How to Buy Wholesale Merchandise
Having a successful retail business depends greatly on offering the right product, at the right price, at the right time. Therefore, it is paramount to the success of your business to locate the best sources for those products. Once you know what products or product lines you want to sell, you can then locate the right wholesaler.
Starting Steps to Wholesale Merchandising
Before you buy wholesale merchandise for your store, visit a competitor or a store selling a product line similar to yours. Browse the store's product selection and note the brands they carry. Try to determine what products are selling well and which are in the clearance bin. If you visit a similar store located too far away geographically to be a competitor, that retailer may be willing to share with you the source of their wholesale merchandise.
Retailers can often find products to sell in their stores by searching online, joining buying groups, using library resources, and attending trade shows or buyers' markets.
Once your store is open and doing business, it will be easier to find wholesale merchandise to sell because suppliers will solicit you rather than you having to seek them out. Customers can also play a large role in finding suppliers as they can recommend products they would like to see in your store. Building a relationship with customers and seeking their feedback is crucial to ensuring that you are meeting their needs.
Trade Shows as an Information Source
A trade show is one of the best places to find a wholesaler. Retailers can find many suppliers serving the same markets with a range of product offerings. The biggest trade shows are held annually in Las Vegas and California, but there are local trade shows also.
Conduct an online search for tradeshows in your industry to find the nearest event. Websites like Trade Show News Network will have listings for shows happening in most states. However, trade shows are not open to the general public so be prepared to show proof that you are an established business. A resale certificate, tax id, business card, or some other form of license or permit should suffice.
Some manufacturers will sell their products at wholesale prices directly to the retailer. If they do, they may sell their products in large quantities or at a high minimum order. If you have a particular product you want to sell, contact the manufacturer and ask if they sell directly to dealers. If not, ask what distributors they sell their products through so you know where to buy the items.
Buying From Importers
Globalization has made importing products much easier. Retailers can purchase from importers or buy the products directly from a foreign company. Before using this type of supplier, do your homework. It is important to understand all the aspects of the paperwork, shipping time, product lifecycle, and all of the costs involved.
Distributors as Suppliers
A distributor generally sells a large variety of a certain classification of products. They must make a profit too, so their prices may be slightly higher than if the item was purchased directly from the manufacturer. Retailers can buy lower quantities with little or no minimum order. Some even offer free freight on orders over a certain amount.
Wholesalers and Liquidators
In searching for products at wholesale prices, you may find wholesalers that don't sell just one type of merchandise but many different products. Some wholesalers will act as liquidators and will sell closeouts, truckloads, and pallets of merchandise and even damaged goods. Before buying wholesale merchandise from this type of supplier, be sure you completely understand the condition, price, and terms of the sale.
Buying at Auctions
Retailers can find many bargains on eBay, the world's largest auction site. Just browse the Wholesale Lots category according to the type of store you have and you'll find tons of merchandise. Not all product prices on eBay are truly wholesale, but if you spend time watching the auctions and learn how to buy effectively, you are sure to find a deal. Don't miss out on live auctions for bargains on merchandise for resale.
Choosing a Vendor
Once you've located several sources of products, evaluate each vendor on a variety of factors. To offer the best merchandise to your customers, you'll need to buy from someone offering quality products, reliable delivery, and superior customer service. This information can be gathered through references, marketing materials, or by simply asking the sales representative how they conduct business.
Price and Other Considerations
One of your primary considerations, as you start your wholesale business, will center around price. Keep accurate records and review them regularly to track your costs and the prices you set to sell your goods. Stability exists when average prices are constant over time, or when they are rising at a very low and predictable rate. The retail price of a good or product is the cost when it is sold to the end-user for consumption and not for resale through a third-party distribution channel. While costs are a primary concern, there are other items you will need to consider as well.
Consider the space you lease for the selling of goods to consumers. When it comes to business, retailers have one overall goal, to sell merchandise—hopefully at a profit. That's why they focus on sales floor space, adequate parking for customers, and an overall image that draws in customers. Think about your hours of operation or business hours. This is the time of operation when the retail store is open to the public for the purchase of goods. Your hours of operation should match the buying habits of your customers.
This is the cost to the consumer to deliver goods. Generally, retail outlets ship by FedEx, UPS, and USPS (the least expensive and least common). The cost varies by location, product size, and how quickly the consumer wants the product. Some upscale boutiques will messenger goods.
Customer Payment and Conditions
Consider how convenient your payment system is and if you need a policy for processing refunds and returns. Also, think about your any terms you may set for higher-priced items such as lay-away. These plans should be as clear to your customers as they are to you.
No two retail stores have identical customer service. To provide excellent customer service you need to get the desired item into the customer's hand, give them the tools they need to decide to purchase quickly and enable them to purchase without effort.
Handling Returned Merchandise
Some returned goods will be resold by the same retailer for the full cost, but many will not. More likely, they'll end up in the mark-down bin selling for a fraction of the cost. Try to avoid returns in the first place by doing everything you can to make sure the customer is satisfied. Provide as much information as you can upfront regarding your products.
Good Planning Equals Good Results
Don't get discouraged. It may take some time, research, and several vendor negotiations to find the best merchandise to sell in your retail store. Starting any business will not happen overnight, but nothing beats being an independent business person. Finally, as a new business person, be sure you have an understanding of the laws in your state for your type of retail business and also understand how to go about filing an paying your taxes on your merchandising storefront.