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Copyright 2005 Richard Grady
As most of you know, I have worked with wholesalers both on and
offline for many years and a number of my websites are based
around helping people find and trade with wholesale suppliers.
I receive a fairly constant stream of emails from customers and
potential customers asking various questions about buying from
wholesalers and this has been the case for the past few years.
These questions always increase in volume around this time of
the year as people try and grasp a bit of buying madness that
surrounds Christmas. In view of this, I would like to throw a
few do's and don'ts out there which will benefit anyone new to
trading.....
1. One of the most common 'gripes' I get from people is that
they can't find low prices for popular products online. It never
ceases to amaze me how little effort some people want to put
into making money....
The fact is that it is highly unlikely that you will find the
best prices for the majority of products online - this is
especially the case in the UK as many of the larger wholesalers
don't even have websites. More often than not, an online
wholesaler is merely someone that has gone to an offline
wholesaler and purchased a load of stock to mark up and offer to
online buyers. If the wholesaler you are buying from online
doesn't have a trade warehouse or premises that you can visit
and purchase from, there is every possibility that they are not
a wholesaler at all but simply a middleman.
Cut out the middleman and pick up the phone or better still,
visit prospective suppliers and build a relationship with them.
Buying wholesale stock online may be convenient but in most
cases you won't be getting the best deal and you may also be
missing out on additional stock that isn't advertised online.
Note that this isn't so much the case in the US where many big
wholesalers do have excellent online 'warehouses' - we are yet
to catch up in the UK :-(
2. eBay is an excellent venue for buyers and sellers BUT it is
also the biggest marketplace in the World. This means that if
you want to sell there, you will be in competition with some of
the largest traders in the World. Don't be surprised if you can
buy products cheaper on eBay than you can from your local
wholesaler. Chances are that the seller has negotiated a massive
discount for buying in huge bulk or they may even be importing
the products themselves (or using their buying power to source
direct from the manufacturer). Unless you are in the position of
being able to buy in similar quantities, you simply won't be
able to compete on a like for like basis with many popular
product lines.
3. People often email me asking where they can find a wholesaler
for a really specific, niche item (for example horse-riding
saddles). With something so specific, it is highly unlikely that
you will find an individual wholesaler that deals solely in that
product. Often time it will be necessary to make your wholesale
purchases direct from the manufacturer. Therefore, if you are
having trouble locating a supplier for a particular item, don't
be afraid to pick up the telephone to the manufacturer and
simply ask them who their main distributors are.
4. I've said it so many times before but I still get emails
about this one - avoid products such as DVDs, computer games,
electrical goods etc like the plague. The profit margin is tiny
and you won't be able to compete with the bigger sellers. I
don't know how much clearer I can make it - unless you want to
work for peanuts, just steer clear of these products. The only
exception is if you can add value in some way and differentiate
yourself from the other larger sellers.
5. Remember too that if you are struggling to find a product at
a particular price, there is every possibility that what you are
looking for just doesn't exist. I have lost count of the number
of times people have emailed me asking where they can buy
'product A for £x each' and when I have asked them why they
think they should be able to buy it at that price, they reply
that 'it sounds about the right sort of price for a wholesale
purchase'!! Seriously - they have just made up the figure in
their head that they 'think' they should be able to buy at!!
Usually in these situations, the figure is wayyyy off.....
6. As with everything, buying and selling products takes a bit
of effort (in fact, it can often take a lot of effort) but those
willing to put the work in are the ones that benefit financially.
If you want to sit at home and buy stock online to resell on
eBay, then don't be surprised if you find yourself working hard
for minimal profits. If however you are prepared to visit a few
wholesalers, check out the latest stock as it arrives, build up
a relationship and negotiate a great deal with your new business
partner, then you have every right to expect to see a good
return on your investments....
About the author:
Richard Grady has been helping people earn online since 1998.
eBay sellers find wholesalers for free at:
http://www.wholesale118.co.uk (UK) &
http://www.thewholesaletrader.com (US).
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