Debunking 9 Common Myths About Buying Wholesale
In 2017, global e-commerce sales totaled over $2.3 trillion.
It is clear that a successful e-commerce site can earn some serious money. But in order to make sales, you first need the products.
This is where buying wholesale comes in. Purchasing products at wholesale prices and selling them on at a profit is a common business model in the e-commerce world.
But there is a lot of nonsense written about buying wholesale. Read on as we debunk nine of the most common myths about wholesale purchasing.
1. You Can Only Buy Wholesale with a Big Budget
Many people are put off the idea of buying wholesale because they mistakenly believe that to do so you need to spend big.
This isn’t the case at all. Many wholesalers will not have minimum order sizes or will have minimum orders that are well within the reach of most e-commerce businesses.
Obviously, the rules of buying in bulk apply–the more you buy, the bigger the savings you can make. But it is more than possible to start with a small budget and build your business until you can afford large orders and deep discounts.
2. Seasonal Trends Don’t Matter
Many people assume that if you’re buying wholesale then you won’t be affected by fluctuations in supply and demand.
But seasonal trends affect wholesale buying in the same way that they affect any retail business. Demand will always be higher over the holiday periods, and you’ll need to plan appropriately. Expect to need higher stock levels to meet the increase in business, and remember that your competition will be trying to stock up at the same time that you are.
3. Stick to What You Want
Buying wholesale doesn’t mean that you should have one item in mind and ignore all the others.
Wholesalers have wide ranges of stock, and their inventory is changing all the time. If you only focus on buying the same products again and again, you’re missing out on items that could potentially become your biggest sellers.
So take the time to look through the full inventory of wholesalers. You may be surprised at what you can find.
4. Buying Wholesale Online is the Only Option
We live in an online world, but it doesn’t mean that you should run your business entirely from your laptop.
Many wholesalers have physical premises that you can visit. This can help in determining the quality of the products that you’re buying, which isn’t always that easy based on just a photo on a website.
And meeting wholesalers face to face allows you to build up a rapport and discuss pricing and discounts which isn’t as easy to do over email.
5. The Cheapest Means the Best
The most tempting thing to do when starting an e-commerce business is to find the cheapest items possible to give you the biggest margin.
Whilst this may sound like a great idea, the cheapest items are equally cheap for all of your competitors. And if you’re all following the same plan, your market is going to get saturated pretty fast. The lowest price isn’t always the best guarantee of quality either, which certainly won’t help with repeat business.
Finding that sweet spot between low prices and good quality can be difficult, but it is worth the effort if you want your business to succeed.
6. Niche Items Are Easy to Find
Many new businesses are convinced they just need to find a niche item that not many people are selling, market their site well and watch the cash roll in.
The problem with this plan is that niche items are niche for a reason. If you don’t find many websites selling left-handed sporks online, it could be for a number of reasons. Number one is that they really are niche, which means you will struggle to find them for sale, especially at competitive prices. And the second is that nobody actually wants them.
You can make money filling a gap in the market, but not every gap is worth filling.
7. You Don’t Need to Build Relationships
Buy products, market your site, sell products, buy more products. Why would you ever need to interact with anyone else?
You can run a business this way, but it’s not one that is likely to have any sustainable growth. Building relationships with your suppliers is equally as important as building relationships with customers. Many wholesalers offer options upon request that aren’t advertised on their websites. You may be able to learn more about discounted off-price offers if you purchase by the pallet, for example.
But you will never learn about these offers unless you open a dialogue with the suppliers in the first place.
8. Your Taste is All That Matters
Buying wholesale isn’t like visiting a candy store. Browsing through the inventory and choosing your favorite items may be fun, but isn’t a great business decision.
To sell a lot of products, you need to know which products sell well and which don’t. The only way to learn that is by putting the work in and doing some research. At the end of the day, the customer is king. It is what the customer wants to buy, not what you want to sell, that matters.
9. Price Research Isn’t Important
Another mistaken belief that many e-commerce businesses have is that they can set their own prices without worrying about the rest of the market.
The temptation may be to set your margin as high as possible and assume this is the best way to make a profit. But a huge markup on zero sales is still zero profit. Conversely, setting your price too low means you may make a lot of sales, but not be optimizing your profits based on what consumers are willing to pay for your products.
Take the time to do the research and it will pay dividends.
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