How to Know When You Have Found the Right Wholesale Supplier? Part One: Right Price

Have you searched for a wholesaler but are not sure whether you have found the right one (or which one to select)? Often, you are bombarded with many potential wholesale suppliers with fantastic range of products to sell. So how do you know for certain when you have found the right wholesale supplier for your business? This series of article will cover 3 key areas that you need to look at when making that critical decision: right price, credibility, and product match. For the first part, I will talk about the right price.

Here are the links to part two and three:

• Part Two: Credibility
• Part Three: Product Match

Right Price

When you sell a product, price plays an important factor. You can’t possibly be in business selling goods without making some profit. For your business growth’s sake, finding a wholesale supplier that charges a reasonable price for their products, will mean that you can make a larger profit for that product.

If you are selling a unique item, and there is a demand for that product in your niche market, charging extra for that product would be a smart thing to do, since there is a lack of competition. However, that is unlikely the case in most instances. These days, its hard to find a really “unique” product. More often, that product is just a variation of current products available in the market, such as a different color, different taste, different packaging, etc.

If what you are selling is not unique, or is only a commodity, you need to survey at what price your neighbours are selling your product. Don’t be lazy. Do your homework. When I say neighbours, I really mean other businesses close to you selling products similar to the one you have in mind. For example, let’s say you want to sell handmade soaps. You know that there is a retail shop just around the corner at your hometown, selling bath and beauty products, one of the items in their inventory is handmade soap. So at what price are they selling? Check it out and write it down for reference.

Then, when you are looking for a wholesale supplier, take into consideration of your market survey research on price. If a bar of handmade soap is retailing for USD$3 and you found a wholesale supplier selling at USD$2.50 would you still buy? That’s not including the shipping and other miscellaneous charges that you need to take into consideration. Making sure that you make a healthy profit margin is critical to your business’s success. If you are happy with just  a 50cents profit, that’s fine. Especially, if you are reselling in bulk, and would make extra profit by selling in larger quantities. But if you are selling in a normal retail fashion, 1 or 2 pieces that is, then making a 50 cents profit is not the right way to go.

Some wholesalers will give you a different wholesale price depending on the quantity that you have ordered. Let’s say you want to buy a bar of Aloe & Celendula Natural Soap, which the supplier is selling for USD$2 for one. But, if you raised your quantity to 10, the price gets further reduced to USD$1.50. The price for orders 60 and more is USD$1.30, and for orders 120 bars or more, the price is only USD$1.25. That’s a 37.5% savings for each bar of soap, not bad at all.

However it is worth mentioning, a wholesaler that charges either too high or too low a price may make you suspicious. Is this company really legitimate? Bottom line is, check the retail price, and make sure the wholesale price that you are getting, is reasonable enough, and will enable you to make a healthy profit margin.

Conclusion

You must buy at the right wholesale price just as you must sell at the right retail price for your business success. Les Brown (a designer) describes the price factor when selling his goods this way:

Our things are not overpriced. I have travelled a lot and I have seen prices of good garments sell for a lot overseas. For instance, overseas you will see linen pants for US$250, but no one will buy a linen pants for that price out here. So I know that price is not the issue.

Coming Up

In part two of this series, I will look into how credibility is a factor that you should pay attention to when you buy wholesale from suppliers.

One Response to “How to Know When You Have Found the Right Wholesale Supplier? Part One: Right Price”

1. Agidoo Press » Blog Archive » How to Know When You Have Found the Right Wholesale Supplier? Part One: Right Price Says:
   February 6th, 2009 at 7:30 pm

   [...] the original post: How to Know When You Have Found the Right Wholesale Supplier? Part One: Right Price Tags: accessories, article, business, buy-wholesale, dropshipping, price, right-price, [...]

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