Buy Wholesale
There are opportunities to buy almost anything at wholesale prices, whether you want to buy everyday items or specific products for resale. Once you begin your search, you will see that opportunities to find wholesale buys exist almost everywhere. The process to get started is easy and your contact list of wholesalers will grow quickly.
Steps
- Get your necessary tax documents and licenses in order. In most states, you'll need to obtain a tax ID and/or license because the wholesale products you are buying are often not yet taxed. Before you begin looking for the best wholesale deal, try to get the following so you can quit worrying about legal and get serious about making money:
- Obtain a federal employee ID number from the IRS. The application form is available online at the irs.gov website. You are eligible to get this permit as a sole proprietor of a business.
- Get a federal and state tax ID number applicable to your residence. Request the federal ID first, because you may need it in order to secure the state tax ID. Afterwards, search the Internet for your state's Department of Revenue, where they will be able to direct you to the right department.
- Apply for a vendor's license from your state after securing the ID numbers you need.
- Decide how much you want to buy. In wholesale, volume is absolutely important. That's because the more you agree to buy wholesale, the lower the unit price. Business in wholesale is often referred to as "volume-centric."
- Balance your supply and fiscal needs with inventory constraints. In other words, it's great that you got a deal on 2,000 laptop computers, but where are you safely going to store them while your orders trickle in?
- Find and research your wholesale suppliers. There are plenty of wholesale suppliers if you know where to look. Here are a few of the most popular places people seek wholesale deals:
- Do a thorough internet search. Search first by the type of product you're looking for, followed by your zip code to localize the search. Comb through the more local data, paying attention to classifieds, online associations, and wholesale directories.
- Look for wholesale trade shows. A little more expensive and perhaps less efficient than a simple internet search, trade shows are nonetheless repositories for great deals (and the much-touted, oft-maligned networking).
- Ask brand manufacturers. If brand manufacturers can't sell to you directly (they usually only sell at very high volume), you may be able to ask them for referrals to other wholesalers or distributors.
- Network to find deals. Talk with other people who have successfully bought wholesale products and made deals to grow your list of contacts. Unless they view you as direct competition, they will often share their associates' information.
- Investigate joining professional groups offering wholesale prices. These groups may be listed in industry publications or websites or may be affiliated with the company where you work. Such organizations often extend a discount to members.
- You may think that paying for access is a rough transaction, but the membership fee is worth it when you weigh that amount against what you gain.
- Buy wholesale lists at your own risk. Wholesale lists are exactly what they sound like — lists of "trusted" suppliers and distributors you can use, for a fee. These lists sound nice in theory, until you realize that they are sometimes old and often outdated. Try to find your first leads without paying for them.
- Start off with a sample unit. Instead of trying to hawk 1,000 units of something, try selling 20 units of the same thing first. Lots of wholesale suppliers will let you buy sample or test units at still-discounted prices. This gives you the leeway to try to sell the units on your own, in real conditions. If the items don't sell, you've saved yourself from a huge disaster. If they sell like hotcakes, it'll be easy to re-up, and you can be confident in your ability to stay out of the red.
- Don't be afraid to ask for perks. Perks make the world go around, and the wholesale world is no different. Ask for an opening discount on any order you potentially make with wholesale suppliers; fierce markets will cause suppliers to compete for your business, making an opening order discount a nice show of appreciation, and a savvy business move to boot.
- Sign up for email subscriptions, where discount and close-out items may be mentioned. Be sure to ask, however, why these items are on discount or being discontinued. If they're being discontinued because they simply don't sell, it may not be a great move to buy a ton of units.
- Pay attention to how you'll ship your items. Unless you have a freight business on top of your burgeoning wholesale business, you're going to need to find a way to ship the units over to your inventory. When you do, stick with trusted names in the freight business; you'll find it's expedient to pay a few extra bucks for a trustworthy service.
- Finally, do your due diligence before you finalize any order. Clarify the return policy, solidify processing time, and take advantage of any discounts. Then, don't be afraid to negotiate pricing terms, especially if you find a better deal elsewhere. Know when to expect the delivery. If you're ordering units in excess of $50,000, consider consulting a lawyer to review the contract before signing it and making it final.
Tips
- Use a separate bank account and credit card for the wholesale purchases if you are reselling items as a vendor.
- Know the retail value of every item you want to buy before purchase. This way you will not pay too much thinking the price was wholesale. Check online, if necessary, by searching for the product in order to get several price comparisons.
Warnings
- Beware of online auctions that originate from another country. The merchandise may be inferior and you need to make sure you know the fees before you commit to high shipping costs.
- Online auctions that offer you the opportunity to purchase a high-dollar product for pennies on the dollar make their money on bidding. There, the bidders pay a set fee every time they bid on.
