Any new online retailer looking to drive their sales up and build their customer base does not have the inventory to suffice every customer’s needs. However, you will have to start somewhere. This is when investing in cheap wholesale products for resale can come in handy.
In addition, most online shoppers are always looking for great deals. This is also the main reason why the e-commerce industry is booming. This only goes to show how important it is to find cheap wholesale items that can help boost your profits, especially if you are new here. However, buying wholesale products is not exactly easy.
There are a number of sellers and products out there, and identifying the one worth investing in can be challenging. Understanding what a profitable investment looks like, is very important to take a suitable investment. All of this starts with looking for the kinds of products that will give you great returns. Fortunately, there are some tips that can significantly help you find wholesale products for resellers like that.
- Big Margins:
The first indication of a great product is massive margins of sale. A margin is essentially the absolute difference between the purchase cost and the selling costs. This means the bigger the margin, the greater the profit.
According to studies, a good margin is anything between 40% to 50%. Compared to brick and mortar stores, the average margin is much lower at about 20%. This is also the reason why becoming an online retailer is much more preferred in today’s time.
When you purchase wholesale products in higher quantities, you will get a much lower per-unit cost, increasing your overall margin. This is a concept known as economies of scale, which you should learn before starting your venture.
- Medium Price Point:
Even after you have found products with ample margins, it can still be a tough task to convert a sale into a healthy profit. This is when selecting the right price point is essential. With a price point too low, you might not have enough margin, while with a higher price point, you will not be able to make enough sales.
It is vital that before you purchase your wholesale product or put them up for sale, conduct market research. This will give you a fair idea of the prices offered by the contemporary companies in the market. With that data, you can easily find the sweet spot. A good rule is to start by selling products between $15 to $200.
Keeping these pointers in mind can ensure that you invest in the right stock and make a profit out of it. With these, you can avoid making any wrong investment, plan your investment and answer other important questions regarding the purchase.
Once you have made your decision, you can search on Alibaba for all kinds of wholesale deals. There, not only will you find a wide variety of products, but also different attractive rates.
However, before you finalize your purchase, make sure to compare all prices, shipping charges, and inventory allocation costs. This will help you know the overall cost of acquiring the products, helping you decide on a fair selling price as well.
