The wholesale business can definitely make an entrepreneur financially well
off. Since a wholesale business has the opportunity to sell in bulk, every time a sale is made, the business can earn a significant profit Nick Sasaki.
But in order for the wholesale business to be able to sell in bulk, it must have products that its customers will want to buy. Customers of wholesale businesses are resellers who themselves must be able to satisfy the needs of their client base.
Depending on the market of the reseller, the needs of its client base can include
the need for work clothing, the need to eat, or even the need to be healthy.
What unites every reseller, is their need for hot merchandise that can make them money.
All retailers will give their hard earned money to a wholesaler that can in turn help them make money.
So if a wholesaler wants to capture the spending money of retailers, it must have
products that will make money for resellers.
A mistake that wholesalers often make is focusing on products that will make
them the most money. This idea is definitely a mistake, since retailers will only continue
to buy from suppliers if they are able to make money on the products supplied.
Therefore, the goal must be to find out which products make the most money for retailers, and then supplying those products.
Even if those products will only give the wholesaler a small profit margin, the wholesaler will gain in the long run since he will start experiencing a large volume of orders.
Think about how much money a wholesaler can make if he has 50 stores a week, ordering a total of 2,000 pairs of shoes, with a profit margin of $3 each.
That’s a gross profit of $6,000 per week, or $312,000 a year.
And that’s only by wholesaling the shoes!
The wholesaler can further expand his sales by providing the stores with
complimentary products such as socks, shoe laces, and shoe polish.
As long as the retailers can turn around and make money on the wholesale products, they will continue to reorder them.
Since the retailers are making money on the products, they will continue to buy more.
The wholesaler in the above mentioned scenario stands to make more money in the long run.
He is supplying a product that might have a slower margin for himself, but that is allowing his retail accounts to make money.