5 Things to Know before Getting Involved with Wholesale Buying

Wholesale buying can give you access to a very wide range of important benefits, from the ability to pay pennies on the dollar for inventory that you can sell online or through a brick-and-mortar shop, to the chance to purchase loss leaders to bolster sales and drive customers through your door. However, there are quite a few things that you’ll need to know before you get involved in wholesale buying. Below, we’ll discuss some of the most important.

Know What You Need Most

Before getting involved with wholesale buying, it’s important to know your needs in terms of the products that you’ll be purchasing. This will require a firm understanding of your business goals, but also of your audience. Do your customers value brand name recognition? Do they prefer financial savings rather than the perceived quality that comes from purchasing brand name merchandise? Do your customers have a frequent need for a particular type of product, or is it an infrequent purchase?

These are just a few of the questions you’ll need to answer before getting involved in wholesale buying. By understanding these elements, you’ll be able to make smarter decisions involving the products you purchase, and the liquidators with which you do business.

Know How You’ll Use Those Products

Wholesale buying can be an excellent way to add unique inventory to your regular offerings, but you’ll need to know how you’ll use that merchandise before you start buying. In most instances, wholesale buying isn’t an ideal solution for sourcing store-wide stock. You’ll need to work with a conventional distributor for that.

Of course, this really applies primarily to standard retail operations – you run an online or brick and mortar store that specializes in a particular type or range of products (a shoe store, an athletic clothing store, etc.). There are examples where wholesale buying can be used to source your entire run of inventory. These are mostly online operations, particularly with the use of Amazon’s platform.

For those operating physical stores, you’ll need to know the purposes for which you’ll use the products purchased through wholesale buying. They can be quite widespread – you can use them as loss leaders, or you can bundle them together or with other items from your regular inventory. You can use them as giveaway and incentives to get customers in the door, and numerous other ways.

Wholesale Buying Might Not Be All It’s Cracked Up to Be

Yes, working with a wholesale supplier is the most common means of obtaining the inventory you need for your store. Manufacturers aren’t all that interested in dealing with small businesses, or even major retailers. They need to focus on making their products. They partner with wholesale suppliers to get their products from the manufacturing plant to the retailer.

However, understand that wholesale buying, in this case, may not be the best option for you, particularly if you’ve got a limited budget, or are a small operation. It might be better to consider wholesale liquidators, as they can offer quite a few advantages not found with wholesale suppliers.

Wholesale liquidators work with more clients than just manufacturers. They work with retailers, wholesale suppliers, and manufacturers to source products at the lowest possible price to their customers. You’ll find a wide range of product options available, too. These range from overstocked items that retailers or suppliers need to get rid of, to discontinued items that need to go in order to make room for new merchandise.

You’ll also find seconds, shelf-pulls and customer returns available. Finally, with the right liquidator, you’ll have access to refurbished items that are professionally repaired and refitted to like-new condition, but made available for very low prices.

Use Auctions to Your Advantage

You might think that working with a liquidator will be similar to working with a wholesale supplier in that you must sign a contract, agree to purchase a specific volume of inventory, and the like. However, that’s not really the case. Most liquidators offer merchandise in an auction format, and this can deliver even more value to you.

You’ll find two types of auction formats out there – physical auctions, and online auctions. Of the two, online auctions are the better. You don’t have to drive to the auction location, which can be across the state, or even in another state altogether. You don’t have to fight crowds to get a peek at the lot being auctioned off, either.

Online auctions work on the same basic premise as eBay – you view pictures of the lot for sale, read a description of the product(s) and then place your bid. Note that most online auctions do use a reserve, which means that if the bidding doesn’t reach a certain point, the product will not be sold.

You can use auctions to your advantage, particularly if you’re looking to supplement your regular inventory, or seeking new potential items to sell but want to trial them first before you make a commitment to buying a larger volume.

With the right liquidator, you can start wholesale buying with the purchase of a single pallet, or even individual cases of specific products. This reduces your upfront investment, while giving you the ability to try out new products or use an incentive produce or loss leader to boost sales.

Avoid the Fakes

Liquidation has become incredibly popular in recent years, and there are quite a few less than ethical businesses trying to take advantage of honest business owners trying to source product for their stores. Avoid any liquidator or wholesaler that charges you a fee to use their platform. Liquidators should make a profit on the sale only, never on a membership or usage fee.

You should also be wary of any company that attempts to sell you unrelated products or services – they should focus solely on liquidating the inventory they have on hand.

With these tips, you should be able to get involved with wholesale buying with peace of mind, knowing that you have a solid plan to build business success.

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Henley Johnson

Henley currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Henley is here to help you grow your business.

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