Buying in bulk to resell is a practice that has existed since the dawn of commerce. It is an exchange in which a seller and a buyer make a profit. But is it really worth it today?
In this article we are going to explain how buying wholesale for resale is a profitable and attractive business option for entrepreneurs and traders. In addition, we are going to tell you what it consists of, what the advantages and disadvantages of implementing this modality are.
Now, let’s analyse the different factors that come into play, so that you can understand the context of this type of modality and make the best decision according to your business strategy.
Buying wholesale for resale: what is it?
Buying in bulk to resell is a business model that involves two factors:
purchases of large quantities of products,
and a lower price per unit.
A bulk purchase is an exchange in which a seller and a buyer make a profit. The seller, on the one hand, profits from the high volume of sales. The buyer, on the other hand, pays a lower cost per unit.
And what is resale? Resale is known as the action of selling an item for a higher price than it was bought for.
So, when we talk about buying in bulk to resell, we are referring to the action of buying products in large quantities to resell them in an online or physical shop to the end consumer for a higher cost in order to make a profit.
Now, how do you know if this is the business you want to implement? Before making that decision, define what types of products you are going to market and create a robust and sustainable model.
Then, establish whether your business will be based on in-house production, wholesale purchases or dropshipping, for example. Everything will depend on how you want to start your business in order to reach the goal: the success of your brand!
💡 If you already have an online shop or you are thinking of creating one to buy wholesale and resell, create a Tiendanube for free!
The benefits of buying in bulk
Let’s start by understanding what are the most relevant benefits of buying in bulk:
1) Lower costs.
Buying more units translates directly into lower costs. Not only will your prices be competitive, but you will be able to negotiate even more depending on the amount you decide to buy.
Logically, the larger the purchase, the more bargaining power you will have with suppliers.
🚀 If your next step is to continue marketing these products, we invite you to learn how to sell products wholesale.
2) More competitive prices
The option of lowering your costs will turn into the possibility that the final prices of your products (i.e., in front of your customers) will have more accessible values.
3) Higher margins
Another result of lower wholesale costs is the possibility of higher margins. This translates into higher profits for your business, which you can reinvest in other products or promotional campaigns.
4) Make sure you have immediate stock
Buying in bulk also has the benefit of keeping a certain amount of stock for the season, for example.
In this way, you will ensure that the inventory is sufficient to sell uninterruptedly. Keeping this record will help you to avoid running out of a product or having to go out in a hurry to buy it again.
5) Support manufacturers and workshops
If you want to start your own online clothing shop, for example, but you don’t have the resources to produce your own merchandise, the ideal thing to do would be to hire the services of workshops, manufacturers or modellers.
In this way, you will make your clothes with a unique style that reflects the concept of your brand. In addition, you will help other entrepreneurs like you to grow within the industry.
6) Save time
One of the most precious commodities today is time. By avoiding smaller purchases, you will free yourself from having to go to every supplier, evaluate quotes, negotiations, payment and delivery terms, etc.
Bulk purchasing allows you to do all of this on a one-off basis at a time that you define, such as seasonally, for example.
Bulk purchasing options
When it comes to buying in bulk for resale there are different business strategies that can be applied. It all depends on where you are going to put the focus on your brand.
Let’s look at the most common options:
Buying finished products in bulk
This refers to the wholesale purchase of finished products that are ready to be sold. This means that no additional production process is needed.
An example of this could be a bookstore that buys books as finished products ready to be sold. If you opt for this alternative, you can try Fierro, the specific management system for bookshops, publishers and distributors.
One advantage of the finished product strategy is that you can select to buy only items that are already known to be successful and work with your customers.
It’s a different kind of bookshop, but look how exciting the story of this brand is!
Buying wholesale products to intervene
Another option is to buy items that, unlike the previous ones, are not ready to sell but need some kind of added process.
One idea is to buy a basic product, make an intervention that adds value and differentiates it from the competition.
For example, when buying clothing in bulk for resale, plain white T-shirts can be purchased in quantity. Then a printing process can be carried out to transform them into a unique product of your brand.
How to buy wholesale products for resale in your online shop?
Wholesale purchasing is a simple, straightforward and low-risk business model. For this reason, it stands out among the alternatives for e-commerce entrepreneurs.
The added value is that you will buy and resell products in your online shop that have a good reputation in the market.
For this purpose, research and select manufacturers or suppliers that offer a variety of items and brands available for wholesale sales.
Before choosing a distributor, manufacturer or supplier of wholesale products to resell, analyse the following points to make the best decision:
the quality of the product,
experience in the field,
and commitment to social responsibility.
Find out more:
What products are profitable to resell?
Here is a list with some ideas of products to buy wholesale and resell in your online business:
Accessories and jewellery
Cosmetics and beauty products
Purses and backpacks
Tumblers and thermoses
💡 If you want to get more ideas to buy wholesale, we share with you this article with the best products to resell in Argentina.
What does wholesale clothing consist of?
Let’s continue with the example of having your own clothing business, one of the fastest growing areas of online sales.
In the first six months of 2021, e-commerce turnover grew by 101% according to data from the Argentine Chamber of Electronic Commerce (CACE). Of that percentage, the apparel category ranked second in terms of interest; a category that, in 2020, ranked number four.
Today, online shops and social networks have become one of the main channels of communication and promotion of the products of the big brands and also of the entrepreneurs who work in the clothing category.
In this way, the market is democratised and everyone competes on the basis of their company’s positioning, thus achieving the evolution of the local economy.
Let us begin by recalling that a wholesaler is an individual or a commercial entity that sells large volumes of products to retailers. Their mission is to liquidate stock in short periods of time.
Wholesalers of clothing know in detail how the product they sell works. It is a distribution channel that is highly consumed because of its effectiveness in being sold in large quantities.
In other words, the sales agreements made by a wholesaler are usually B2B and they obtain reduced prices from the manufacturers.
Where to buy clothes for wholesale
If there is one thing social media has done, it is to give small and medium-sized businesses access to showcase their product catalogue.
On Instagram, Facebook and TikTok it is easy to find clothes that are not only varied and locally designed, but also at prices that are, in many cases, affordable.
In addition to hiring the services of entrepreneurs, workshops, modellers or clothing manufacturers, you can also use platforms such as Mercado Libre. This is a national platform with a customer base that offers a variety of quality products.
Is it possible to buy wholesale clothing abroad?
The answer is a resounding yes. When it comes to importing and buying wholesale from China, AliExpress is also a good option to get products and resell them in your business.
This online retail platform was founded in 2010 and is owned by Alibaba Group, an e-commerce oriented company in Asia.
Initially, it focused on buying and selling between businesses (B2B). But over time they changed their services and offered direct sales to consumers, including digital payment methods.
Find out more:
Advantages and disadvantages of buying wholesale and reselling online
If you are considering launching your online shop and want to evaluate the possibility of buying in bulk to resell, we tell you the advantages and disadvantages of this type of marketing:
Advantages of buying wholesale
Competitive prices: as we mentioned before, you have to establish a good relationship with your manufacturer. This will ensure that you offer your items at a good price and that your business finances remain balanced.
Recognised items: in this business model you will have the option of buying profitable and quality products. One recommendation is to develop a digital marketing plan to create an effective strategy to promote what you offer on your website.
Saving money: Wholesale purchases represent an alternative to buy in large volumes and save money. In addition, your shipping costs are reduced when you receive your goods, unlike retail purchases.
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Disadvantages of buying in bulk
Physical space: Having a physical space is indispensable for storing your inventory. In certain cases, this is a point to take into account, especially if you sell delicate products such as frozen foods.
High investment: although wholesale purchases are affordable, it is true that in order to take your first steps in this world you will need to invest a considerable sum of money.
Market research: It may be obvious, but before starting a business, you need to carry out market research to understand the context of the sector. If you do not have the knowledge in the area, we recommend you to look for a professional.
Supply: nowadays there are many suppliers that offer their products wholesale. However, it is important to know how to choose items with high quality standards or manufacturers that comply with social responsibility.
How to differentiate yourself when buying wholesale
When buying wholesale, it is important to consider what added value your products or brand will have in order to differentiate yourself from the competition. Think that if you do not have exclusivity with your supplier, other people can buy the same items as you.
So, there are different ways to achieve that distinction that will make you stand out in a competitive market.
The first angle is to aim to differentiate your product. This goes hand in hand with having some kind of additional process on the merchandise you buy to give it that special touch.
A good example of this can be packaging. Having your customers receive your products in an original way can generate a different experience and motivate them to choose to buy from you over the competition.
A second angle is to focus on building your brand. This means that marketing and promotion strategies will be a priority for your business. In this case, potential consumers will choose you because they will recognise your brand positioning and will aspire to own something of yours.
For this, it is key to work with digital marketing tools such as the development of valuable content (either on social networks or a blog, for example) and online advertising (to reach the right audience segmentation).
Buying in bulk, then, can have great benefits for your business. The important thing is to have a good strategy to define what added value you can give to your brand and how you are going to promote it through your digital channels.
Remember that starting an online business in this way will also give you the opportunity to form teams and collaborative spaces in different areas such as production, marketing, digital design, clothing, photography and even in the purchase of raw materials.