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Instructions to help newbies in the wholesale biz

Discussion in 'Making Money' started by dizz, Jul 29, 2009.

  1. dizz

    dizz Elite Member

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    You have to learn how wholesale prices can vary so you can know when you are buying at real wholesale prices and not what the supplier wants you to believe are wholesale prices.

    Is finding products at wholesale prices difficult? The answer is no. It's not difficult. The difficult part is getting them for "real" wholesale prices.

    What do I mean by "real wholesale prices"? Well, most suppliers will know in the first 20 seconds if you are a seasoned buyer or just starting out. They will price their merchandise accordingly.

    If you are buying wholesale products to sell on eBay, to stores or out of your home it's all the same to them. They will have up to 10 different "wholesale prices" for the same items.

    Even experienced buyers and large established business pay too much on their wholesale products. So don't expect to know more than them when it comes to buying at real bottom wholesale prices.

    I got my first introduction into the wholesale product pricing in one of my first wholesale consulting gigs. I was going over the prices of their best selling products to see the profit margins when I was impressed with just how low the price of merchandise was. Or so it seemed to me at the time.

    As part of my job I visited all the wholesale trade shows around the country comparing prices. This is when I noticed large discrepancies in pricing for the same exact items.

    Walking from booth to booth I was looking for a list of about 500 items in just a few product categories including small electronics, sunglasses, house wares, tools and toys. We needed anywhere from 50 to 100 different products from each category.

    After some walking and more walking I found the exact same products with the same brands in different booths. The products were the same but the prices were much different, more than double, as much as 150% more in one booth compared to another, in the same trade show, sometimes the booths no more than 100 feet apart.

    This was a shock to me. I thought prices would only range by 3% or a few cents. I was very wrong. Later I found out that only a few people are really manufacturers or buy direct from manufacturers. Fewer suppliers are real importers of products. Most buy from wholesalers themselves and then resell the products to other wholesalers or retailers.

    Later on, when I visited current suppliers of my customer I renegotiated prices and told him I knew the "other" suppliers' prices. After a few meetings I managed to lower prices by as much as 50%. Now, to give you a good perspective, my customer had been purchasing from these suppliers for 12 years and with these new prices his profit doubled. Needless to say my customer was very happy and very surprised.

    Here are some tips and techniques you can apply immediately to lower your wholesale purchasing prices.

    Get to the source:

    What does this mean? It means you should know who the original source is for the products you are buying, especially if those products are not name brand items. For example, if you are buying t-shirts you should know who makes the t-shirts and where, who imports them, who prints the design if they have one, what is the material and who is selling it and where. Don't just buy 1,000 t-shirts because they tell you they are "good sellers". Make sure you know where they come from.

    Even if you are buying closeouts you have to make sure who else sells them and who is the source. I've bought and sold a lot of closeouts in my time and let me tell you, they are closeouts for a reason. Even popular closeout websites that claim they are selling closeouts or liquidations are expensive. I check out their prices often and they are usually wholesalers selling products for a good profit.

    Knowledge will be the key to your products. If you know what you are buying and the real prices of production, transportation, warehousing you will be able to negotiate with your suppliers. If you don't, you will usually pay up to 150% more for the same items that others are buying in the same quantities.

    Here are 5 questions that you can ask your wholesale supplier that will help you determine the right wholesale price:

    1. What is the real retail price of the item and where does it sell for that price?

    2. Who is selling it to those Retail Stores and how much profit does the store make and their supplier? This will give you an idea of how much the store pays and how much the store supplier pays.

    3. What is the price per case, per pallet and per truckload? This will give you an idea of their best pricing.

    4. Who is your best customer? How much do they buy per month? This will tell you who gets the best price for the product.

    5. Do you manufacture or import this product? This will tell you if they are the original source for the product or, if, like you, they are a wholesaler or distributor.

    Well, guys, I hope I'm helping you guys making money... With these instructions, and the other list I posted, anybody who has a little investment money, should be able to make some money on ebay. Hope you enjoy! Happy money making
     
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    Last edited: Jul 29, 2009
  2. dizz

    dizz Elite Member

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    You have a business. You need a wholesale list source to expand your product line and surely for possibilities of profiting more from the acquirement of wholesale products from such suppliers. Precisely, one of the easiest ways to get a source contact list of distributors and wholesalers is by hitting a deep search on the Internet. There is no secret about it; everyone may be able to hit a search successfully on Google, Yahoo and MSN and find what may seem like sources, at least as a final point.

    The major concern and rising issue with search engines is that anybody with good amount of money, skills and knowledge can put their company number one if they want to. Situation is that the best distributors that many of us power sellers know are not listed in the top 10 results on free search queries on Google, Yahoo and MSN and neither advertising themselves.

    Reason why is quite simple, the best wholesale suppliers don't need to list themselves openly available to the mass market. By general rules, distributors, wholesalers and suppliers have so much business that they don't even have to advertise themselves often or consistently once they are established. Many of the reasons being, once they are established the possibilities being, 20% of their business will come from top corporations that are in the top of their business and industry.

    So why many people in auctions, directories among many of the other places to look for sources end up acquiring consistently more so-called wholesale list? These people, including myself need to know sources as long as there is more demand from customers for more product expansion and more money to be made in different markets if the owner of the small business or company desires to do so.

    Some of the good places to find specifically, wholesale list suppliers - is in Global Sources. This is where many power sellers look for wholesale opportunities nationally and internationally. Many of us personally use this directory, however, be very cautious in anything that correlates to the word directory.

    Note that a worldwide directory purpose in many of the cases is to inform the public of the submission of allege suppliers, distributors and wholesalers at their disposal. Many directories, not all of them have the same objective of protection with the same significant equation as like all of them, the owner's goal most often is not protection.

    Many directories are in the business of making money, therefore, the more alleged sources many directories have, the more money they usually make. By now the understanding should be as simple as 1,2,3.

    More importantly as a new business owner you should remind yourself loud and clear that your objective is not to spend time on task that can be easily researched by your team, partners and 3rd party companies. Your objective should be to make sure your operation runs smoothly and to look for more money making opportunities inside your same industry - most often it relies in your marketing ability. With enough experiences already in hand, make sure your selection of wholesale list suppliers is the correct one and not one business relationship that may get you broke.
     
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  3. brembo

    brembo Newbie

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    Double thank you. I always find your posts informative and I'm doing my best to use the information that you're freely providing to make some extra money for myself. Your constant work is very much appreciated!
     
  4. lordgiap

    lordgiap BANNED BANNED

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    Why don't go dropshipping?with a good company It's safer and easier as you don't need keep stock.As I am doing this for months and have a good profit.
     
  5. dizz

    dizz Elite Member

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    Because some people would feel more comfortable with having the stock already in their hands rather than the chance of selling something that the dropshipper no longer has. Also it depends on where you live if that would be allowed.
     
  6. brembo

    brembo Newbie

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    I second this. I've been operating a White Hat business for 4 years now that both stocks product and dropships. Having the stock on hand makes life MUCH easier. You can generally get better discounts and you are also in 100% control of the shipment. It's a comforting feeling to not need to rely on someone else to make sure that your customer's order goes out promptly.
     
  7. dizz

    dizz Elite Member

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    yes but as u said a little mix is a way to go but as a business want more control of how your product pricing and delivery gets done.
     
  8. lumpi82

    lumpi82 Newbie

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    great article! thank you so much for the hard work!
     
  9. glove

    glove Junior Member

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    Prices and expenses are part of a business.You must have the control and management to get things done.You can compare prices from different stores before you buy as a wholesaler and see which is reasonable.