Any business in its simplest form means to buy low and sell high. Likewise, well before starting your business, you must’ve searched extensively and found multiple sources to buy your products or merchandise. Almost always these sources are wholesalers.
The majority of businesses do not build or produce their own goods. Rather, they purchase their goods from wholesalers. Wholesalers are not only fantastic providers of merchandise, but their wide variety of products will become very convenient to you as your business grows and expands.
Buying wholesale can certainly seem a little cumbersome at first. For more than a decade, we’ve been assisting businesses to improve their revenue and we think the following tips can help your business as well.
What does it mean to purchase in bulk?
Purchasing at a retail store and purchasing at a wholesale store are two separate things. You’re purchasing from the middleman between your retail business and the manufacturer when you buy products from a wholesaler. Wholesale purchases are made in volume, and as a result, you receive a cheaper price. After purchasing things from a wholesaler, you can resell them at a higher price at your own business to make a profit. Customers will pay this higher price, which is known as the retail price when they purchase in your store.
The margin is the difference between the retail and wholesale pricing. It refers to the amount of profit a retailer makes on a sale. The retail price varies a lot amongst businesses, and there are a few various pricing tactics you may use to figure out what the optimal retail price is best suitable for you and more importantly—your customers. After that, you’ll be able to calculate your gross profit.
Revenue – Cost of Goods Sold = Gross Profit (COGS)
Revenue is equivalent to the retail price you charge your consumers in the formula above. COGS (cost of goods sold) is a high-level measure that includes all variable expenses connected with manufacturing and selling items. Fixed costs are not taken into account while calculating gross profit.
The amount of money you make from a sale is referred to as gross profit. To make a profit, retailers frequently “markup” or boost the price of goods they purchased wholesale. Buying a t-shirt at a wholesale price of $2 and then selling it for $10 in your store is a good example.
In this situation, the markup is $8, and the sale’s gross profit is $8. When purchasing inventory for your store, keep this in mind. If your wholesaler’s pricing is excessively expensive, it will have an impact on your company’s total profitability.
Where can I find a wholesaler?
A wholesaler can be found in a variety of ways. A smart place to start is your local chamber of commerce. If you have contacts with other business owners, crowdsourcing information from your network is another wonderful way to determine which wholesalers to partner up with and which ones to avoid. Alibaba is a popular online marketplace with thousands of retailers, wholesalers, and manufacturers if you’re seeking manufacturers in other countries.
Manufacturers can also be found on sites like eBay and Etsy. While those marketplaces serve different populations in general, there is some overlap. It’s quite simple to communicate with suppliers from all around the world thanks to the messaging tools on all platforms.
Choosing the correct merchandise for your store
Learning how to buy wholesale goods is a crucial step in boosting your profitability and inventory. That’s why it’s crucial to perform the math to ensure you’re buying and selling items at prices that are not only profitable for your business, but again, more importantly—attractive enough for your customers.
You can crunch the figures with the help of our POS system. Work with wholesalers who sell high-quality goods, are dependable, and can help you expand your business. You’ll be well on your way to making smarter decisions to grow your business if you continue to ask the appropriate questions and have the data figured out.
If you’re looking for wholesalers and suppliers, you’ve come to the right place. Without leaving our POS, you can order directly from industry-leading vendors using CellSmart’s Supplier Market.