How To Buy Cheap Wholesale Products for Resale
Buying cheap wholesale products for resale isn’t exactly straightforward.
There are billions of wholesale products out there – how can you identify one worth investing in? Plus, there are numerous marketplaces online, but which is the best site for wholesale products?
If that’s not confusing enough, there’s a lot to think about when buying wholesale products. Should you purchase locally or from abroad? How many units should you buy? How can you avoid wasting your hard-earned cash?
Read on to find out.
In this article, you’ll learn how to spot the best wholesale products to sell, where to buy wholesale products, and some best practices to follow when making a purchase.
Let’s dive in.
How To Choose the Best Wholesale Products for Resale
Before you start sourcing products, you must know what makes a product a good bet. So, what do profitable products look like?
Here are eight characteristics of top wholesale products – if you manage to tick all these boxes, you’re likely on to a winner.
1. Big Margins
First things first: Look for wholesale products that have good margins.
The margin is the difference between how much a product costs you and how much you can sell it for – the bigger the margin, the more profit you make.
A good profit margin for online retailers is around 42.53 percent, according to NYU Stern School of Business. In contrast, brick-and-mortar retail stores tend to see lower profit margins of about 24.27 percent.
When you purchase wholesale goods in higher quantities, you can usually get them at a lower cost-per-unit – and, as a result, increase your margin. This concept is referred to as economies of scale.
When researching wholesale products, use Shopify’s profit margin calculator to see if you’ll be able to turn a handsome profit.
2. Medium Price Point
Even if you find wholesale products with a big margin, it can still be challenging to turn a healthy profit if the price point is too low.
For example, if you purchase pencils for $0.10 and sell them for $0.50, you’ll make $0.40 a piece – that’s a whopping 80 percent margin. However, you’d have to sell tons of pencils to make a good income.
Additionally, if the price point is too high, you’ll likely find it harder to land sales. For example, it’s probably more challenging to sell a jacket for $500 than for $50.
A good rule of thumb is to sell products for between $15 and $200. Check the suggested retail price before buying wholesale products.
3. Low Competition
If the market is saturated – that is to say, if many businesses are selling a particular product – it can be tough to stand out from the crowd. For this reason, it’s best to buy wholesale products that have low competition.
Check platforms like Amazon to gauge the competition by seeing how many businesses are already selling the product.
4. Strong Demand
Once you find wholesale products with low competition, check whether there’s adequate demand for them. If only very few other businesses are selling a particular product, it may be because nobody wants it.
A neat trick to determine the demand for a product is to use the Facebook Ad Library.
This tool allows you to search for live ad campaigns on Facebook. If you can find a few businesses running plenty of ads for a product, there’s a good chance that the product is making them money – and therefore, there’s a strong demand.
If you’re struggling to find wholesale products with low competition and are in-demand, try searching for more unique, niche products.
Typically, unique and innovative products have less competition. Plus, the product’s uniqueness will differentiate it from others on the market, which can increase demand.
6. Small and Lightweight
Profitable wholesale products are often small and lightweight. Why?
When you buy wholesale products from the other side of the country – or the other side of the world – you need to factor in the cost of shipping. If you run an ecommerce business, you also need to consider the cost of shipping products to customers.
Small, lightweight products are usually cheaper and easier to ship. For this reason, many businesses follow a simple rule of thumb when buying wholesale products:
The product should be small enough to fit into a shoebox and weigh less than 2kg (4.4lbs).
While it’s possible to make money on larger, heavier items like furniture, you’ll likely run into more logistical problems.
Another thing to carefully consider is the product’s durability.
For example, shipping handmade glassware or Bluetooth speakers from Indonesia to the United States is a lot more challenging than shipping jeans. The glass could break, and the wires inside the speakers could come loose.
Again, there’s money to be made with products like these, but there’s also more risk of breakage – and if you sell products online, there’s also the risk of unhappy customers.
Durable products with few moving parts are easier to transport. Plus, they’re less likely to go wrong once in the customer’s hands, which will help reduce your returns rate.
Whether it’s Christmas, Summer, or the Rugby World Cup, there are many products you can sell to cater to holidays, seasons, and events.
However, it can be tricky to get the timing just right. Often, planning a seasonal ecommerce strategy takes months – if not a full year.
Plus, even if you work hard to start selling Christmas decorations, your sales will plummet when the holiday season is over.
So, if you’re relatively new to buying wholesale products to sell, avoid seasonal products and opt for evergreen products instead. This way, you can grow your business steadily all year round.
Where To Buy Wholesale Products: 7 of the Best Online Marketplaces
Wondering how to find wholesale products online? Here are seven places to buy the best wholesale products for sale.
Handshake is a new breed of wholesale marketplace (if we do say so ourselves!) featuring only the best, handpicked, one-of-a-kind brands.
Brought to you by the ecommerce platform Shopify, we’re here to help you fill your store with on-trend, unique products that your customers will love.
Handshake is also a great place to find some of the best American-made wholesale products online.
Alibaba is the world’s largest B2B marketplace globally, serving more than 190 countries and regions. This Chinese company is arguably the best place to find suppliers in China.
eWorldTrade provides a handful of ecommerce services to facilitate trade between manufacturers, wholesalers, and retailers. You can post a listing on the site to tell suppliers about your needs.
6. Worldwide Brands
Worldwide Brands (WWB) is one of the oldest wholesale supplier directories online. It lists more than 8,000 suppliers and costs $299 to gain lifetime access to the directory.
Made-In-China is a wholesale marketplace focused on connecting Chinese suppliers with international buyers. It lists products in 27 categories and 3,600 sub-categories.
How To Buy Products Wholesale Online
Once you’ve identified the wholesale products you want to buy, what do you need to do before you make a purchase?
Here’s a five-step quick-fire guide that will show you how to buy wholesale products online to sell from home.
1. Choose To Source Locally or From Abroad
First, decide whether you want to buy wholesale products from your home country or abroad. There are pros and cons to both strategies.
For example, buying American-made wholesale products may be slightly more expensive than purchasing them from another country like China.
However, the logistics are much easier to manage when sourcing locally as there’s no need to worry about duties, tariffs, regulations, freight forwarders, etc. Plus, communication can be challenging when working with foreign suppliers due to time zone differences and language barriers.
Here’s how to decide: Do you have experience buying wholesale products online from abroad? Or do you have the money to invest in sourcing partners and customs brokers? If so, you may want to source products from abroad to take advantage of the potential cost savings.
However, if you’re new to buying wholesale products, consider sourcing products locally for now.
2. Identify a Few Promising Wholesale Suppliers
Now comes the fun (and challenging) part: finding wholesale product suppliers.
It can take time to find a great wholesale supplier. However, securing a high-quality, communicative, and reliable wholesale supplier is crucial to your long-term business success.
Head to your chosen wholesale marketplace and find a few promising suppliers that may be a good fit.
3. Verify Wholesale Product Suppliers
Before you take the plunge and buy wholesale products, it’s a good idea to verify suppliers to ensure they’re legitimate and trustworthy.
Unfortunately, there are many unscrupulous ”suppliers” listed on wholesale product websites. Some of these suppliers will provide very low-quality products, others are uncommunicative, and a few are straight-up scammers.
So, tread carefully.
Make sure to verify a supplier by asking for official documentation and verifiable testimonials before you place an order.
That said, you can skip this step if you use a wholesale product site like Handshake, which handpicks and verifies every supplier listed on the platform.
4. Verify and Test the Wholesale Products
Once you’ve verified the supplier, you should verify the wholesale products themselves. The best way to do this is to order samples.
Evaluate the products – what do the products look like in-person? How do they feel? Test the products to ensure they’re durable and of high quality.
5. Determine the Quantity You Want to Purchase
Finally, work out how many units to purchase.
When buying cheap wholesale products for resale, typically, the more you buy, the lower the cost-per-unit. So, it can be tempting to place a large order from the get-go to increase your margin.
However, it’s always best to validate a product before placing a large order. In other words, it’s a good idea to make sure your target market will love the product before you invest too much.
So, consider ordering a small batch of products first and see how they sell. If they fly off the shelves, you know it’s worth investing in more. If they gather dust, you haven’t wasted so much money.
Summary: Buying Wholesale Products Online
There’s a lot to consider when buying wholesale products, but success starts with choosing a winning product. In summary, here are eight favorable characteristics of wholesale products to look out for:
- Big margins
- Medium price point
- Low competition
- Strong demand
- Small and lightweight
Once you find a great product, decide whether to source it locally or from abroad. Then, when you’re ready to find a supplier, start searching for wholesale products online using one of the many platforms available.
Make sure to do your due diligence and verify suppliers before placing an order. It’s also a good idea to order samples to ensure the product is high-quality and durable.
Finally, buy a small batch of wholesale products and see how your target market responds before investing in a larger order.
What kind of wholesale products are you searching for? Let us know in the comments below!