanding relationship with your wholesalers.
When negotiating with wholesalers, retailers must do their homework and be prepared with market knowledge. Understanding the average market price, demand, and quality of the product can give you an upper hand in negotiations. Always be clear about your needs and expectations and try to negotiate on payment terms, delivery schedules, and minimum order quantities.
Order the right amount
In wholesale, you&#;re buying in large quantities which may lead to storage and warehousing challenges. On the other hand, buying in smaller quantities from retailers can keep your inventory levels manageable. Efficient inventory management is key to ensure you have enough stock to meet demand, but not so much that it ties up your cash flow or results in wasted, unsold goods.
Try using a point of sale system like Lightspeed to ensure you&#;re always optimizing how you&#;re buying wholesale goods. Lightspeed can recommend purchase amounts based on sales history and order timelines to be sure you get the right amount every time.
Organize storage space
Lastly, before your wholesale order arrives, you&#;ll also need to have an organized place to store it (unless you&#;re drop shipping). Having a storage room with adequate shelving makes finding different parts of your inventory that much easier. Keeping things labeled will make sure you don&#;t lose track of anything. If your inventory exceeds the confines of your storage room, consider upgrading to a warehouse equipped with industrial equipment meant to handle large scale fulfillment needs.
Getting the right products for your store
Figuring out how to buy wholesale to resell merchandise is an important step in increasing your profits and inventory. That&#;s why it&#;s important to take the time to do the math to make sure you&#;re buying and selling merchandise at prices that will work for you and your business.
You can use your POS system to help you crunch the numbers. Work with wholesalers who sell high-quality products, are reliable and can support your growth. By asking the right questions and having the numbers figured out, you&#;ll be well on your way to making smarter decisions to grow your business.
Want to learn more about Lightspeed&#;s commerce platform and how it can help you better manage suppliers, inventory and purchase orders? Watch a free demo today.
Frequently asked questions about wholesaling
What are the necessary permits and licenses required to buy wholesale?
To buy wholesale, you typically need a resale certificate or sales tax ID, which allows you to purchase goods tax-free for resale. Requirements vary by region, so check with your local tax authority.
Some wholesalers may also require a business license to verify your legitimacy. It&#;s essential to consult local regulations to ensure compliance with all necessary permits and licenses.
How can I identify reliable wholesale suppliers?
Identify reliable wholesale suppliers by researching online directories, attending trade shows, and seeking recommendations from industry peers. Evaluate potential suppliers based on their reputation, product quality, pricing, and terms. Check for customer reviews, request samples and verify their credentials, such as business licenses and certifications, to ensure reliability and trustworthiness.
What are the advantages of buying wholesale for my business?
Buying wholesale offers significant cost savings due to bulk purchasing, which reduces the cost per unit. It improves profit margins, provides access to a wider range of products, and allows for better inventory management. Additionally, strong relationships with wholesalers can lead to exclusive deals and early access to new products, enhancing your competitive edge.
How do I handle logistics and shipping when purchasing wholesale?
Handling logistics and shipping when purchasing wholesale involves coordinating with suppliers for delivery schedules, understanding shipping terms and managing customs if importing internationally. It&#;s crucial to have a reliable freight forwarder, ensure proper documentation and inspect goods upon arrival to address any issues promptly.
What should I consider when negotiating prices with wholesale suppliers?
When negotiating prices with wholesale suppliers, consider volume discounts, payment terms and delivery schedules. Research market prices to ensure you&#;re getting a fair deal. Be prepared to discuss your order history and future potential to leverage better terms. Building a good relationship with the supplier can also lead to more favorable negotiations.
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