Upgrade from Dropshipping to Buying Wholesale Merchandise

With the online sales business booming and an ever-growing competition, your dropshipping business is not really giving you the profit that would make you continue doing it for a longer period of time. It is getting harder to make the sales at the right price for a significant profit, and it is even harder to find sellers that offer quality products at fairly low prices. So, is it time to take the next step in order to stay in the game? Have you considered purchasing wholesale products to resell online? You should!

Why Switch to Buying and Selling Wholesale Merchandise?

There are a number of reasons why one should leave dropshipping behind and look for merchandise sources among reputed wholesale suppliers. Some of the main points would be the price, the volumes of merchandise you acquire and the flexibility that comes with being able to re-market returned products.

The Price

Being able to offer a lower price than your competition is key. In order to offer a more competitive price, you have to acquire merchandise at such prices that guarantee you a healthy profit margin.

Compared to dropshipping, wholesale pallets are always sold at wholesale prices. Unlike dropshipping, you don’t have to scavenge the internet to find a third-party seller who is able to ship the product to your customer at the right price. And even better, once you have been in the business for a while and have created a network of reputable suppliers to work with, you can even look for better payment terms, lower prices or any other perks wholesalers are willing to offer to their loyal, returning customers. These perks include even lower prices.

The Volume

Buying wholesale merchandise from wholesale suppliers allows you to stock up for a longer period of time. Although you will need a storage space for the wholesale pallet of products you purchase, remember that you will be getting them at a lower price.

Dropshipping is a completely different tactic as you don’t need the storage space. However, you have to find the right third-party supplier to deliver the product to your buyer’s address. You earn by making the sale first and then searching for the product below your sale price to buy and have shipped to your buyer.

In both cases, knowing the market dynamics is key and knowing the prices of each product you are working with is even more important. But while dropshipping allows you to work without a storage space, you are buying single items, which means it is harder to find a product that can guarantee you a satisfying profit.

When buying wholesale merchandise, you are receiving a whole pallet of products, meaning you are paying less per unit in the first place and you have a larger profit margin on resale.

The key is to find the right wholesale supplier or look for a reputable liquidation company through which you can buy wholesale merchandise even cheaper than from a wholesale supplier.

Liquidation merchandise is usually sold below wholesale prices but in similar wholesale lots that will also give you enough stock to sell for a longer period and an even bigger profit margin to work with.

The Flexibility

This is also one of the major advantages of switching to wholesale or liquidated merchandise. As in every business, product returns are fairly common. However, in case of dropshipping, if your customer does not like the product, or for some reason the wrong product was shipped to your customer, the product gets returned to the seller, and not you. This complicates the process of securing a new product, as your customer will be contacting you to deliver a new product and you have to do the search again and make sure you order the right one this time.

In the case of purchasing wholesale merchandise, any product that gets returned is sent back to your address, allowing you to review it again, refurbish it if needed and put it right back on the market until it finds the right buyer.

Is There a Downside to Buying Wholesale Merchandise?

If you are buying from wholesale suppliers, make sure you always buy wholesale lots that have a full manifest of the products contained in the lot. Never purchase wholesale pallets without the manifest because you might end up with a bunch of merchandise that you will not be able to sell. This is a sort of a safety flag for you as a buyer. If your source is withholding information or declining to provide you a manifest completely, it is better to walk away from that pallet, and indeed from the source altogether.

When it comes to buying through liquidation companies, people have major concerns over refurbished merchandise and customer returns.

It has to be mentioned that more than 30 percent of all products sold online get returned to the sellers for one reason or another. Very often packages return unopened because the customer did not like the color or the size of the product. So, although unused, such products end up being labeled as refurbished since they can’t be resold as new. For you, this means you are still getting a brand new product but at an even lower price.

When it comes to refurbished items or the ones that get returned to the manufacturer because of faults, for example, electronic gadgets, there should be no issues when you are buying through a reputable liquidation auction.

As a result of exclusive contracts liquidators have in place with retailers and manufacturers, each refurbished product needs to pass strict tests that guarantee it is functioning as new before it can be sold. This is backed up by at least a 90-day warranty for any refurbished product from the seller themselves and an even larger warranty from the manufacturer. Why do these products get such a warranty? Because neither the manufacturer nor your source would like to see the product return too many times, because this costs them time, money and the reputation they have worked hard to build up.

So, if you are careful and work only with top wholesale suppliers and top liquidators, you will be able to get the best products for the lowest prices. This will result in a significant increase in profit over your previous dropshipping business.

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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.

View Henley’s Bio on YouTube.