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When is Wholesale Really Wholesale
You've finally found the wholesale source for the high demand
widget that is selling like hotcakes on the Internet. Thoughts of
watching the money pouring in and celebrating the new found
success selling widgets has you so excited that you can't wait to
buy 5 widgets at wholesale and double the investment.
After a lot of effort to market your widgets, you haven't sold
any. Then, much to your surprise, you find others selling the
same widget at a much lower price and doing a great business. You
can blame the wholesaler for your lack of success or you can face
the truth about wholesaling and volume purchasing.
So, after an unsuccessful attempt to sell widgets, you decide
to do the research to find out why you couldn't compete. The
first eye opener is that you can find the widget at a number of
places selling for less then your wholesale cost.
Lets look at the reasons for this.
- The retailer can buy in bulk and receive quantity
pricing
- In many cases this also qualifies the retailer for
manufacturers wholesale rebates
So it now seems that the word wholesale is a relative term.
Small businesses get first level wholesale pricing. Large
businesses (with great buying power) get 2nd and 3rd level
wholesale pricing plus incentives. As an example, the small
business may pay a price of $10 each buying wholesale widgets in
quantities of 1-10. The large business may pay $5 each for the
same widget in quantities of 500-1000.
So, is there any recourse for the small business?
Yes, The simple answer is Market Research.
OK, how can market research help me with wholesale buying?
The problem that needs addressing is buying widgets at to high
of a price to be competitive. Plus, there are hundreds of places
that sell widgets for a lot less then you can. If the demand,
competition and average selling price of widgets can be
determined, then you can make an informed decision about the
selling potential of the widget.
That is the simplified version of the answer, but touches on
the main points of market research.
You can do the research manually but by far the best bet is to
use one of the existing market research tools available on the
Internet. A moderate investment is required up front but the
information compiled and presented is essential to profitable
marketing.
A clear understanding how wholesale works in an open market
along with good research can multiply your chances of
successfully operating a small business. This applies to online
storefronts, auction sellers, or anyone doing business from
home.
About The Author
Johnny Burke is a successful online seller and webmaster for
E-MarketingAmerica http://www.gtsystem.net/e-commerceamerica/ offering
resources and information for the online marketer
webmaster@gtsystem.net
 MORE RESOURCES updated Thu. February / 09 / 2012
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