Getting your resale business off the ground requires a lot of preparation and hard work. But knowing the most critical elements you need to put your energy towards can help make the process easy and efficient.

If you’ve been looking for resources to learn about buying wholesale products for your resale business, then you’re in the right place!

Keep reading to learn about buying wholesale products to set up your resale business. 

1. Pick a Product to Resell

While you may already know a bit about the product you want to sell, diving deep into all the nitty-gritty details is an integral part of the preparation and research process. What type of product you’re selling will influence your choice of supplier, capital investment, pricing strategy, selling platform, and more.

Here are some things you can start thinking about the product you want to sell:

●      Average reselling price of the product

●      Market demand: evergreen vs seasonal products

●      The profit margin you can earn

●      Shipping, storage, packaging, and other inventory-related expenses

●      Ease of transport and storage: weight, size, and durability

●      And more. 

2. Conduct Market Research

The purpose of conducting market research after selecting your product is to understand the ins and outs of the industry, its trends, and consumer preferences. You need to learn the best distribution channels, who your competitors are, and the best approach for selling and marketing.

After conducting a broad market demand study, you can narrow your scope and focus on your target market. Look at what the most popular retailers and resellers are doing, the suppliers they work with, and the platforms they sell on.

It is vital to research competitors selling similar products in your region or to a similar target audience. What pricing strategies are they using, and how much profit are they generating? This research should help you develop your own business strategy and a unique selling point that works for your brand.

3. Find Wholesale Suppliers

There are plenty of ways to look for a supplier; some are better than others.

We suggest looking at B2B marketplaces that source their inventory directly from manufacturers. You can browse extensive online catalogs at this type of wholesale marketplace, and enjoy a very simple ordering process. They offer a wide variety of high-quality products, bulk order discounts, inspection reports, and many other features to your advantage.

You can also look for wholesale suppliers on these platforms:

●      Online directories or searches

●      Local or regional trade shows

●      Wholesale directories

●      Social media platforms

●      Your local chamber of commerce

●      Industry newsletters, magazines, or directories

Once you have a list of promising suppliers, you can consider their offers, set your priorities, and narrow down the list. Here are some factors you need to know about your chosen suppliers:

●      Inventory size and variety of products

●      Product quality

●      Pricing, shipping costs, and bulk discounts

●      Return policy

●      Minimum order requirement

●      Lead times

●      Customer service

●      Ready-to-ship inventory

●      Customer reviews and referrals 

4. Obtain Necessary Licenses and Certificates

Depending on your state of operation, selling platform, and industry, you’ll need to obtain some business licenses.

Here are some you should learn more about so you can open your business:

●      Business License

●      Sales License

●      Employer Identification Number (EIN)

●      Sales Tax ID

●      Reseller’s License/Wholesale License

You can contact your state’s revenue department to complete all the requirements to open your reselling business. 

5. Prepare Your Storage Space

Before stocking up on inventory, you must prepare your storage space. It should be located in a convenient spot that you and your suppliers can easily access. The shorter the distance, the smaller the shipping fee, and the faster your order fulfillment.

Make sure the storage space is large enough, and not just to stock your inventory. Allot areas for carrying out administrative processes as well.

6. Set Up Infrastructure for Inventory Management

Once your storage space is ready, you can prepare a plan to manage the inventory.

Set up a sorting and labeling process for your products once they’re delivered. A robust inventory management software program will help you keep track of items from the moment you receive them from the supplier until you send them out for delivery. 

7. Set a Budget and Pricing Strategy

Buying wholesale products at low prices allows you to make a profit by selling them at a higher price. But how much profit you make involves many complex elements.

First, consider your budget and the amount of capital you can invest. Analyze the market selling prices along with shipping costs, packaging, and storage fees. Then calculate the profit margin you can potentially earn at certain price points.

Try different pricing strategies to balance audience demand with revenue.

8. Build Your Website or Open Your Store

Next, prepare your physical or online store. Set up a merchant account to accept payments and a customer service team to handle queries and complaints.

You must also decide the right number and type of platforms through which you can sell your products. We suggest selecting a few popular selling platforms for maximum exposure.

9. Check Sales Forecasts and Market Trends

Before you place an order for wholesale products, check sales forecasts and market trends. Ensure the manufacturer isn’t set to release an update for the product you’re about to buy.

Choose products with strong and consistent demand forecasts for the next sale season and beyond.

10. Place an Order for a Sample

Some suppliers provide trial periods during which you can try their products and services before signing a contract. You can request a small paid sample if the supplier doesn’t offer trials.

Samples or trials will give you firsthand information on the quality of products, order processing, delivery, customer service, and other features. You can negotiate the contract terms if some details don’t work for you.

You’re now ready to place an order for a bulk shipment and sign a long-term contract with your supplier.

Wrapping Up

This is how you can prepare your resale business and finalize the wholesale sourcing process. Use this guide to get clarity on the buying process from start to finish and put all your worries to rest.

Have a great business year ahead!